SUMO GROUP PLC UNAUDITED HALF YEAR RESULTS 2018
DISCLAIMER Certain statements included or incorporated by reference within this presentation may constitute “forward - looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares and other securities of the Company. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. Statements in this presentation reflect the knowledge and information available at the time of its preparation. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws. 1
WHO WE ARE FY18 Timeline Took on Newcastle 1 January 2018 Studio of CCP Games Pre-close Trading 1 February 2018 Update Co- development partner to some of the world’s leading 2017 results 24 April 2018 publishers, offering turnkey game development solutions. announced Sumo Digital develops games across all console platforms, PC, handheld and mobile devices. Annual General 27 June 2018 Meeting Now includes The Chinese Room. Visible, contracted revenue model 9 July 2018 Investor Day Acquisition of The A visual design company providing creative services to the full 14 August 2018 Chinese Room spectrum of the entertainment industry, including games, TV and film. 2018 Half Year 25 September 2018 results announced 2
HIGHLIGHTS Adjusted revenue Adjusted gross profit Adjusted gross margin Board strengthened, excluding pass through adding HR expertise £19.6m £8.2m and royalties Appointment of Andrea Dunstan as NED and Chair 41.8% +48% +56% of Remco September 2018 (H1 2017: 38.7%) (H1 2017: £13.2m) (H1 2017: £5.3m) Adjusted EBITDA Operating cash flow Net cash Took on Newcastle Studio of CCP Games January £5.0m 1 £(4.4)m June 2018 £6.5m 2018 Acquisition of The (H1 2017: £2.1m) +46% £12.4m Dec 2017 Chinese Room August 2018 (H1 2017: £3.4m) 1. Adjusted EBITDA is profit before finance costs, tax, depreciation, amortisation, share based payment charges, the impact of IFRS 15 financing recognition and exceptional items – a non – GAAP metric used by management and is not an IFRS disclosure 2. All figures in this presentation are unaudited and comparative figures are for the half year to 30 June 2017 unless stated otherwise 3. The adjusted or underlying figures are reconciled to the reported figures in the appendices 3
GROSS MARGIN H1 2018 H1 2017 FY 2017 Reported 34.8% 36.8% 43.3% Adjusted 42.1% 39.8% 46.4% -Excluding pass through -Excluding pass through and 41.8% 38.7% 45.4% royalties 4
CONSOLIDATED UNAUDITED H1 2018 INCOME STATEMENT H1 2018 H1 2017 FY 2017 Notes £m £m £m Revenue Core development fees 22.6 12.7 28.4 H1 2018 includes £3.6m of pass through (H1 2017: £1.1m) Own IP 0.3 1.3 1.7 Snake Pass launched March 2017 Royalties 0.1 0.3 0.5 Total Revenue 23.0 14.3 30.6 Adjusted gross profit 8.2 5.3 13.3 Adjusted EBITDA 5.0 3.4 8.4 Underlying adjusted profit before tax, exceptional 4.3 3.0 7.5 Reconciliation in appendix items, share based payments and amortisation Includes amortisation of £5.0m (H1 2017: £2.6m) Loss before tax (1.8) (2.0) (28.0) 5
IFRS 15: REVENUE FROM CONTRACTS WITH CUSTOMERS Review using the five step model set out in IFRS 15 - Identifying the contract - Identifying performance obligations - Determining the transaction price - Allocating the transaction price to performance obligations - Recognising revenue when (or as) the entity satisfies a performance obligation The adoption of IFRS 15 is not having a material impact for the large majority of contracts For one contract Sumo Digital is making a judgment of modification/termination with a financing component £m FY 2017 H1 2018 H2 2018 H1 2019 H2 2019 Total Reduction in revenue (0.2) (0.3) (0.1) (0.6) Increase in interest - 0.1 0.2 0.2 0.1 0.6 income at 6% Movement in retained (0.1) (0.1) - 0.2 - - earnings Analysts’ forecasts are stated before this financing component, which reclassifies the amounts from revenue/gross profit and EBITDA to net finance costs 6
