Sumo Group plc (LON:SUMO) has announced, ahead of the Annual General Meeting, which is being held later today, the following trading update:
Following an extraordinary year in 2020, when the Group delivered 279 project milestones and launched or announced a total of 12 games, including five Own-IP, and completed its first major acquisition, the Board is pleased to report that the global video games market remains strong and that the Group is performing in line with expectations in the year to date.
Sumo Group now has four divisions, Sumo Digital, Pipeworks, Atomhawk and our recently created publishing division, Secret Mode. All divisions are trading well and we are encouraged by the early progress achieved at Secret Mode, which is reviewing a considerable number of internally and externally sourced titles. Overall, the pipeline of new business development opportunities now comprises a total contract value in excess of £500m, a significant increase on the £429m figure at 28 February 2021, which we reported in our Final Results 2020 announcement on 31 March 2021.
Our Own-IP title shared with Focus Home Interactive, Hood, which is a dark re-imagining of the Robin Hood legend developed in our Sumo Digital Newcastle studio and published by Focus Home Interactive, launched in May this year. We are pleased with the reception the game has received since launch and we are now delivering the post launch plan including new content.
We are delighted that Little Orpheus, developed by The Chinese Room, has been awarded the Apple Design Award for “Delight and fun” for its platforming, storytelling, music and for bringing console-like experience to an accessible game.
Pipeworks will shortly open a new studio in Vancouver and has recruited Joe Nickolls, who has more than 20 years’ experience in the industry and was most recently VP / GM at Electronic Arts – MAXIS Studio. This will be the Group’s 14th studio.
The health and welfare of our people remains our main priority. Our teams are continuing to work very effectively, productively and safely from home. While we have no immediate plans to return to studio-based working, we are exploring the options and expect to move towards some form of hybrid studio/home working arrangements going forward . Once again, the Board would like to thank the whole team for their continued commitment and dedication and our clients for being wholly supportive of our present working arrangements.
Following the achievement of 3 Star Accreditation in the B-Heard Best Companies Survey in February 2021, we were subsequently ranked 59th in The UK’s 100 Best Large Companies to Work For 2021. In addition, we are delighted that our largest operating division Sumo Digital has earned a TIGA STAR. The TIGA STAR Award scheme recognises the very best employers, both small and large, in the UK video games industry. The system was developed to benchmark the way companies are run to encourage best practice, with a particular focus on the way employees contribute to success. Sumo Digital was judged in four areas: Strategy, Teams, Advancement and Recognition, and a rigorous evaluation revealed that we are an excellent place to work and have a strong vision for future success. Earning a TIGA STAR was one of Sumo Group’s ESG targets.
Growth strategy and the market
Awards and accreditations that recognise the appeal of Sumo Group’s working environment and culture are central to our ability to both attract and retain the best talent in the industry. Recruitment underpins the Group’s plans for growth and, while this remains challenging, we have increased total headcount from 1,043 at 31 December 2020 to 1,155 at 31 May 2021. Of this total, which includes 13 developers who joined us when we acquired PixelAnt Games on 31 January 2021, 951 are direct.
Our acquisition pipeline remains strong and we are pursuing a number of targets.
The strong underlying market growth trends continue unabated and our pipeline of opportunities continues to grow.
Our cash position remains strong. At 31 May 2021, we had net cash of £8.0m up from £6.8m at 31 December 2020 following some earlier than forecast receipts. On 31 March 2021, the Group spent £5.5m funding the purchase of approximately 1.54m Sumo Group shares through the Employee Benefit Trust (the “Trust”), following the exercise of options under the Company’s Long-Term Incentive Plan. These shares are to be held on the terms of the Trust to satisfy the vesting of options under the LTIP in the future.
We are very pleased with the progress that the Group is making. Trading in the year to date is in line with expectations and the Group is well positioned to continue to take advantage of the strong growth in the global video games market.
The Sumo Group Board views the prospects for the Group in the year ahead and beyond with confidence.