The Australian landscape is dominated by extensive miners all over the continent, so making sure that their operations and reporting run smoothly becomes a vital part of their existence. K2fly (ASX: K2F) steps into this scene as a leading provider of platform-based SaaS cloud solutions to some of the largest miners, including Rio Tinto, Fortescue Metals, South32 and many others.
Seeking to drive further upgrades in their resources tech and upscale their sales initiatives, K2F successfully raised $6.2m via a strategic and institutional placement. The issue price of the Placement was $0.18, which was considered a premium to the 15-day volume-weighted average price (VWAP).
After announcing the completed Placement and its details, K2F shares reached an intra-day high of $0.235 which represented a 34% increase on their previous $0.175 close.
Maptek took up the majority of newly issued shares and was granted a 13.2% stake in K2fly for $4.05m, with Maptek’s chairman, Peter Johnson, joining the board as a Non-Executive Director.
“We are delighted to welcome Maptek as a strategic investor in K2fly and for Maptek’s Chairman Peter Johnson to join K2fly’s Board. The investment by Maptek makes it K2fly’s largest investor and represents a significant validation of the K2fly business and growth outlook by the world’s largest privately held mining software business,” said Jenny Cutri, Non-Executive Chair of K2fly.
Maptek will have restrictions for 12 months not to exceed a 19.9% shareholding.
Maptek specialises in software, hardware, and services for mining. Being one of the largest private mining software companies globally, K2F was keen to have them on board. Last year, Maptek recorded annual revenues exceeding $120m.
Outlined in the Company’s strategy, their SaaS platform is designed to bring in recurring revenues, which they wish to roll out globally. Currently, K2fly has strategic alliances with global technology companies in the USA, Germany, Japan, South Africa and the UK. With the strategic investment, the Company hopes this will accelerate growth.
In the Company’s most recent half-year report ended 31 December 2021, revenues clocked in at $4.5m, representing 34% growth year-over-year. In response to the growth, which included a series of acquisitions, the Company invested heavily in new staff to meet demand for upcoming projects in the resources industry where high commodity prices have seen many new projects initiated from prospective K2F clients.
As a result of these investments, the reported cost of sales grew 55% to $2.5m from $1.6m the year prior. Overall, the Group sustained a loss after tax for the half-year of $1.7m.
The Company booked a loss for the half-year following an investigation that uncovered suspicious payments totalling $745k which was conducted by former employees at their South African site. Included in their most recent report, the Company outlines a contingent liability of $323,500 which represents the loss from the missing cash.
Trading Desk Assistant at Emerald Financial
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