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This Clickety Click Innovator Seems Set to Keep its Profits Growing in a Bouncy Market

By Malcolm Stacey | Thursday 11 October 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Trudgers. My pre-teen boys and daughter drove me mad playing electronic games in the sitting room. I thought it was a daft craze. But wasn't I wrong? Video games are bought by the bucketload. £90 billion worth. That’s right. Billions, not millions. Step forward Sumo (SUMO). It makes some of the games itself. But it also helps out the big game names, like Sega, Microsoft and Sony.

Some of Sumo’s games are home-grown. And some were started by someone else, but are refined by the AIM-listed group. It helps to make sure the games work well with different devices - offering difficult technical services to the big firms, which appreciate some outside expertise.

Did you know that some of the famous games can take years to perfect? When you look at the exotic historic and future settings of some of these electro-games, it’s hard to imagine them being perfected by a firm headquartered in down-to-earth Sheffield. Sumo also has offices in Nottingham, Newcastle, Brighton, India and Canada.

The company is doing well, having doubled profits to £7.5 million over the last four years. The City thinks the figures for 2018 will impress even more, growing profits to £9 million. It’s said that approaching a quarter of its 550 staff have a financial interest in how the enterprise performs. That’s a pretty good sign that they’ll keep a nose to the grindstone for the benefit of shareholders. Especially as most of these tireless workers are in good old Yorkshire.

You may know that the games industry has had a big shift away from physical discs to being downloaded. This means Sumo can keep working on improving games after the launch dates. There is a light worry that games could run their course and become yesterday’s pastime. But I’ve been thinking that for at least 25 years and the industry just goes from strength to strength.

Unlike the Punter’s Return.

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