CONSOLIDATED UNAUDITED H1 2018 BALANCE SHEET June 2018 June 2017 December 2017 Notes £m £m £m Goodwill and intangibles 23.4 53.0 28.2 PPE 2.6 1.0 1.8 Revenue in excess of billings £8.4m (Dec 17: £3.8m) of which £5.3m Trade and other receivables 18.2 10.1 10.2 is one contract and VGTR £5.7m (Dec 17: £4.6m) – analysis in appendices Cash 6.5 2.4 12.4 Borrowings - (56.9) - All debt repaid at IPO Trade and other payables (10.8) (7.3) (10.8) Analysis in appendices Corporation tax payable (0.9) - (1.3) Other 1.7 (4.8) 0.5 Includes deferred tax assets/(liabilities) Shareholders’ funds 40.7 (2.5) 41.0 Positive net tangible assets 7
CONSOLIDATED UNAUDITED H1 2018 CASH FLOW STATEMENT H1 2018 H1 2017 FY 2017 Notes £m £m £m Operating (loss)/profit (22.6) (1.9) 0.4 Depreciation 0.5 0.3 0.7 Amortisation 5.0 2.6 27.6 Accelerated amortisation in 2017 Share based payment charges 1.1 - - £4.6m increase in revenue in excess of billings (£3.2m on one contract), £1.4m Movement in trade and other receivables (8.1) 0.4 0.3 increase in debtors & £1.1m increase in VGTR Movement in trade and other payables - (0.1) 3.1 Net cash flow from operating activities 9.1 (3.4) 3.6 Net finance costs - (0.7) (5.4) Leveraged structure pre IPO Tax paid (1.0) (0.7) (0.5) Capex (1.5) (0.4) (1.7) Acquisitions - (2.3) (2.3) Atomhawk Proceeds from issue of shares - - 67.4 Transaction costs relating to issue of shares - - (1.9) Net repayment of borrowings - (1.6) (56.7) Repayment of borrowings on IPO in December 2017 8 Net cash flow (5.9) (2.1) 8.0
GUIDANCE / UPDATE • As previously indicated significant investment for 2018: plc costs, new roles (IT, Development Directors, Business Overheads Development), Atomhawk full year, Newcastle Studio and redesigned bonus scheme • >£2m increase year on year – small reduction in EBITDA margin in 2018 • Tax credit of £0.5m Tax • Tax charge driven by deferred tax on share based payment charge and timing of VGTR • Expected outflow in 2018 - investment in one contract and capex Working capital • Change to treatment of pass through cash in H2 2018 • Expecting £3.0m to £3.5m in 2018 on premises and new systems Capex • Expect small operating loss through remainder of 2018 and to be profitable in 2019 • Transaction costs c. £125k The Chinese Room • Capital cost of investment low 9
SUMO NEWCASTLE STUDIO The Studio • Took on the studio from CCP Games 1 January 2018 • Team of 34 – known to Sumo with strong leadership • Located in Gateshead near Atomhawk – about to move to same building • Favourable financial terms • Highly utilised from February • Fully integrated What it brings to Sumo Digital • Technical capacity, strong creative direction and great VR experience • New studio location and access to new pool of talent • Proven and highly regarded team well known to Sumo – accelerated recruitment • Work from CCP Games and strengthened links 10
THE CHINESE ROOM The Company What it brings to Sumo Digital • Founded 2007 by Dr Dan Pinchbeck • Award winning independent game development studio known Acceleration of Own IP pipeline and new intellectual property for experimental first-person games • Dear Esther and So Let Us Melt • Games published: Dear Esther, Amnesia: A Machine for Pigs, Everybody’s Gone to the Rapture and So Let Us Melt Two original concepts including 13 th Interior which is at prototype stage • • Multiple awards including three BAFTAs The Deal Creative Talent • Consideration £2.2m: £1.6m cash and 357,485 shares - 12 • Dr Dan Pinchbeck month lock in • Acquired £1.6m cash so net consideration £0.6m in shares • Dan Pinchbeck stays as Creative Director and participates in New studio location LTIP • 2,700 sqft studio in Brighton • Ownership of IP • Studio Director appointed • Retain the brand name • Recruitment underway Financials • New talent pool in creative hotspot • Modest revenue on published games • Expect small loss in H2 2018 while recruiting • Capital cost low 11
Recommend
More recommend
