AUS
NZ
UK
CA
USA
IND
Global Technology Company, K2fly Limited (ASX: K2F), with offices in Perth (Australia), Johannesburg (South Africa) and Denver (United States), recently presented at THE KALKINE INVEST-NEST 2020 CONFERENCE held in Sydney on 27 February 2020. The Conference, attended by established small-cap companies from varying sectors and industry experts, aimed at helping investors explore the current investment landscape and opportunities in Australia. K2fly was represented by its CEO Mr Brian Miller.
Mr Miller delivered a comprehensive presentation at the Conference. He elaborated on the Company’s buoyant business performance over the last six months when the Company transitioned from local to global business owing to its high-in-demand offerings to clients in the asset intensive industries across 47 countries (referring to the figure below).
Source: Kalkine Invest-Nest 2020 Conference Feb 2020
Mr Miller highlighted some impressive financial figures for H1 FY20 including total invoices of $ 3,083k, up 69% relative to $ 1,820k in the prior corresponding period (pcp) and revenue from ordinary activities up 45% to $ 2,653k from $ 1,829k in pcp, on the back of continued growth, new contract wins as well as sales to global Tier 1 clients.
The business momentum continued during the half year with major contracts wins for RCubed software solution from Newcrest Mining Ltd, Imerys SA, Glencore Canada Corporation, Rio Tinto Ltd and Nexa Resources. New and existing clients entered into multi-year contracts for Infoscope/RCubed, including Rio Tinto (5 years), Newcrest (3 years), Teck Resources (3 years) and Westgold Resources Ltd (5 years).
He also touched upon the many factors driving change in the global resources landscape such as finite declining resources, increasing transparency, increasing expectations of resource companies, ethical investing and growth in sustainability reporting. Of all these, the key developments underpinning K2fly’s growth have primarily been changing Regulations, ESG and technological evolution.
In the United States, the overhaul of SEC regulations around mining company disclosures (20F), designed to modernise the reporting standard and to bring them more in alignment with global reporting standards that comply with the CRIRSCO template such as JORC in Australia, has increased the demand for K2F’s SaaS -based solutions. Mr Miller pointed out that the prospects for RCubed are bright as 50 Resource Companies must comply by January 2021 including the world's biggest and RCubed is the only proven COTS (Commercial Off the Shelf) solution across multiple clients, commodities, exchanges and codes.
At the backdrop of very strong demand from US listed companies, Rio Tinto, Anglo Gold Ashanti, Teck Resources, Nexa Resources and recently Gold Fields, the K2fly board also decided in November 2019 to invest in sales capability in the US market in 2020. Subsequently, a six-month agreement was executed with Orbital RPM in January 2020 to represent K2fly in the North American market.
Mr Miller familiarized the audience with the three central factors in measuring the sustainability and societal impact of an investment in a company, that is, ESG (Environmental, Social, and Governance) Reporting. These are now considered as a fundamental governance pillar of any publicly listed resource company and K2fly’s SaaS-based offerings is a one stop solution for businesses to reinforce their social license to operate.
Source: Kalkine Invest-Nest 2020 Conference Feb 2020
ESG Reporting is considered as a source of differentiation now as the millennial investors demand higher standards of governance and transparency from the companies they work for or invest in.
Throwing light on the pace of technological advancement, Mr Miller captured the fact that the pre-dominantly inhouse systems used by Tier 1 and Tier 2 Miners are becoming obsolete and reaching end of their life. However, cutting edge RCubed and Infoscope solutions are helping clients to manage and maintain their physical asset data, deliver more effective & efficient outcomes and make well informed decisions.
Source: Kalkine Invest-Nest 2020 Conference Feb 2020
Consequently, K2fly is presently experiencing rapid sales growth in its SaaS business. Entering into 2020, Mr Miller stated that the company is leveraging its growing international customer base and Infoscope technology to address rapidly evolving ESG obligations.
Mr Miller concluded that with increasing adoption of the Company’s SaaS-based solutions, there are likely to be other significant opportunities for K2fly in improved procedural, governance and market reporting opportunities including Tailings, Environmental, Sustainability, Global Land Management, and Ground Disturbance, which could come to fruition within FY20. The company is strongly positioned to capitalize on these opportunities with cash at bank of $ 1.145 million as at 31 December 2019.
Stock Info: With a market capitalization of around $ 17.34 million, the K2F stock is currently priced at $ 0.190 (as on 02 March 2020, 12:21PM, AEDT), having delivered positive returns 46% in the last one year.
