What significant factors led Sumo Group to post a jump in revenue during FY20?

Source: Oleg Krugliak, Shutterstock

Summary

  • Sumo Group PLC had shown a remarkable growth of 40.7% in revenue and an increase of 31.5% in Gross profit during FY20.
  • SUMO had launched 12 games and 279 milestones achieved during FY20.
  • SUMO had managed to show an increase in total headcount to 1,043 as of 31 December 2020.
  • SUMO has achieved two BAFTA wins for “Sackboy A Big Adventure” in March 2021.

Sumo Group PLC (LON: SUMO) is the LSE listed consumer goods stock. SUMO’s shares have generated a return of approximately 120.48% in the last 12 months. It is listed on the FTSE AIM UK 50 Index.

Business Model

Sumo Group PLC is the FTSE AIM UK 50 index listed Company, engaged in the services regarding creation & development related to the video games and entertainment industry.

(Source: Company website) 

Recent News

On 01 February 2021, the Company had announced the strategic acquisition of PixelAnt Games, which would help SUMO to achieve growth and widening its footprints in Poland’s video games development industry.

Financial Highlights (for 52 weeks ended 31 December 2020, as of 31 March 2021)

(Source: Company result) 

  • SUMO had experienced revenue growth of around 40.7% to £68.9 million during FY20 ended 31 December 2020, comprised of 24% organic growth and 16% acquisition growth.
  • With regards to the profitability, SUMO had demonstrated an adjusted EBITDA growth of 17.1% during FY20. Moreover, the adjusted gross margin dropped by 300 basis points to 41.8% during FY20.
  • Meanwhile, the Company had launched 12 games and 279 milestones achieved during FY20.
  • SUMO had managed to show an increase in total headcount to 1,043 as of 31 December 2020, while it was 766 as of 31 December 2019.
  • Furthermore, the Company had net cash of £6.8 million as of 31 December 2020, ahead of management expectations.
  • The Company had achieved two BAFTA wins for “Sackboy A Big Adventure” during March 2021 with two more nominations.
  • Furthermore, the Company had completed its first major acquisition in the form of Pipeworks Inc during October 2020.
  • Currently, SUMO is working on 40 projects with around 28 different clients.

Share Price Performance Analysis of Sumo Group PLC

(Source: Refinitiv, Thomson Reuters)

SUMO’s shares were trading at GBX 344.00 and were down by close to 4.97% against the previous closing price as of 31 March 2021 at 11:32 AM GMT. SUMO's 52-week Low and High were GBX 152.82 and GBX 387.85, respectively. Sumo Group PLC had a market capitalization of around £601.07 million.

Business Outlook

The Company had delivered outstanding business performance during 2020 with the launch of several games and won few incredible awards. Moreover, the FY20 results came out to be more than the expectations. The acquisition pipeline of SUMO remained robust, and it would be keen on acquiring the owner-managed businesses. The Company has an impressive pipeline of business development opportunities with existing and new clients as well. Furthermore, SUMO would accelerate the investment in the new publishing division, Secret Mode, which would help the Company to capitalize on the rising demand for innovative games. Overall, the Company is well-positioned to deliver on the strategic objective of achieving long-term growth in the coming years.

 

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