The K2Fly Ltd (ASX: K2F) share price is up 5% higher today on news that its newly-acquired Sateva business is exceeding expectations.
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The K2Fly share price reached an intraday high of 34 cents in mid-afternoon trade, before retreating slightly to close at 30 cents, up 3.39.
What’s moving the K2Fly share price?
In today’s release, K2Fly advised that it has received more than $850,000 in new purchase orders from its Sateva business. In comparison, when Sateva was a standalone company, it achieved revenue of $1.4 million for the entire 2020 financial year.
K2fly, an asset management consulting service, formally acquired Sateva in November last year through a share sale agreement.
The company attributed its sound sales performance to Model Manager – a block model management tool within the Sateva suite. K2Fly reported that major mining companies within the iron ore industry have taken up the specialist software.
In addition, K2Fly revealed that it has trialled a new automated ore blocker solution at a major iron ore producer site in Western Australia. The company has entered contract negotiations with two major mining companies based on the strong results. K2fly forecasts its current client list to grow at a rapid pace.
The final result of the trials is expected to be released to the company’s global mining partners from next month.
K2Fly chief commercial officer Nic Pollock welcomed the positive result, saying:
We couldn’t be happier with the timing of the Sateva acquisition and the opportunities it presents for us to better service the global iron ore producers, particularly here in our home patch of Western Australia.
With the purchase orders already received we are clearly over-performing on the first element. We are also very pleased at the response of our customers to the new product offerings which are incredibly timely for the iron ore industry, as well as other bulk open pit mining operations like gold and copper.
K2Fly share price summary
The K2Fly share price has had a strong run over the past 6 months, reaching a 52-week high of 42 cents in October. Its shares have dipped lower since November, but the K2Fly share price has regained some composure in its increase today.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.