Software provider K2fly has initiated a sweeping strategic review of its operations in a swift boardroom move designed to maximise the full potential of its innovative resource governance software solutions.
Despite already having secured a stellar cast of top-tier clients and after posting 13 quarters of increasing revenue on the trot, K2Fly has vowed not to sit on those laurels and has appointed Argonaut PCF and Atrico as joint advisors to steer its review.
Management says the terms of the review are broad and may include an assessment of strategic investments, merger and acquisition opportunities, partnerships and other potential corporate activity.
Perth-based Argonaut is an integrated investment and advisory house focused on metals and mining, energy and contractors that service the natural resource sector. Its study buddy Atrico works with small and mid-size technology companies to build shareholder value through strategic growth and transactions.
The duo has been tasked with assessing the strategic requirements and optimal corporate structures to help realise K2fly’s full potential.
K2fly chair Pauline Vamos said: “Despite continued high growth and significant addressable market in Resource Governance coupled with strong ESG tailwinds there has been a significant gap in how the equity market is valuing K2fly. As such it is the responsibility of the board to assess alternative capital structures to provide the best opportunity for continued success of K2fly and realise best shareholder value.”
The company has done the bulk of the grunt work developing and marketing its suite of software as a service (SaaS) products to provide resource governance solutions to the mining industry. Its software remains the only commercial off-the-shelf SaaS solution available globally for the mining sector to ensure proper resource compliance, technical assurance and disclosure.
It is work that has been widely recognised as the best-in-class in its sphere of operation, with the company boasting a string of global resource clients of the likes of Newmont Corporation, Rio Tinto, BHP, Roy Hill Holdings, Fortescue Metals Group, Anglo American, South32, Glencore, Westgold Resources, ArcelorMittal and AngloGold Ashanti.
K2fly works closely with peak industry bodies and regulators on environmental, social and governance topics that are driven by rapidly-changing regulations and community and investor expectations to build fit-for-purpose solutions that adhere to recognised codes and standards.
Its software licencing model is designed for recurring revenue, with contracts averaging 43 months and featuring annual payments in advance. Its “land-and-expand” strategy is aimed at providing clients with additional solutions to support central operational management and efficiency gains.
Renewable energy linear asset markets such as rail and pipeline and onshore oil and gas have already been highlighted by K2fly as opportunities to expand its services further into the massive global mineral and energy space. It is also looking at leveraging artificial intelligence to learn from existing customer datasets, while launching its expanded mineral resource governance suite.
Management says the strategic review will kick off this side of Christmas, with the full results expected to be available in the first quarter of next year.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
