Mighty Kingdom halts share trading ahead of proposed capital raise

The Adelaide-based game development studio is seemingly preparing for further expansion, suspending public trading in the meantime.
Ava's Manor Mighty Kingdom

Adelaide-based game developer Mighty Kingdom ceased its public share trading on the Australian Stock Exchange (ASX) this week, ahead of an impending announcement that will likely see the company enter a round of capital raising.

On 1 August 2022, Mighty Kingdom assets were placed on a trading halt on the ASX at the request of the company, and on 3 August 2022, the company put forward a voluntary suspension for its ordinary shares.

The company is reportedly in the midst of finalising documentation for a proposed raising of capital, and Mighty Kingdom has requested that the suspension remains in place until it ‘releases an announcement in relation to the outcome of the proposed raising’.

As noted by The Market Herald, the company indicated that the need for a capital raise would be likely in its June quarterly report. In the report, the company cites efforts to ‘ensure continuity of its operations’, including a ‘streamlining’ of the management team, making ‘decisive changes’, and to take on cost-cutting measures over the next quarter in an effort to ‘focus on revenue generation and cost reduction’.

This period also saw the company’s highest revenue quarter in history, with a 72% year-on-year increase and 51% quarter-on-quarter growth, suggesting that the company has objectives for further – and rapid – expansion.

Read: Mighty Kingdom has a vision for a better Australian games industry

The quarterly report also signalled the company’s intention to cease the ongoing development of mobile title Ava’s Manor, as the company refocuses on new projects with a ‘greater potential for return’. The team working on Peter Rabbit Run! has also been refocused. Sales for Conan Chop Chop were lower than the company’s projections.

Mighty Kingdom currently has several other projects in the works, including an original IP, ‘Project Ball Stars,’ which it is seeking a publishing partner for. Their co-development partnership with Canadian mobile group East Side Games remains – this includes the Star Trek: Lower Decks mobile game, as well as three additional mobile titles.

The company also continues to work on games based on licensed IP, like the Australian thriller film Carnifex and collectable toys Shopkins. Work for hire also continues on games like Gabby’s Dollhouse and Barbie Fashion Closet, as well as projects with Lion Studios and Google.

It’s also worth noting the company’s corporate costs (AUD $470,000), which include cash benefits paid to its directors – $67k for non-executive directors and $148k for executive directors for this quarter – are higher than the company’s actual operating costs (AUD $356,000). Mighty Kingdom also spends approximately AUD $4.2 million on its staff, by far the biggest operating cost.

The total operations spend for the quarter was AUD $3.6 million, and the company currently has AUD $3.8 million in the bank as of 30 June 2022.

In an interview with GamesHub in March 2021, CEO Philip Mayes cited that the company had ‘pretty ambitious plans‘ for what it wanted to achieve over the next decade, citing Mighty Kingdom’s rapid-growth mindset. The company has projected an image of itself as having a positive work culture and acting as a talent pipeline for the Australian games industry.

Edmond was the founding managing editor of GamesHub. He was also previously at GameSpot for 13 years, where he was the Australian Editor and an award-winning video producer. You can follow him @EdmondTran