K2fly Ltd (ASX:K2F) has enjoyed a productive year, winning a range new clients for its software solutions and consultancy services and setting the stage for further growth in 2021.
New named clients include Newcrest Mining Ltd (ASX:NCM), Glencore PLC (LON:GLEN) Canada, Nexa Resources SA (NYSE:NEXA), Rio Tinto Limited (ASX:RIO), Gold Fields Australia (a subsidiary of Gold Fields Limited (NYSE:GFI)), South32 Ltd (ASX:S32), Newmont Corporation (NYSE:NEM), SCR-Sibelco NV, Kinross Gold Corporation (NYSE:KGC), Vale Australia, Orano SA, South Australian Water, Stanwell Energy and New Hope Energy.
Additionally, new and existing clients entered into multi-year contracts for the Infoscope or RCubed software solutions with an average contract term of more than three years.
SaaS revenue growth
The proportion of K2fly’s revenue from software and Software as a Service (SaaS) subscriptions business increased with the annual recurring revenue growing to over A$2.37 million (or a 177% compound annual growth rate) and the total contract value increasing to more than A$7.47 million.
With the additional contracts entered into for K2F’s RCubed software solution, this resulted in the final milestone in the three-year revenue acquisition performance milestones for RCubed being achieved in just 13 months from acquisition.
Notably, K2Fly’s five-year SaaS deal with South32 will allow the company to use the RCubed resource governance solution across 19 sites globally.
The total contract value is A$880,000 and this will allow South32 to use RCubed for its mineral inventory reporting for five years.
Tailings storage governance solution
Decipher offers a cloud monitoring platform, to create an integrated monitoring and governance platform for tailings storage facilities (TSF).
The businesses combined their complementary technology strengths to create a solution that would assist mining and resources companies to manage these risks, and ensure industry has access to a significantly better tool to aid monitoring and governance of TSFs to recognised standards.
Decipher and K2fly have commenced discussions with several global miners about the proposed tailings management solution, which can also be deployed remotely during COVID-19.
During the year, the company continued to explore for either complementary software solutions or businesses, announcing the acquisition of SATEVA, an entity that is involved in the mining technical assurance area, in October.
SATEVA is highly experienced in developing and providing innovative software solutions and IT consulting services to top tier mining, resources and rail industries including RIO Tinto Iron Ore, Fortescue Metals Group Limited (ASX:FMG) and Roy Hill.
The company’s Block Model Management (Model Manager) solution will dramatically improve and simplify model management for multi-site global miners, as well as provide a direct line of sight and governance from the block model to the annual inventory report.
Because block models are aggregated to produce annual mineral resources and reserves reports, the Model Manager is highly complementary to K2Fly’s RCubed software solution.
SATEVA was successfully integrated into K2F within one month of the acquisition announcement and Model Manager was officially launched.
SAP-endorsed Apps Certification
Other achievements during the year include the company’s certification as an SAP Endorsed APP.
Endorsed Apps complement and extend SAP products and are designed to deliver value with desired outcomes in a timely manner with support from SAP.
The solutions are tested and premium certified by SAP with added security, in-depth testing, and measurements against benchmark results.
This Endorsed Apps partnership program is by invitation only and to date, only 12 companies have been certified globally.
Scaling up SaaS offerings
SAP can boast 98 of the world’s top 100 mining companies as customers and complements the company’s goals to scale-out SaaS offerings globally.
The initial focus will be via the SAP Mill Products and Mining Industry Business Unit but will extend from there.
SAP’s global mining advisory council was instrumental to kick off the development of K2fly’s new solution for Tailings Reporting and Governance which is due for release at the end of this year.
The company’s vision looking forwards is to be a trusted partner of choice to enterprise customers in asset-intensive industries.
FY21 strategies include:
- To grow organically by increasing annual recurring revenue (particularly SaaS) and diversifying revenue;
- Continuing the ‘land & expand’ strategy with existing client base by demonstrating the increased benefits of adding K2F solutions together in the client’s ecosystem;
- Operating in a financially sustainable manner;
- Continue to improve and broaden current software solutions in line with customer demand; and
- Continue to grow inorganically, through complementary acquisitions.