Mighty Kingdom announces Canadian deal as shares make a steady start

Mighty Kingdom shares have made a steady debut on the ASX, with a new Canadian deal announced.

Phil Mayes, Mighty Kingdom managing director. Picture: James Elsby

Mighty Kingdom shares jumped as much as 10 per cent on debut before settling back to trade just above the 30c listing price in early trade.

The company also announced a multi-year deal with Canadian mobile game developer East Side Games, a subsidiary of LEAF Mobile, which involves developing a sci-fi game for global release next financial year.

The Adelaide-based games developer raised $18m at 30c per share, with the money to be used to boost its suite of in-house and licensed products.

In early trade the stock was changing hands at 31c, with more than $900,000 worth of stock traded.

In a statement to the ASX, Mighty Kingdom said it was chosen to partner with East Side on the new title, on the strength of its “narrative engine” intellectual property.

In an investor presentation released to the ASX on Wednesday, the company said it has developed a “world-first, proprietary narrative engine that underpins its game development’’.

“The narrative engine streamlines development, by allowing designers, animators and artists to create narrative (storyline, game play, atmosphere and characters) with minimal input from software engineers (coders),’’ the company said.

Mighty Kingdom - chair Michelle Guthrie, MD Phil Mayes, chief operating officer Tony Lawrence, and (standing) non-executive directors Gabriele Famous and Megan Brownlow. Picture: James Elsby

“The narrative engine also seamlessly integrates narrative content into the game, bringing it to life with little input from the engineering team.

“Less reliance on in-demand coders sets Mighty Kingdom apart, enabling the company to efficiently hire and foster talent with alternate skillets.’’

The company says it also uses a testing model which assesses interest in titles and gives the company an understanding of the cost of customer acquisition and retention “which informs financial modelling and returns on publishing/marketing expenditure’’.

In a pre-listing disclosure the company reported it had grown revenue from $972,744 for the first half of FY2019 to $1.52m, and reduced its first half loss from $2.9m to $1.7m.

Mighty Kingdom was founded by managing director Phil Mayes in 2010, and has developed games for global brands such as Lego, Disney and Shopkins.

A game developed to coincide with the release of Sony’s Peter Rabbit 2: The Runaway is scheduled for release soon.

Michelle Guthrie, who chairs the company, said this week that the capital raising would give the company the opportunity to bolster its already 110-strong team.

“With the very strong developer team of more than 100 developers now I think there is a strong opportunity to create our own IP,’’ she said.

Mighty Kingdom develops games across all platforms including consoles and PCs, however is mostly focused on mobile games.

The company said that since its formation it has released more than 50 games, which have been played by more than 50 million players worldwide.

Titles include Shopkins, LEGO Friends: Heartlake Rush, Gabby’s Dollhouse, Wild Life and Ava’s Manor.

The company has a pipeline of games planned for release this calendar year including the multi-platform release Conan Chop Chop, and Peter Rabbit Run on iOS and Android.

Mr Mayes will own 52.5m shares, representing 30.8 per cent of the company, on listing.

Adelaide Equity Partners acted as Mighty Kingdom’s corporate advisers with CCZ Statton Equities lead manager for the IPO.