K2Fly (K2F.ASX)

K2fly’s vision is to become a provider of a range of Software as a Service (SaaS) solutions to the mining sector. Currently, the company is marketing its RCubed (Resource and Reserve Reporting software) and Infoscope (Land Management software) solutions to tier 1 customers around the world. K2fly’s software solutions are currently deployed or being implemented in 47 countries across more than 250 sites globally. SaaS sales account for approximately 33% of total revenue, however, the company’s objective is to grow this substantially over coming quarters.

key investment insights

UNIQUE TECHNOLOGY

K2fly offers multiple Software as a Service (SaaS) solutions, including Infoscope and RCubed. Their software enables Tenement management and Mineral Resource Governance for firms within asset-intensive industries. Infoscope provides holistic tenement management and is seamlessly integrated within client organisations. Infoscope ensures that critical tasks are monitored and completed on time, mitigating many prevalent industry risks.

RCubed was acquired in 2019, and is the most effective solution for mining companies to become compliant with changing SEC legislation, coming into effect in 2021. K2fly has leveraged its unique software solutions to respond to growing demand, and to develop its sales pipeline.

LICENSING PARTNERSHIPS WITH GLOBAL COMPANIES

K2Fly has negotiated reseller agreements with major global companies including General Electric, ABB, Kony, and AMT-Sybex part of Capita.

K2Fly has also begun working with Tier 1 clients such as Rio Tinto and Gold Fields.

LOW MARKET CAPITALISATION

The current EV of $17.76m for K2f is low relative to its growth potential, especially given the increasing demand for its software solutions. K2f is expected to facilitate rapid growth by onboarding additional Tier 1 clients, further responding to market demand.

SCALABLE, HIGH MARGIN BUSINESS

Since the acquisition of RCubed, K2fly has signed contracts with numerous mining companies, such as Rio TintoGold Fields Resources and Kinross Gold. Total contract value has grown to over $6 million, and Annual Recurring Revenue (ARR) has increased  to $2.09 million. Demand for this Solution is driven by changing SEC legislation and the rush to become compliant.

GLOBAL CUSTOMERS

Current Customers of K2fly include large resource, infrastructure and utility companies.

PROVEN MANAGEMENT TEAM

Brian Miller was co-founder of AMT-Sybex in Europe, which turned over $55m per year with a profit of $16m. The company was taken over by Capita for $127m in April 2014. He has the relevant knowledge and experience to make K2fly a success. His fellow board members, Neil Canby and James Deacon, also have extensive experience in asset intensive sectors and essential industries.

FUTURE OPPORTUNITIES

Mining companies and firms within asset intensive industries will continue to demand K2fly’s software solutions. Firms are still trying to become compliant with the SEC legislation, and numerous companies are looking to onboard tenement management software. K2f will continue to provide tailored solutions for industry needs.

infoscope now integrated within the sap s/4hana erp ecosystem

K2Fly benefits with a wider product offering and significant sales opportunities to large, global resources companies.

K2F infoscope
INFOSCOPE’S BENEFITS
K2FLY ACQUIRES RCUBED

In 2019, K2fly completed the acquisition of RCubed, a resource and reserve reporting software solution from Prodmark Pty Ltd. The software solution complements Infoscope, and enables K2fly to diversify its product offering. RCubed is also targeted toward asset-intensive industries, and has been a large driver of sales growth.

Read more.

INFOSCOPE PORTED ONTO SAP S/4HANA

Through the Co-Innovation Lab (COIL) program with SAP SE (Germany), Infoscope was integrated within SAP S/4HANA during April 2018. This has provided opportunities to branch out across the ecosystem.

SOLUTION DELIVERY

Infoscope is delivering a holistic solution for mining companies to manage their tenements on the SAP Cloud Platform.

INFOSCOPE AVAILABLE ON SAP APP CENTER

In June 2018, the Infoscope tenement management solution was added to the SAP App Store meaning that 70+ mining sales execs at SAP can now sell the software.

k2fly-sap-app-center
FUTURE OPPORTUNITIES

The United States Securities and Exchange Commission (SEC) has altered legislation regarding compliance, reporting, and governance within the mining industry. These changes come into effect in 2021, and are causing large corporations to search for solutions. This is where RCubed steps in.

Learn more about K2Fly’s Innovative software solutions

RCubed– (MRRR) Mineral Resource and Reserves Reporting 

RCubed offers the only proven Commercial Off The Shelf (COTS) system across multiple clients, commodities, exchanges and codes.

How RCubed Works
RCubed is a robust governance platform applied specifically for Mineral Resource and Reserves Reporting developed with Industry Leaders:

RCubed systemises work which was previously done through a complex and risky internal process, over reliant on individuals and spreadsheets.  Workflows are automated, and integrated with calendars and email. RCubed ensures a clear and transparent reporting cycle.  It provides full audit trails and and gives auditors as much information as they require.

It becomes the essential single version of truth from the last reporting cycle as far back as analysts would like. This data in turn is shared via management or reporting portals thus providing self service kiosks and removing the burden on the MRRR team to respond to multiple requests for data.  RCubed can become the single source of multiple and historical mineral planning and operational data.  RCubed manages all changes to regulations around mineral resource and reserves reporting of the NYSE, TSX, ASX and SAMREC for its customers.

Growing Global Customer Base

Recent Contract Wins

K2Fly has signed multiple contracts for their SaaS solutions which are listed below. The opportunity to cross sell other K2F solutions to existing customers is expected to be valuable for the company.

 

  • Total Annual Recurring Revenue (ARR) as at April 2020 is $2.09M

  • Total Contract Value (TCV) has grown to over $6M as more customers take up 3 and 5 year contracts

Some of K2fly’s many global clients

clients are from asset intensive industries

To discuss this opportunity please contact us