MGM Wireless Limited (ASX:MWR) CEO, Mark Fortunatow talks about the company's world’s first children’s smartwatch safety device, its distribution deals with JB Hi-Fi (ASX:JBH) and Spark NZ (SPK:NZ), financials and expansion plans.
Jessica Amir: Welcome to the Finance News Network, I'm Jessica Amir, today with the CEO of MGM Wireless, Mark Fortunatow. Mark, welcome back to the network.
Mark Fortunatow: Thank you, Jessica.
Jessica Amir: So for those who aren't familiar, you're the leading provider of children's wearables, providing an all in one watch, phone, and GPS. Just tell us where the company's at today.
Mark Fortunatow: Well Jessica, the company's been going for almost two decades. And we're the company that discovered the use of text messaging in schools, so that schools can rapidly tell parents if the children haven't arrived. Now, when a parent receives a message like that, the child isn't at school when they expect them to be, the very next thing they ask themselves is, "Where are they?" Now we've being trying to solve this problem for quite some time. We've tried apps, we've tried different things. Then one day we thought, "Why don't we try to build an all in one watch, phone, and GPS device?"
Jessica Amir: So the smart watch itself, it's a bit like a Dick Tracy watch, so you can talk straight into it and it doesn't require a phone. That leads us to the next question: who is the target market?
Mark Fortunatow: The market is for kids before they get their own smart phone. So the kids can make and receive phone calls, they can send text messages with emojis, but only to the numbers that the parents set them up. So really it's a totally parent controlled device.
One of the features that the watch has is school mode. So the kids can actually wear the watch, which is a phone of course and GPS device, to school, but the parents can shut it down during school time so they can't get into trouble playing around with it during class time.
Jessica Amir: Now tell us about the agreement that you've recently signed with Spark New Zealand (SPK:NZ), and what it means to MGM.
Mark Fortunatow: They're selling already, Spacetalk, through all of the 73 shops, plus online, and through their resellers in the new year as well. So what that means is that people in New Zealand, parents in New Zealand, can go to their local Spark store, touch, try, and understand how the watch works, and best of all they can actually buy it on a plan. So for NZD$17 dollars New Zealand per month, they get the watch, they get the SIM card, and they're ready to go.
Back home, here in Australia, our devices are being sold by 197 JB Hi-Fi (ASX:JBH) stores. So what that means is that parents can just go to their local JB Hi-Fi store, they'll see the watches there on display, they can speak to the sales staff who will demonstrate the product, explain how it works. They can touch it, feel it, try it out before they buy it.
Jessica Amir: Now, can we move on to sales? Just give us an update on overall sales.
Mark Fortunatow: We announced two weeks ago that our revenue for the year already is up 181 per cent. And of course that's due to the new revenue coming in through Spacetalk sales from the likes of JB Hi-Fi, and New Zealand. That's even though at the very, very early stages of that. We're expecting significant revenue growth for the year, all on the back of Spacetalk.
Jessica Amir: And I understand that you're really significantly boosting your marketing efforts as well.
Mark Fortunatow: We're rolling out a significant advertising campaign. So that campaign involves online, but also tremendously large billboard advertising in 71 of Australia's leading shopping centres. So that's all very exciting for us. It's generating a lot of awareness and traffic to JB Hi-Fi, and of course through our own online store as well.
Jessica Amir: And so your share price has seen an extremely strong rally. Just give us a comment about that Mark.
Mark Fortunatow: Well the share price has grown tremendously over the last 12 months. But even today, when you look at how advanced our company is and our commercialisation success, and the fact that we're under pinned by a very strong existing school communication business, there's still along way up. We have a very well funded business plan, so we're fully funded in Australia. It's very unlikely we'll need to do any further capital raising. We're all set to go.
Jessica Amir: Just last thing before we let you go. Maybe you can just tell us about product development and what we can expect in terms of news flow over the next six months.
Mark Fortunatow: In terms of product development, our customers should expect to receive regular updates with new features. Over the last 12 months we've rolled out about 15 new upgrades. Things such as improved messaging for kids, emojis, weather reports. But moving forward we're clearly working on new products and new devices which we'll see rolled out next year. But we shouldn't forget that Spacetalk today is actually without question the best kid's watch on the market.
Jessica Amir: Well congratulations on your progress. We're looking forward to seeing you continue to grow. Mark Fortunatow, thank you so much.
Mark Fortunatow: Thanks Jessica.