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Sumo Group Plc - Playing for Keeps

Sumo Group (LON:SUMO) provides creative and development services to the video games and entertainment industries, through two main operating businesses: 1) Sumo Digital, representing 90% of group revenues, is a key co-development partner and turnkey video games developer with a history of working with blue-chip clients such as Sony, Microsoft, Sega and EA (among others); 2) Atomhawk, representing 10% of group revenues, is a visual design company servicing the videos games and entertainment industries.

Executive summary

Listed companies in the video games space tend to command high valuation multiples, due to the growth dynamics of the industry. There is scope for Sumo to re-rate to a higher multiple, in line with peers (see p2). We argue that, given its strong growth prospects, limited risk business model, and strong cash flows, Sumo Group offers an attractive valuation at current levels.

Quick facts: Sumo Group PLC

Price: 199 GBX

AIM:SUMO
Market: AIM
Market Cap: £299.69 m
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What's in the report?

Financial results and forecasts
Growth drivers
Management
Market conditions
Milestones & inflection points

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