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Summary
- K2fly has released its FY20 Annual Report and maintained that the company had an exceptionally positive year.
- K2F reported FY20 revenue of AUD 5.6 million, up by 48 per cent, ARR increased to AUD 2.37 million, CAGR 177 per cent.
- The global customer base continued to expand amid uncertain pandemic situations all over the world.
- The sales of RCubed SaaS solution to Tier 1 and 2 mining companies have been extremely successful, and the software helped K2fly get significant resource clients in FY20.
The technology company, K2fly Limited (ASX: K2F) works closely with the asset-intensive industries and offers two software solutions - RCubed and Infoscope to these businesses.
On 28 August 2020, K2fly released its FY20 Annual Report and the Chairman, Jenny Cutri, in her report to the investors, stated that the company maintained an aggressive growth trajectory.
Here are a few major highlights:
Revenue: Despite the economic turbulence, FY20 was an extremely positive year for K2fly. Revenue continued to grow with total revenue for FY20 reported at AUD 5.6 million, an increase of 48 per cent on the FY19 revenue of AUD 3.79 million.
Image source: K2F’s announcement (28 August 2020)
The SaaS, Annual Recurring Revenue (ARR) has risen to AUD 2.37 million, which represents a Compound Annual Growth Rate (CAGR) of 177 per cent. The Total Contract Value (TCV) for SaaS contracts is now nearly AUD 7.47 million, a whopping CAGR of 663 per cent. The average contract terms are now more than three years, at 3.16 average SaaS contract term.
Image source: K2F’s announcement (28 August 2020)
During Q4, K2F achieved strong net positive cash flow of AUD 0.66 million from operations. As at 30 June 2020, the company had a cash balance of AUD 2.92 million and AUD 1.13 million in aged receivables mainly from Tier 1 clients with no debt.
Global customer base balloons in FY20: K2F global customer base increased amid the uncertain Covid-19 period. To date, the company has been relatively immune to this pandemic and has grown successfully, particularly in the past six months.
Image source: K2F’s announcement (28 August 2020)
Infoscope and RCubed, are two of K2F’s foundational pieces of Intellectual Property (IP). By July 2020, K2fly had over 460 sites across 45 commodities and 54 countries where its IPs were either deployed or being implemented.
In January 2020, K2fly engaged a sales resource in Denver Colorado with a seasoned sales and account representative to service K2F's expanding client list in North America which was then Teck Resources, and Glencore Canada. Since opening the US operation, K2fly signed Newmont Gold in Denver and Kinross Gold in Toronto.
K2fly continues to deliver consultancy and implementation services to businesses in Australia and the UK. In the past 12 months, the company has undertaken paid work with clients: South Australian Water, Arc Infrastructure, SNC-Lavalin, Western Power, Fortescue Metals Group, Horizon Power, New Hope Group, Stanwell Energy, IGO, Public Transport Authority, Programmed, ABB and COSOL.
Sales report in FY20: The sales of RCubed SaaS solution to Tier 1 and 2 mining companies has been remarkably successful. In Q4FY20, K2F achieved the final milestone in the revenue acquisition performance milestones for RCubed, which was planned to accomplish in three years.
RCubed solution helped K2F in getting notable resource clients in FY20. These include - Rio Tinto, Newcrest, Goldfields, Newmont, Sibelco, Kinross Gold, Imerys, Glencore Canada, Nexa Resources, Orano SA and South 32.
Related: K2fly Confirms a 5 Year SaaS Deal with South32
Furthermore, existing SaaS clients of K2F's RCubed and Infoscope solutions extended their licensing agreements: Teck Resources by three years, Westgold by five years, and AngloGold Ashanti by three years.
K2fly is working with Decipher, an award-winning cloud monitoring platform and a subsidiary of Wesfarmers, to create an integrated monitoring and governance platform for Tailings Storage Facilities.
Also read: K2fly, Decipher's MOU to create Tailings Storage Facilities solutions globally
Equity Raising in FY20
In September 2019, K2fly completed an AUD 1.0 million placement (before costs) to institutional, sophisticated, and professional investors. In 2020 a total of AUD 1.719 million (before costs) was raised from the exercise of listed options exercisable at AUD 0.20 per option which expired on 18 May.
The exercise of the Listed Options was partially underwritten by K S Capital Pty Limited and no discount to the exercise price was offered.
Stock performance: On 1 September 2020, at AEST 12:34 PM, K2fly was trading at AUD 0.400 with a market cap of AUD 36 million. In the last six months, the shares of the company appreciated by 102.63 per cent.
