Sumo Group PLC (LON:SUMO) reported higher revenues and earnings for 2020 as the video game industry boomed during the Coronavirus (COVID-19) pandemic.
In its results for the year to December 31, the provider of creative and development services reported adjusted earnings (EBITDA) of £16.5mln, 17.1% higher year-on-year, while revenues surged 40.7% to £68.9mln.
READ: Team17 and Frontier upgraded as broker sees video game sector buying opportunity
During the year, the company said it had delivered 279 milestones and launched 12 games, while its staff headcount rose to 1,043 from 766 despite pandemic restrictions.
Looking ahead, Sumo said it will focus on headcount expansion both organically and via acquisitions, adding it has a “strong” pipeline of targets that are being actively pursued.
The firm also said it has “strong visibility” with 85% of its budgeted development fees for its 2021 financial year contracted or near-contracted as of the end of February, up from 73% at the end of March last year.
"2020 has been an extraordinary year for us in so many ways. Our people have responded brilliantly to the pandemic restrictions, delivering many fantastic games and winning some incredible awards, including two BAFTAs. We also completed a major acquisition in the US and generated financial results ahead of everyone's expectations”, Sumo chief executive Carl Cavers said in a statement.
"The year ahead is packed with even more exciting opportunities for our talent to shine, and we are excited about the launch of Secret Mode, our new publishing business, announced earlier this month. Our focus remains on delivering further strong growth organically and by acquisition, and the pipeline of opportunities remains strong. We have an enviable level of visibility on development fees in 2021 and, with our markets continuing to perform strongly, are increasingly confident about the future of the business", he added.
In a note, analysts at Peel Hunt reiterated their ‘buy’ rating and 402p target price on the stock, saying that “with cash rich game developer clients who are eager to capitalise on the expanded video games market, it is hard to imagine how Sumo isn’t going to have a great year”.
Shares in the company were down 0.1% at 361.6p in early deals on Wednesday.