Australia-based K2fly Limited (ASX: K2F) is a technology company specialising in the provision of software and services to businesses operating in complex asset intensive arenas such as Oil & Gas, Mining, Rail, Facilities Management, Water, Electricity, and Gas. K2F is helping business to achieve process improvements and transform digitally through the its amalgamation of excellent workforce, products and strategic alliances with leading global tech players including Esri (USA), GE(USA) and SAP (Germany).
K2F’s solutions enable a business to manage and maintain its physical asset data, deliver more effective and efficient outcomes, and empower them to make better informed long-term decisions. The company has multiple revenue channels including software licencing, consulting, support and configuration. K2F’s three key business segments -
Let’s understand K2F’s comprehensive suite of SaaS-based solutions and the vast market opportunity for the same.
Infoscope, an Enterprise Land Management, Natural Resource Governance and Stakeholder Relations solution for the Energy and Resources market. It provides dramatic efficiency and a smarter way for small and large business to manage their land and social license to operate, deliver governance, risk and compliance while engaging stakeholders with Spatial Intelligence. It is Integrated with SAP HANA & Esri’s ArcGIS.
A Mineral Resource and Reserve Reporting (MRRR) system that supports reporting codes such as JORC, NI43101 and SAMREC across the major stock exchanges – including NYSE, LSE, TSX, ASX and JSE. RCubed offers the only proven Commercial Off the Shelf (COTS) system across multiple clients, commodities, exchanges and codes. Appropriate Resource Governance and Reporting has become a fundamental governance pillar of any publicly listed resource company and its critical to get it right for investors, regulators, reputation and care of the core asset.
Gone are the days when a resource project proponent would undertake environmental studies on its own, fill out application forms and then move on to arranging project financing whilst also taking care of securing government approvals. The process of gaining government approvals is now complicated, and mandates that businesses not only present their environmental and economic credentials, but also the social credentials. Thus, gaining what is commonly referred to as the “social licence to operate” is mission critical since the early life of a project.
Participants in the energy and resources industry perceive ESG reporting (Environment, Social and Governance) as a source of differentiation, as younger people in particular, demand higher standards of governance and transparency from the companies they work for, and invest in.
The pre-dominantly inhouse systems, used by Tier 1 and Tier 2 Miners, are obsolete and reaching end of their life due to regulatory reasons. Besides, there is a generational change happening in MR leadership.
Most importantly, as the Securities and Exchange Commission (SEC) in the United States revamped the disclosure requirements for the mining company issuers on 31st October 2018, there has been a massive shift for US companies, that have now joined the league of countries like Australia, Canada and South Africa which have already been following CRIRSCO ( Committee for Reserves International Reporting Standards) reporting codes.
As a result, these US-based mining companies or the ones listed on the New York Stock Exchange (NYSE) would be required to comply with new rules, effective fiscal year commencing on or after 1 January 2021. These regulatory changes have dramatically increased demand for the RCubed solution.
The latest, most significant client signed by K2F has been Glencore Canada Corporation, a subsidiary of the Swiss multinational Glencore plc, amongst others.
K2fly’s Go to Market Strategy for SaaS Business is illustrated as follows:
K2fly’s SaaS business is well-positioned for significant growth with positive cashflow expected shortly. Although, RCubed is well proven, the US SEC regulation changes are driving an additional wave of demand for the same. Additionally, the company also recognises the increasing opportunity that exists in leveraging growing international customer base and its Infoscope technology to address rapidly evolving ESG requirements.
K2fly had an impressive financial year ended 30 June 2019 and the key highlights from its Annual Report FY19 may be READ here.
The stock of K2fly Limited (ASX: K2F) has a market cap of ~AUD 13.46 million and it has ~81.6 million shares outstanding. K2F stock last traded on 14th October 2019 at AUD 0.170 (AEST: 12:22 PM, 16 October 2019). K2F has delivered positive returns of 41.67% in the last six months and 30.77% Year-to-date.
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