Sumo Group plc (LON:SUMO) Annual General Meeting will be held at 11.00am today. In view of the compulsory COVID-19 measures restricting public gatherings and non-essential travel, this AGM is being run as a closed meeting. Shareholders are not allowed to attend the AGM in person and anyone seeking to do so will be refused entry. Sumo group has arranged for a quorum to be present to transact the formal business of the meeting, as set out in the notice posted on 21 May.
Ahead of the AGM, the Group announces the following trading update:
The Board is pleased to report that the Group has continued to perform well since the Final Results 2019 announcement in April 2020, trading comfortably in line with market expectations, and is well positioned to benefit from increased activity in the video games market.
The lockdown restrictions, resulting from the COVID-19 pandemic, are positively impacting the Group’s underlying market, with video gaming activity and console purchases accelerating faster than previously forecast. Our most recent game launch was on 12 June when Little Orpheus, the brand-new adventure from award-winning studio The Chinese Room, a Sumo Digital Studio, was made available exclusively on Apple Arcade. With beautiful visuals inspired by a bygone era of adventure, Little Orpheus is an account of what happened to Soviet cosmonaut Ivan Ivanovich during his three years below the Earth’s crust and has received very positive feedback. This follows the success of Spyder on Apple Arcade which has achieved consistently high user feedback ratings since launch on 20 March. On 11 June Sony announced Sackboy A Big Adventure at the PlayStation 5 reveal event.
We are generating a strong pipeline of new business development opportunities across both Client and Own-IP despite the severe restrictions on travel and face to face contact.
The health and welfare of our people remains our number one priority and we are very pleased to report that everyone has, thankfully, remained safe through the COVID-19 crisis to date. Our teams are continuing to work very effectively, and safely, from home, with only minor disruption to and, in most cases similar productivity to that achieved when based in our offices. While the reopening of our studios is not planned in the near-term, we are exploring the options on how and when to do this. We are particularly grateful for, and appreciative of, our talented, committed and highly skilled people, and our robust IT systems and proprietary technologies, which have enabled the Group to operate successfully under such difficult circumstances. These, combined with our long established, valued and integral working relationships with many of the world’s largest games publishers, are what makes Sumo Group have confidence in continuing to deliver on its growth ambitions.
The Board would like to thank the whole team for their continued commitment and dedication, throughout this exceptional situation, and our clients for being wholly supportive of our new working arrangements.
Acquisition of Lab42
On 15 May 2020, we announced the acquisition of Lab42 Limited, a cross-platform work for hire studio, providing co-development and full game development services, for a total cash consideration of $0.6 million. The acquisition supports our growth ambitions, increasing the Group’s capacity and adding new talent (29 people). It also strengthens our presence in a talent hot spot, Leamington Spa and has brought a number of new client relationships to the Group.
The business holds an exclusive licence to use the World Snooker Tour brand and was sole developer on Snooker 19 for all major consoles and PC. Lab42 is continuing development on World Snooker products and expects to launch additional games on new devices later this year. Other well-known titles on which Lab42 has worked include Yakuza 0 and Yakuza Kiwami, Football Manager Touch 18, Sonic Mania, Terratech and Fishing Sim World.
The integration of Lab42 is going to plan and the business is already performing well, in the short period since acquisition.
In our FY19 results, we referred to the challenge of recruiting new talent in the current remote-working environment. This is ongoing and we expect recruitment to remain challenging for some time. Whilst we are continuing to execute our stated organic growth strategy, given the fragmented nature of our market and opportunities arising from the COVID-19 situation, we are currently focused on accelerating the Group’s expansion through specifically targeted acquisitions.
We are pleased with the progress that the Group has made to date and look forward to capitalising on the new business opportunities which are being presented. Trading in the year to date is comfortably in line with market expectations and the Group is well positioned to continue to take advantage of the strong growth in the global video games market.
Sumo Group continues to view the future of the Group with confidence, despite the backdrop of COVID-19, and remains optimistic about the prospects for the business in the current financial year and beyond.