Sumo on track after fattening up workforce

Sumo Group climbed on Monday after it reported that it expects its full-year results to fall "at least" in line with expectations after the company boosted its employee base by over 100.

At the end of 2018 the video games and entertainment industry services provider had 592 employees, up from 489 at the start of the year, and it said new contract wins towards the end of the year underpinned financial forecasts for the current year.

Carl Cavers, chief executive of Sumo, said: "In our first full year since IPO in December 2017, we have continued to deliver strong growth across all areas of the business. The group started 2018 taking on the Newcastle Studio of CCP Games and, in August, we acquired The Chinese Room, creating our Brighton Studio. Sumo Group is currently operating globally from seven studios in three countries and we are planning to operate from another studio in the UK in the near future."

As at 31 December 2018, the AIM traded company had positive cash balances of £3.7m, down from £12.4m at the same point last year.

"We are seeing many exciting opportunities to deliver more growth in our core markets, served by Sumo Digital and Atomhawk, and I am very pleased with the progress the business is making. The board looks forward to announcing the group's final results and providing a further update in April," said Cavers.

Reiterating their view of Sumo as a sector top pick, Peel Hunt analysts said: "With its low risk model, the group remains focused on delivering for its blue-chip client base, as well as taking on controlled risk through self-published IP (£2-3m total investment, unchanged)."

Sumo Group's shares were up 5.20% at 131.50p at 1129 GMT.