Mining is the act of removing any barriers, extracting what you need and (hopefully) complying with any regulations as cheaply as possible. The cost of extraction is basically all you can control and it if costs creep and the commodity declines, well it’s a quick trip to shut down. 

RPM have a suite of solutions that help with this cost equation. Indeed, they released a new solution just under 2 weeks ago which provides a tool to “evaluate capital investment strategies and mine plans of multiple operations to maximise the Net Present Value (NPV) of an entire mining organisation.” This is completely home grown using internal IP. What I missed from the announcement (as it wasn’t there) and would have been nice to see is an initial sale, or at least the name of a development partner customer. 

As well as the software just mentioned, the company has spent the last few years refreshing the software, and at the same time moving, as most of the market has done, from perpetual to subscription based licencing. This appears from the latest numbers to be almost compete, with 95% sold as subscription although there is still work happening in the software a service space. These are big software transformations, especially if there is a legacy coding platform or middleware.

There is a note that 4x new solutions are in the works with 3x due for release in the current half.

Interestingly there must still be perpetual licences in the wild as maintenance is still at $8.2M. If these are legacy solutions and the customer are yet to upgrade and convert to subscription that is fine, if they are being run to exhaustion with no plans, this is less positive. 

For the most part these solutions are sticky as the customers become dependent on them if they are delivering the intended value. The presentation showed many customers that have adopted new solutions. Nice work sales team. 

The environmental consulting is up considerably, but this on the back of 2x acquisitions. They seemed to have timed the market with these as ESG grows, especially in mining. Just ask Rio.

The number of acquisitions give me cause for pause, it is always tough to integrate and with 11 in period, this is a lot to take on. 

One more thing I like is the management team. Matthews is a software guy through and through. Half his direct reports Batkin (Product Strategy), Beesley (CTO) and O’Neill (General Counsel) have all been at RPM for about a decade and all worked together before that too.