I had originally been expecting a dip in sales for January following a peak in Christmas. Instead, the January update confirmed that app downloads (which correspond to consumer purchases) in Jan were at 50% of all historic sales. That doesn't translate to the same thing for MGM Jan sales as JB sales don't necessarily correspond to JB purchases from MGM. However it is the consumer purchases that are reflected in the applyzer figures and the consumer purchases are what drive further retailer purchases from MGM. The applyzer app gave a strong indication that Jan sales were going at levels comparable to December and the company confirmed this in their latest update. After the Jan discount ended, I had even bigger expectations of a dip in Feb. Instead, Applyzer was hinting at a very strong start to Feb but by mid Feb it was dropping off before picking up again late Feb and early March. Last night I had a look at the download ranking for Feb compared to Jan by entering each days ranking into a spreadsheet and calculating the average ranking for each month. Encouragingly, the average download ranking for Feb was 47 and the average for Jan was also 47. That suggests that despite the price reverting to RRP in Feb, sales appear to have been just as strong as Jan sales. Despite a weaker than some of us might have expected Dec., sales since have been much better than I was expecting with no indication of any post Christmas, seasonal slowdown. From here on I'm starting to expect same store growth quarter on quarter. UK next month, new products and probably Telstra later in the year. Why is any one selling? I think some of this selling again coincides with the drawdown of the convertible note facility where holders can sell physical shares to maintain their exposure and their cash levels. It is a pure guess but it seems to me the most plausible reason for any significant selling here and over the last month. Maybe also nerves over whether the rally in US markets continues or not. Whatever the reason, the company is continuing very well.
MWR Price at posting:
$3.24 Sentiment: Buy Disclosure: Held
