The mounting pressures of rising costs, trade wars, and surging demand have taken a toll on Australia’s supply chain infrastructure, prompting businesses to reevaluate their strategies. In response to the supply chain crisis, civil construction and mining company NRW Holdings (ASX: NWH) has entered into a three-year contract with enterprise vendor management software provider Felix (ASX: FLX).
This collaboration aims to strengthen NRW’s supply chain management capabilities and navigate the complex challenges in the industry. As per the three-year contract, NRW will license Felix’s full suite of modules. The contract represents approximately 7% of Felix’s Contractor ARR as of Q3 FY23, amounting to about $252k.
Felix’s Co-Founder and CEO, Mike Davis, commented, “We continue to see increasing momentum for Felix in the market, driven by a clear shift in ‘know your supply chain’, ESG and legislative requirements such as the Modern Slavery Act. This is particularly pertinent in the mining sector, where we are observing strong traction, as evidenced by this recent win with NRW, along with other recent contract wins with industry leaders. We are excited for this to continue into FY24.”
In Q3 FY23, Felix reported significant progress in its financial performance. Contractor MRR (monthly recurring revenue) for the closing month of the quarter reached $298k, marking a 69% increase year-on-year, with ARR coming to $3.6 million. This growth was primarily driven by the onboarding of leading contractors and the expansion of existing customer accounts. Felix’s group ARR (annual recurring revenue) for the same quarter reached $5.6 million, reflecting a promising 23% improvement year-on-year.
The Company secured four expansion deals during Q3 FY23, contributing a total of $145k ARR. These expansions were the result of various factors, such as the licensing of additional modules, an increase in the number of users, and general contract renewals. Notably, Felix’s successful partnership with Primero, an NRW subsidiary, paved the way for the subsequent agreement with NRW itself. This demonstrates the value proposition of Felix’s solutions and its ability to expand into larger parent organisations within its existing customer base.
With Felix’s platform, NRW aims to standardise its procurement and supply chain management processes. Felix’s platform offers transparency and traceability throughout the supply chain, mitigating risks associated with disruptions.
NRW Holdings’ decision to partner with Felix comes at a critical time. The firm’s net debt rose from $66.6 million in H2 FY22 to $172 million in H1 FY23. Substantial capital requirements for mining projects primarily drove the increased debt. However, NRW Holdings has a robust pipeline of contracts worth over $2 billion. Plus, the collaboration with Felix’s supply chain management system is expected to strengthen NRW’s financial position.
The NRW agreement follows Felix’s recent enterprise contract wins with two leading ASX-listed mining companies. Felix ended thewith $4.5 million in cash.
Alinda is a Business Reporter for The Sentiment
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