Sheffield game maker Sumo Group plc posts pre-tax loss as sales climb 60.1%

Yorkshire game company Sumo Group plc made a seven-figure loss before tax in the six months to June 30 2018.

The Sheffield-headquartered firm said the half-year results, which follow its IPO on AIM in December, were dented by “significant” non-cash charges relating to the amortisation of ‘goodwill’ and to share-based payments.

Revenue for the period climbed 60.1% to £22.9m and gross profit by 51.3% to £8m, but Sumo made a pre-tax loss of £1.8m and the net outflow of cash generated by its operations was £4.4m, compared with a net inflow of £2.1m in H1 2017.

The company said the results were “expected” and explained that they arose “primarily due to the payment terms on the one contract whereby for commercially attractive terms the group is financing an element of development combined with the timing of milestone receipts”.

The performance also reflected the cost of share-based incentive schemes, the firm said. One of the reasons it become a public listed company was to incentivise its workforce with quoted shares. The first of its two incentive plans, launched in March, included a non-cash charge of £1.1m.

Capital expenditure in H1 2018 stood at £1.5m, a year-on-year increase of £1.1m, and mostly related either to the refitting of its Sheffield HQ or purchasing IT equipment and systems.

Sumo Group CEO Carl Cavers said: “These results cover our first half-year period as an AIM-quoted company.

“The business is flourishing under this new, independent capital structure and I am delighted to report an excellent performance in H1, driven by continued strong organic growth in our core services.”

He continued: “We are seeing exciting business development opportunities, as the video gaming market continues to grow globally. This, combined with our low risk business model, gives us a great deal of confidence in the ongoing success of the business.

“Our investment in people and locations continues, as demonstrated by our recent acquisition of The Chinese Room in Brighton, an industry hot spot. We have strengthened the Board to support growth.”

Speaking further, Mr Cavers said: “We are a people business and the appointment of Andrea Dunstan [today, as non-executive director] , with her people expertise, shows our absolute commitment to ensuring that Sumo Group is in the best possible shape to attract and retain exceptional talent.”

In January, Sumo established a presence in the North East with a deal to acquire the Newcastle studio of CCP Games.