Sumo Digital transformed £52.2m debt into £12.4m cash balance in 2017
Crackdown 3 developer buoyant in first financial results following last year's IPO
UK developer Sumo Digital has announced its financial results for the year ended December 31st, 2017 - perhaps the most transformative periods in the studio's history.
During this time, the firm transitioned from being majority owned by funds managed by Perwyn LLC to becoming a publicly listed company, having successfully completed a £145m IPO just days before the financial year ended.
Despite the various changes the studio was going through and the cost of restructuring the group in preparation for the IPO, Sumo Digital enjoyed significant increases in key areas.
Revenue rose by 27 per cent year-on-year from £24.1 million to £30.6 million, while gross profits rose from £9 million to £13.3 million - a increase of 47 per cent.
Perhaps most impressive is that by the end of 2016 the studio was £52.2m in debt, but as of December 2017 has a cash balance of £12.4m.
Investors may be concerned by the dramatic increase in losses befor tax - up more than 1,000 per cent from £2.1 million to £28 million. However, CFO David Wilton tells GamesIndustry.biz that this is primarily made up of a non-charge cash related to the Perwyn acquisition.
Indeed the firm's results note that £27.6 million of the £28 million are related to this, with Wilton adding that this is "not a trading issue". Instead, the studio expects this year to be "ahead of expectations."
With that in mind, the underlying results Sumo reports appear even better. For example, adjusted profit before tax is up 42 per cent from £5.3 million in 2016 to £7.5 million last year.
"We're very pleased with the strong underlying trading results we announced and the good start we've made to 2018," Wilton tells us. "We are seeing strong demand for our services and are well placed to take advantage of the considerable opportunities.
"The financial results are the first since our IPO in December 2017 and cover the period in which the Group transitioned from the previous ownership structure for more than 11 months, to the new status as a listed company with no debt, 10 days before the financial year end.
"Accordingly, they reflect the debt structure in place for most of the year up to the IPO and also the reorganisation of the Group in preparation for the IPO, together with the significant costs incurred in the process and also the non-cash and non-recurring amortisation charge from the transaction with Perwyn in September 2016."