Two AIM Stocks Worth Considering – Sumo Group Plc and Boku Inc

Two AIM Stocks Worth Considering – Sumo Group Plc and Boku Inc

Sumo Group Plc

Sumo Group Plc (LON: SUMO) is a Sheffield, Yorkshire based Consumer goods company that is engaged in the supply of support as well as development services all across the Video Games and Entertainment and media industry. The list of the company’s clients includes the who’s who of the video game and the media and entertainment business such as the companies like EA Sports, Activision, Konami, British Broadcasting Company (BBC), Sony Computer Entertainment, Sega, Microsoft Studios, Sony Online Entertainment, Turn 10, Code masters, as well as THQ and XDEV. The company has two business divisions - Sumo Digital, which operates as a co-development partner to some of the world’s leading video game publishers and developers and Atomhawk, which operates as a visual design company. Sumo Digital has offices across Sheffield, Newcastle, Pune and Nottingham. It also runs three video game publication brands called The Chinese Room, Red Kite Games and Leamington Spa. The company runs a wide array of different kind of studios, which help the larger video game publisher in terms of design, development, testing as well as back end operations on network-based services. Atomhawk, the business division that creates and enables various companies and studios to achieve their visual design objectives on kinds of content, be it live- action or Animations. Atomhawk has its offices in Nottingham in the United Kingdom as well as in Vancouver, Canada. The company has been operating in the development of AAA-rated video games, distributing both turnkey, as well as co-development solutions, since 2003, when it was first established. The company’s primary business strategy is the growth of its operations organically, which can, in turn, deliver growth in the value of the shareholders. This strategy has been primarily driven by four tactics, which are to Deliver and Expand geographically as well as horizontally in terms of number of services being provided, Develop a portfolio of new strategic partners in both the video game as well as entertainment business, own intellectual property of the highest order, as well as to make acquisition that can complement the company’s revenue stream or reduce costs, from within the industry.

SUMO Financial Performance

On 26th September 2019, the company published a press release to announce its unaudited half-year results for the six months ended 30th June 2019. The company primarily highlighted that they made an acquisition of Red Kite Games during the reporting period, which drove the addition of 27 new people in the team. The company also opened a new studio in Leamington Spa region, to concentrate and develop products for the mobile gaming space, which is currently a booming market within the Video game business. The company reported a 6.1 per cent year on year increase in the Adjusted revenue from £19.6 million in H1 2018 to £20.8 million in H1 2019. The adjusted gross profit for the period was reported at £9.8 million, a 13.7 per cent year on year rise, as compared to the adjusted gross profit in H1 2018, reported at £8.6 million. Adjusted Earnings before Interest Taxes Depreciation and Amortization (EBITDA) was almost flat from £5.0 million in H1 2018 to £5.2 million in H1 2019. This also translated into the Adjusted Profit Before Tax, which was also flatlined from £4.3 million in H1 2018 to £4.5 million in H1 2019. The company reported Basic earnings per share of GBX 0.56 per share and diluted earnings per share of GBX 0.54 per share in H1 2019, compared to a loss per share of GBX 1.20 per share (basic and diluted) in H1 2018.

SUMO Share Price Performance

(Source: Thomson Reuters) Daily Chart as on 29-November-19, prior to the close of the market

On 29th November 2019, at 08:30 A.M GMT, while writing, Sumo Group Plc’s share price was reported to be at GBX 155.30 per share, a decline of 0.29 per cent or GBX 0.45 per share, as compared to the previous day’s closing price, which was reported to be at GBX 155.75 per share. At the time of reporting, the Sumo Group Plc share was reported to be trading 49.89 per cent above the 52-week low share price, which was at GBX 103.61 per share, that the company’s shares reached on December 28, 2018. At the current market price, the share was also trading 18.17 per cent below the 52-week high price at GBX 189.78 per share, which the company’s share achieved on November 15, 2019. The company’s market capitalisation (M-Cap) was reportedly valued to be at GBP 234.53 million with respect to the share’s current market price.

The Sumo Group Plc share has given a positive change in the last six months in the value, of around 11.73 per cent from the share price of GBX 139.00 per share that the company’s share achieved on May 28, 2019. Sumo Group Plc’s share has declined by 0.93 per cent in value, in the last one month from the price of GBX 156.75 per share that the shares closed at on October 28, 2019.

Boku Inc.

Boku Inc (LON: BOKU) is a Support services company based out of San Francisco, the United States, that primarily provides digital payments solution to both merchants as well as carriers and service providers. The company has more than 3 billion potential users of its platform and supports around US $3.6 Billion volume in payments annually. The company’s clients include some of the biggest brands in the world such as Google, Spotify, Facebook, AT&T, T Mobile, Microsoft, O2, XBOX, Blizzard, Uber, Verizon, Discovery, Sony PlayStation, Western Union as well as Fiserv, etc. The company primarily provides two kinds of solutions, Payments solutions, which operates as one of the most effective and easy to use digital payment method worldwide, through company’s website and application also supporting Carrier Billing and Mobile Wallet services and Identity solutions, through which the company provides digital security services, through its identity verification network, which is an extremely robust network with a wide reach. The company has authenticated approximately 1 billion users through this service and has access to more than 170 partners in over 50 countries worldwide.

BOKU Financial Performance

On 10th September 2019, the company made a press release to announce its interim results for the six months ended 30th June 2019. Major highlighting point from the company was the year on year increase of 47 per cent in the Total Payment Volume (TPV) from US $1.5 billion in H1 2018 to US $2.3 billion in H1 2019. The company reported a significant increase in the revenues for the period, of 39 per cent year on year to US $23.5 million in H1 2019 from US $16.9 million in H1 2018. The company also highlighted that the Adjusted Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) increased massively by around 72.5 per cent year on year from US $2.5 million in H1 2018 to US 4.3 million during the period. The company reported that the gross margin of the group was around 87.5 per cent, majorly driven by the performance from the payments business, whose gross margin was at 95 per cent. As on 30th September 2019, the company reported a cash balance of US $27.9 million.

BOKU Share Price Performance

(Source: Thomson Reuters) Daily Chart as on 29-November-19, prior to the close of the market

On 29th November 2019, at 08:35 A.M GMT, while writing, Boku Inc’s share price was reported to be trading at GBX 87.00 per share, no change in the price of the stock, as compared to the previous day’s closing price. At the time of writing, the Boku Inc share was reported to be trading 38.10 per cent above the 52-week low share price, which was at GBX 63.00 per share, that the company’s shares reached on December 13, 2018. At the current market price, the share was also trading 42.38 per cent below the 52-week high price at GBX 151.00 per share, which the company’s share achieved on May 23, 2019. The company’s market capitalisation (M-Cap) was reportedly valued to be at GBP 219.46 million with respect to the share’s current market price.

The Boku Inc share has given a negative return in the last six months in the value, of around 41.02 per cent from the share price of GBX 147.50 per share that the company’s share achieved on May 28, 2019. Boku Inc’s share has also declined by 11.22 per cent in value, in the last one month from the price of GBX 98.00 per share that the shares closed at on October 28, 2019.

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