International deal with Spark Telecom Secured!

MGM just keeps kicking goal after goal. First international deal secured with write up in today AFR

https://www.copyright link/technolo...ireless-back-to-pregfc-levels-20181102-h17fl2

Children's smartwatch maker MGM Wireless has scored its first overseas deal, with New Zealand telco Spark agreeing to stock its devices in 73 of its stores.

The deal comes as investors continue to reward the business for its shift in strategy away from its traditional schools SMS service to kids' smartwatches.

In the past 12 months MGM's share price has jumped more than 751 per cent to $3.15 per share, but chief executive Mark Fortunatow said it had plenty of scope to climb further.

"Looking at the capital structure of the company, even at this share price our market cap is less than $40 million. Arguably we could be three, four or five times higher than that and should be," he said.

"We only have 11.8 million shares on issue because we've been profitable for almost 15 years. Until recently we hadn't done any capital raises for nine years.


"You could argue that we're worth north of $100 million because we have a successful product and we're growing sales at lightning speed."

MGM's share price has not traded this high since before the global financial crisis.

Its original SMS messaging service for schools is used by up to 2000 schools across the country to let parents know when their kids have not arrived at school, as well as keeping them informed about events and news.
The business listed in 2003, but as the cost of SMSs dropped and free online messaging services such as WhatsApp emerged, it was forced to look to new revenue options.

'I'm very grateful and humbled by the success of the company'

The Spacetalk smartwatches, which let parents keep in touch and track their children, took MGM three years to develop and were funded by the company's profits.
"I'm very grateful and humbled by the success of the company. I remember when we first thought about this project five years ago and it was such a ridiculously ambitious project to undertake it felt like flying to the moon and back would be easier," Mr Fortunatow said.
The watches are already now stocked in more than 270 stores, including JB Hi-Fi, with the business having sold 8000 devices. After Christmas, it hopes this number will be above 20,000.

Its latest deal with Spark New Zealand came about after the wife of Spark New Zealand CEO Simon Moutter bought some of the company's watches for her kids and was impressed with their performance.
"They reached out to us and we started talking and sharing our results and they were thinking about how to enter this connected family emerging market themselves, so they thought why not do it with Spacetalk," he said.
"There's a great deal of work for a mobile network operator to take on a new product from a new supplier, so there was a great deal of network, device and security testing."
Mr Fortunatow is hopeful the Spark deal will be the start of many overseas contracts, with Europe its next target market.

"No one really knows how big this market is. Gartner says it's 120,000 to 180,000 units per year in Australia, so it's a big market and we have the best product … and it's selling extremely well."