New mining deals propel K2fly into record sales airspace
ASX-listed software-as-a-service provider K2fly has achieved strong business growth momentum heading into its new fiscal year with surging revenues and invoicing in the June quarter rounding out a successful FY2021. During the financial year K2fly landed significant new contracts with large miners which saw it invoice A$2.54 million in the June quarter, up 34 per cent year-on-year, bringing FY21 invoices to $7.8 million.
K2fly, provides enterprise-level environmental, social and resource governance software to mining and other companies and has been rapidly developing its “software as a service” business that creates annual recurring revenue streams – a key metric often used by software businesses. The company booked $3.38 million of annual recurring revenue in the 2021 June quarter and exited FY21 with $9.9 million worth of contracts in hand.
The numbers were up 50 per cent and 48 per cent respectively on FY20 fourth quarter levels.
K2fly says it is looking to grow its annual recurring revenues from $8-10 million to $20 million over the next 2-3 years through its “land and expand” strategy of extending customer use of its software-as-a-service, or “SaaS” offering and proprietary software. It has already landed four of the world’s largest iron ore producers and half the world’s top 10 gold companies.
K2fly is also targeting the energy, utility and agriculture markets for growth.
The company recently raised $7.25 million in equity funding at 29c a share to help drive its expansion. It has a current market value around $45 million trading at 32c and an enterprise value of circa-$36 million with cash and receivables at the end of June of about $9 million and no debt.
A “milestone” $2.44 million deal signed in the June quarter with WA iron ore producer Roy Hill, built on a maiden sale of its full “SATEVA”-based mine technical assurance software suite, was the exclamation mark on a period of significant new sales for the company.
Management said additional sales in the quarter included a three-year contract to add the company’s “Maximum Return” mine data management offering to its existing Rio Tinto Iron Ore supply and service arrangement, worth $750,000, and a plus-$200,000 sale of its Decipher land access reporting product to South Australia uranium miner Heathgate Resources.
K2fly also recently signed a $1.45 million contract extension with Twiggy Forrest’s Fortescue Metals Group to extend the use of its land management and reporting software from FMG’s WA base into its international operations.
A “major new release” of K2fly’s cornerstone “RCubed” cloud-based mineral resource and reserve governance, compliance and reporting software is slated for early 2022. The company is also working on enhancements to its mine technical assurance and tailings management offerings.
Management said: “Our investments are working towards creating both new products and capability to meet our rapidly growing pipeline. We are confident that these investments will add immediate and long-term value to K2F.”
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