K2fly : Half Yearly Report and Appendix 4D

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Appendix 4D

K2FLY LIMITED

ABN 69 125 345 502

Half-Year Report - 31 December 2021

RESULTS FOR ANNOUNCEMENT TO THE MARKET

(This information should be read in conjunction with the last annual report and any announcements to the market by K2fly Limited during the period)

Revenue from ordinary activities

(Loss) from ordinary activities after tax attributable to members

Net (loss) for the half year attributable to members

Half-Year	Half-Year
Ended	Ended	Amount	Percentage
31/12/21	31/12/20	change	change
$A	$A	$A	%
4,576,634	3,412,994	1,163,640	34%
(1,717,586)	(1,067,666)	(649,920)	61%
(1,717,586)	(1,067,666)	(649,920)	61%

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Comment

K2fly reported revenues of $4.5m for the half year ended 31 December 2021 (H1FY22), which represented 34% growth compared to the result for the half-year ended 31 December 2020 (H1FY21) ($3.4m).

In response to recent growth, including through acquisition, and to establish a stable foundation for expected future growth, during H1FY22 the Group invested in staff to meet the contracted and expected demand for new projects, expansion of existing projects, and in its management function. As a result of these sales and investments, the K2fly reported cost of sales of $2.5m, 55% higher than the H1FY21 cost of $1.6m. Employee benefits expense H1FY22, which included $0.3m of recruitment costs, increased to $2.7m (H1FY21 - $1.5m) and consultancy expenses increased to $0.4m (H1FY21 $0.2m). These costs of labour and project resourcing, and talent sourcing, has been impacted by global labour market constraints, as well as the need to recruit and train staff in advance of project commencement.

Overall, the Group reported a loss after tax for H1FY22 of $1.7m, which included $0.3m of non-cash share- based payment expenses for options issued to staff and advisors (refer note 14), $0.5m of non-cash amortisation expenses, which included amortisation assets acquired in the prior financial year, and a $1.1m benefit from the recognition of a one-off deferred tax asset to offset a related and previously recognised deferred tax liability (both non-cash) associated with the acquisition accounting of Decipher.

Dividends (distributions)

There are no dividend or distribution reinvestment plans in operation and there have been no dividend or distribution payments during the half-year ended 31 December 2021.

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Net tangible asset per ordinary security	31 Dec 2021	31 Dec 2020
Net tangible assets	(3,207,702)	(2,637,152)
Number of shares on issue at reporting date	138,097,038	100,787,377
Net tangible asset per ordinary security	(2.32 cents)	(2.62 cents)

Control Gained or Lost over Entities

Not Applicable

Associates and joint ventures

Not Applicable

Audit / Review Status

This Appendix 4D and the attached interim financial statements are based on accounts which have been subjected to review by the Group's auditor.

The Group recently became aware of discrepancies between its records in relation to employee tax obligations in South Africa and the records of the local taxing authority. As disclosed, the Group has appointed an external advisor to investigate the matter and that investigation is ongoing. As a result of the ongoing nature of the investigation, the auditor qualified their review opinion on the basis that they do not have sufficient audit evidence to form a view on the completeness of the Group's liabilities and as such cannot determine whether any adjustments are likely.

A contingent liability of $323,500 has been disclosed. (Refer note 17 - contingent liabilities).

		Previous
	Current	corresponding
	period	period
Basic (loss) per share in cents	(1.24) cents	(1.12) cents

Independent Auditor's Review Report

The Independent Auditor's Review Report can be found on page 8 of the attached financial report for the Half Year ended 31 December 2021.

Jenny Cutri	Neil Canby
Non-Executive Chair	Non-Executive Director
28 February 2022	28 February 2022

The information required by listing rule 4.2A is contained in both this Appendix 4D and the attached half-year report. This half-yearly reporting information should be read in conjunction with the most recent annual financial report of the company.

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K2fly Limited

ABN 69 125 345 502

Financial Report

For the Half-Year Ended

31 December 2021

CONTENTS

	CORPORATE DIRECTORY
only	DIRECTORS' REPORT
AUDITOR'S INDEPENDENCE DECLARATION
	CONDENSED STATEMENT OF COMPREHENSIVE INCOME
	CONDENSED STATEMENT OF FINANCIAL POSITION
use	CONDENSED STATEMENT OF CHANGES IN EQUITY
CONDENSED STATEMENT OF CASH FLOWS
	NOTES TO THE FINANCIAL STATEMENTS
	DIRECTORS' DECLARATION
For personal	INDEPENDENT AUDITOR'S REVIEW REPORT

K2fly Limited Half-Year Report 31 December 2021

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CORPORATE DIRECTORY

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DIRECTORS

Brian Miller(Executive Director)

Jenny Cutri (Non-Executive Chair)

Neil Canby (Non-Executive Director)

James Deacon (Non-Executive Director)

JOINT COMPANY SECRETARIES

Melissa Chapman

Catherine Grant-Edwards

REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS

Level 4

502 Hay Street Subiaco WA 6008 Telephone:[phone] Website: www.k2fly.com

SHARE REGISTRY

Advanced Share Registry

110 Stirling Highway

Nedlands WA 6009

Telephone: [phone]

Facsimile: [phone]

AUDITORS

HLB Mann Judd (WA Partnership)

Level 4

130 Stirling Street

Perth WA 6000

Telephone: [phone]

AUSTRALIAN SECURITIES EXCHANGE

K2fly Limited's Shares (K2F) are listed on the Australian Securities Exchange

K2fly Limited Half-Year Report 31 December 2021

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