At the Annual General Meeting of Sumo Group plc (LON: SUMO) which will be held at 11.00am today at the Mercure Sheffield Parkway, Sheffield, the Chairman, Ken Beaty, will make the following statement:
“We are now nearly halfway through our second year as an AIM quoted company and earlier this month celebrated the 16th anniversary of the founding of Sumo Digital. We continue to create strong demand for the Group’s services. Our talented and highly skilled people, our proprietary technologies and systems and our close relationships with the world’s largest AAA games publishers give us a significant competitive advantage, which will enable us to leverage the increasing opportunities presented by our fast-growing global market. The Association for UK Interactive Entertainment (UKIE) reports that the UK market for games was valued at a record of £5.7bn in 2018, representing +10.0% growth on the previous year. Newzoo expects the global games market to grow from $152.1billion in 2019 to $196 billion by 2022. This leaves us full of optimism for the future of our business, and the Group’s business development pipeline is currently very strong.
The resounding global confidence in the gaming sector was evidenced at the recent E3 Conference in Los Angeles. Microsoft announced its new console ‘Project Scarlett’, which is scheduled for release in 2020. Google confirmed its Stadia platform by releasing pricing options; and Apple Arcade continues to excite. Five of the largest businesses in the world, Apple, Microsoft, Google, Amazon and Tencent are actively driving growth in our industry, so the demand for content has never been higher.
In January 2019, the Group acquired Red Kite Games, a successful work-for-hire studio focusing on engineering and code support services. The studio has worked with Sumo Digital for several years, on a range of titles, in addition to many other high-profile publishers and developers including Codemasters (DiRT 4), Sony Computer Entertainment (God of War III: Remastered) and Activision (Call of Duty: Strike Team). Red Kite Games has performed in line with management expectations since acquisition.
This acquisition follows the addition of a studio in Newcastle, formerly CCP Games, in January 2018 and The Chinese Room in August 2018. We remain acquisitive and have an active M&A pipeline.
We continue to execute on our stated organic growth strategy and, given the fragmented nature of our market, are actively exploring opportunities to further accelerate expansion through acquisition. The Group also opened a new studio in Leamington Spa, earlier this year, to focus on opportunities in mobile game development.
In conclusion, I am pleased to report that the Company is trading in line with current market expectations and with its strengthening cash profile the business is well positioned to take advantage of the strong growth in the global video games market. The Board is, therefore, confident about the outlook for Group in the current financial year and beyond.”
Sumo Group plc management team hosted an analyst studio site visit in Sheffield on Wednesday 19 June 2019. Presentations were given on how video games are developed by Sumo Digital. No new information was disclosed and the Company did not comment on current trading.