Sumo keen to recruit on the back of strong results

Sumo develops games for Microsoft, Sega and Sony
Sumo develops games for Microsoft, Sega and Sony
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Games developer Sumo Group, which develops games for Microsoft, Sega and Sony, increased its head count by 21 per cent in 2018 to nearly 600 employees after a year of substantial growth in revenue and profitability.

The Sheffield-based group has since taken on more staff to bring its headcount to 650.

Sumo's finance director David Wilton said: "We are aiming to get to between 700 to 750 at the end of this year.

"Now we've got nine studios in three different countries. We are keen to recruit more in those locations."

These nine locations include two in Yorkshire in Sheffield and Huddersfield.

Mr Wilton said 2018 was a "great" year for the group in terms of projects.

"Fundamentally it's been a really good year for us. We've delivered exactly what we thought we would do plus a little bit. It's been a great year in terms of delivering completed projects," he said.

The group won a new contract with Apple in December and two games are now under development for Apple Arcade.

"One is Little Orpheus, which is a concept we acquired with The Chinese Room.

"The other is Spider, which is a concept we created within Sumo Digital. That's been managed out of Sheffield.

"The interesting thing about both games is they're ideas that we came up with. The subtle shift in our business towards the end of 2018 is that we are using our own creative skills to come up with ideas, but what we're not keen to do is to take considerable risk on developing them.

"When the cost of the game is many millions of pounds, we're not prepared to fund it ourselves. So we either get it funded by a third party such as Apple or in other cases, we would co-fund it."

Following the acquisition of The Chinese Room in August and Red Kite Games in January, the group is looking at more acquisitions.

"We have a very strong pipeline of acquisition opportunities," said Mr Wilton.

"We are keen to buy something bigger. We're looking for something in a new territory or that gives us a new capability. We've got a number of things we are actively pursuing."

Sumo said adjusted revenue rose 36 per cent to £39m in 2018.

The group made a pre-tax loss of £500,000, down from a loss of £28m, but this included amortisation of £6.9m. Adjusted pre-tax profit rose 20 per cent to £9m and adjusted EBITDA (analysts' favoured measure) rose 25 per cent to £10.4m.

Three major projects were announced or officially launched in 2018, including Hitman 2 (launched in November), Crackdown 3 (launched in February) and Team Sonic Racing, which has a planned release date of May 2019.

Sumo said it has made a positive start to the new financial year with an unusually high degree of earnings visibility. Current trading is in line with the management’s expectations and the group said the outlook is positive.

Sumo's chief executive Carl Cavers said: “With the video games market forecast by Newzoo, a leader in games analytics, to grow around 30 per cent in the next three years, driven by demand for new cloud-based subscription platform content supported by the world’s biggest publishers, we believe that the outlook for Sumo Group is as good as ever.

"We are successfully attracting major new global publishers, as well as strengthening our relationships with existing and previous clients, and our business development pipeline remains very healthy."