Australia has a lot more anxious parents than child-tracker MGM Wireless thought.
MGM (ASX:MWR), which sells a device called Spacetalk that tracks the whereabouts of children, now expects to sell 120,000 to 180,000 units in Australia after stronger than expected initial sales.
Spacetalk is a $350 children’s phone, GPS tracker and watch that allows parents and children to be in constant contact. It can send an alert to a parent when a child leaves a designated “safe space” such as school or home.
The company said in September it needed to sell 10,000 watches in the following year to double revenue.
Since launching the product in October, MGM now says it has exceeded sales targets by more than 150 per cent – and projects the market to be worth between $30 million and $60 million a year.
The shares jumped 15 per cent to 77c in Monday morning trade, valuing the company at $6.5 million.
“We are building a significant and enthusiastic community of users that is approaching 3000,” chief and co-founder Mark Fortunatow said.
“Sales of Spacetalk are very strong and have significantly exceeded our most optimistic internal targets leading into Christmas.
“Since then, sales are also excellent. Discussions with Australia’s leading retailers is underway — and their interest is very strong.
“In fact, these leading retailers tell us that in their view, the market size is much larger than we originally estimated — and our own sales results support this view.”
Despite the enthusiasm, Mr Fortunatow said overall revenue for the year was likely to be similar to the previous year — $2.62 million.
“Preliminary accounts indicate an approximately break-even net profit for the half year, which is down from the previous corresponding period largely due to Spacetalk launch costs.”
The company’s Spacetalk Device will show at the Mobile World Congress in Barcelona later this month, in the hope of attracting international markets – in addition to the trial already commence with a South-East Asian distributor.
In a second product upgrade, the company has added a stopwatch, torch and ‘school mode’ to the device — allowing parents to select which watch function to disable during school hours, such as incoming and outgoing calls or messaging.
Business Insider Emails & Alerts
Site highlights each day to your inbox.