Thursday, 20 August 2020 14:49

MGM Wireless achieves revenue increase to $10.5m despite impact of COVID-19 Featured

By
MGM Wireless CEO & co-founder Mark Fortunatow MGM Wireless CEO & co-founder Mark Fortunatow

Australian-listed software technology company MGM Wireless has recorded total revenue growth of 47% to $10.5 million for 2020, despite experiencing a decrease in March - and then a rebound - in sales of its SPACETALK all in one children’s smartphone, watch and GPS device, due to the COVID-19 pandemic.

“MGM Wireless closed FY20 with growth in all revenue lines resulting in total revenue growth of 47% pcp to $10.5m. In March 2020, due to COVID-19 related closedowns, a decrease in SPACETALK device sales was experienced, and as restrictions were eased, by June a sharp improvement to pre COVID-19 January levels was achieved,” said CEO and co-founder, Mark Fortunatow.

“Our monthly subscription based AllMyTribe App performed strongly throughout FY2020, growing ARR by 89% pcp to $1.5m, with 3-year CAGR 398%.

“The MGM SaaS School Communication business grew 25% pcp to $2.7m. SPACETALK Device Sales FY2020 SPACETALK device revenue grew by 53% pcp to $6.4m.

“Retail store shutdowns and other COVID-19 related effects in March impacted device sales, and as restrictions were eased sales bounced back. By June weekly sales were at pre COVID-19 levels. UK device sales were particularly affected by COVID-19, but in July as UK restrictions were eased, sales commenced rebounding.”

MGM Wireless (ASX:MWR) lists FY2020 highlights as:

  • Total Revenue grew 47% pcp to $10.5m
  • SPACETALKDevice Revenue grew 53% pcpto $6.4m
  • AllMyTribeAppAnnualisedRecurring Revenue (ARR) grew 89%pcp to $1.5m
  • AllMyTribe App Revenue grew180% pcp to $1.2m
  • MGM School Communication Revenue grew 25% pcp to $2.7m
  • Total SPACETALK business EBITDA contribution(excluding corporate overhead costs), improved from -$0.1m to $0.1m
  • MGM School Communication EBITDA contribution(excluding corporate overhead costs)improved by 58%from $1.2mto $1.9m
  • Net Cash at June 30,2020 $3.1m(excluding SPP$2.5m proceedsreceived in July

“We are now focused on continuing the expansion of SPACETALK distribution, the roll-out of our new SPACETALK Lifedevice for seniors, launch of our new SPACETALK Kids 2 device and further enhancement of our subscription app,” Fortunatow said.

“Vodafone commenced sales of SPACETALKthis week, and we are in ongoing conversations with further potential retail distribution partners. We commenced shipping SPACETALK Lifein July, which is receiving very positive customer feedback andattracting strong interest.

“We are well positioned to continue our growth in the current financial year.”

Other 2FY 2020 “notable” company developments listed by MGM Wireless are:

  • June 2020 – Entered into a new sales agreement with leading mobile network operator, Vodafone Hutchison Australia to sell theSPACETALK children’s mobile phone smartwatch in Vodafone retail stores. SPACETALK and Vodafone mobile network services will be bundled from $18.30 per month on a 3 year plan. Sales commencedAugust 17,2020.
  • June 2020 –Launched SPACETALK Life, a wearable smartphone, watch and GPS device for the senior’s market. The 4G,IP67 waterproof device is a significant Companyadvancement and opportunity for MGM and the Company’s shareholders, as it provides access to a large, new, rapidly growing market which is also complementary to our successful SPACETALK children’s smartwatch business. Customer shipments began in July 2020, and feedback from users and market interest is very positive.
  • July2020 -Successfully completed a capital raising to existing shareholders only,via a SPP at an issue price of $0.1075 pershare. The SPP was 360% oversubscribed, with $5.5m in subscriptions received. The offer size was increased from $1.5m to $2.5m.
  • May 2020 -Announced the appointment of experienced investment and finance expert, Mr Martin Pretty, and internationally recognised and awarded design expert, Dr Brandon Gien, as non-executive directors of the Board.
  • April 2020 –Early redemption from existing cash resourcesofall convertible notes on issue having a face value of $1.75m.
  • March 2020–Announced a new retail agreement with online retailer Kogan.com, to sell SPACETALK on the Kogan and Dick Smith websites across Australia and New Zealand.
  • February 2020 –Announced the award of a major $1.3mcontract from the Western AustraliaDepartment of Education to supply MGM Student Absence Notification Messaging Software and Services to all WA Government schools.

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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