Arcontech Share Discussion Threads

[janeann] 16/1/2018 16:36

well a few shares sold - a mere c10k can make all the difference. Hopefully those top slicing on the recent high will have them back!

[gleach23] 16/1/2018 16:30

and now suddenly one can only sell 750 shares @ 61p whilst there are over 10k available @ just over 63p!

[janeann] 12/1/2018 15:55

interesting - that explains that - mine was the 3501 on the 29th for the same reason! I stll have plenty! Just shows how easily it moves!!

[gleach23] 12/1/2018 14:45

I also recently sold 5k (the very last trade of 2017) for exactly the same reasons as taffy.

Whilst I have a core holding, having watched it for the last year or so I like it as a trading stock.

So it's probably just be like minded PIs janeann.

[taffy100] 12/1/2018 11:16

The 5K sell today was mine. Only rebalancing my portfolio. Made quite a bit on this one and left my portfolio unbalanced.

[janeann] 12/1/2018 10:46

seems to me we have someone selling blocks of 5k on a near daily basis. Certainly explains the weakness at present.

[bones] 29/12/2017 17:28

Some crafty buying ahead of year end has edged the share price toward 70p. I believe there are several drivers that could see further price appreciation:- Solid growth in turnover from existing business;- Potential for new products to be taken on by Tier 1 banks;- Marketing efforts in Asia- Continued tight cost control- Continuing positive cash flows- Dividend increase- Possible M&A in the right circumstancesI look forward to hearing about progress in the next update.A good New Year to everybody!

[bones] 29/12/2017 16:55

Market makers seemingly have little stock just now. A few small purchases scared them all away with just a couple of sellers tempted by the 68p bid available just before close.What happens on any "better than expected" or new Tier 1 contract news? Could be a swift move up on that situation.

[gsbmba99] 28/12/2017 23:34

The revenue growth you quoted of 7%, 1% and 8% includes, I believe, the loss of a significant customer. This was the Asian customer whose contract was terminated early. As I understand it, the customer agreed to purchase the software but never actually installed it. The company ended up negotiating a year's revenue in exchange for early termination. the company, however, did manage to grow through this period despite the challenge of replacing the customer.

If you are looking to where ARC could be valued in the future (after many years of successful growth with lower customer concentration), have a look at StatPro (SOG). They offer portfolio management SaaS to asset managers. The organic constant currency growth rate has been near zero for quite some time, development expenditure is high and is capitalised, it produces very little free cash and, yet, it trades on a high 20s current year P/E, low 20s next year (CY18).

[gsbmba99] 28/12/2017 23:22

Adamb - I asked the same question about annualised recurring revenue as I (being a cynic at heart) thought it was suspicious that it was absent in the most recent results. I was told that the company had found it very useful during the period while it was still loss making to project growth forward but less so as a profitable company. They also said that they had been asked to rethink KPIs more generally by their accountants and it got dropped. I didn't sense anything sinister in the response. If you take 2H17 revenues and double it, you'll probably get pretty close. The only thing missing from that would be ARR from the initial Tier 1 customer for the new product. Additionally, there was a statement in the full year results about not having received any termination notices during the year. I also questioned this as I thought they might have been playing with words to hide, for instance, a contract that lapsed at the end of the contract period. I was told that all contracts automatically renew unless cancelled. I also asked about the shifting definition of geographies in the revenue by geography disclosure and was told this was done to mask competitively sensitive customer location info.

[bones] 28/12/2017 23:14

Yes, Adam, I can agree that the interims are likely to be key to seeing if they are accelerating their growth. In that regard I tend to take the plunge with an opening position "just in case". I added more in fact today just to be stubborn in that view!I also like that they are trialling new products with several tier 1 banks and targeting Asia. If either or both achieve results, this should kick the company onward.I also like that the company is conservative in its narrative yet quietly confident.

[adamb1978] 28/12/2017 21:11

Thanks Bones, appreciate the response. Yes, cost control seems to be something which they're good at, whilst the ramping the dividend doesnt worry me too much as it doesnt make the company more valuable (though the introduction of one obviously is a positive sign....however the counter to that is that if you cant pay a divi when you have a third of the market cap in cash then when can you?!?).

The first para you quote is interesting - would just be helpful to be able to quantify that. As per above, they're historically a single digit % growth p.a. company so a 16x PE or say 10x-11x excl cash doesnt feel wrong as a micro-cap....however if they could break-out into being a 10%-20% p.a. turnover growth company then you'd get the double whammy of increasing earnings and multiple expansion. However unfortunately I can't tell whether that will or will not be the case at the moment. Think I'll hold on to wait to see what the interims show up and take the chance that the share price hasnt move on.

Cheers
Adam

[bones] 28/12/2017 19:54

Adam, in the final results, Richard Last said:"The level of new sales has not yet benefitted from the new business expected from our new desktop software solution launched earlier in the year. Expected desktop solution sales in 2018 and the full year effect of the net new sales achieved in the year ended 30 June 2017 is expected to lead to an increase in turnover for the year ending 30 June 2018."and...."We have continued to operate tight cost control throughout the year, whilst maintaining investment in product development and enhancement, which we expect to sustain going forward. The sales resource was increased during the year, which, together with marketing, are areas where we expect to see additional investment in 2018"From these comments, I expect a positive outlook and result for 2017 given this emphasis on new sources to generate sales on top of their existing customers.Hopefully there will be an uplift in dividends too.

[adamb1978] 28/12/2017 18:39

Hello

I've seen these regularly mentioned on this site though only just got around to looking at them. Numerous attractions - build-up of cash pile, downside protectoin through that cash, low PE once adj for cash, new divi policy etc. A couple questions though:

- I saw that in last years' interims they mentioned a figure for the 'annualised run-rate of recurring revenues at Dec-16', which was a useful data point. That data point was absent in the FY results which, to my suspicious mind, speaks volumes. Is there any reason not to think that it was missing because it wouldnt have looked good? I'm also wary that hte outlook statement in the results was heavily caveated

- What the long-term growth for this co and product? Presumably with a small number of customers then winning just one more provides a step change in the top-line but aside from that its just whatever pricing increases they can negotiate with customers. Last 3 years' turnover growth has been 7%, 1% and 8% so not exactly blowing the doors off.

Any insights greatly appreciated.
Thanks

Adam

[ashehzi] 28/12/2017 15:11

Shares in issue 12.80m
Daily Avg vol arnd 8-10K

Any reason ?

Today vol is 130%. so price moved up.

[gsbmba99] 28/12/2017 10:58

I've been tracking all the trades since 12 Oct. If I've correctly ascertained buys/sells (not difficult unless lots of volume), the MMs are sitting on nearly 40k shares (net sell imbalance since 12 Oct). I would guess that they are trying to push the price up on small purchases so they can sell the rest of their inventory at a higher profit.

[multibagger] 28/12/2017 10:29

Hi Ashehzi !

Welcome on board :)

Liquidity has always been an issue - it tends to move up quite quickly on any decent buying volumes. So if you want to add in scale you will have to be patient. Quite a few holders are over the 3% threshold, so shares are pretty hard to come by.

If you feel able to share,what would be your ideal/target share holding in ARC ?

Good luck with your investment in ARC - you join a number of LTHs who have backed a solid and good company.

[redartbmud] 28/12/2017 10:25

I doubt that we can move the share price, with a very modest circulation on one board, but widening the publicity is good.

[ashehzi] 28/12/2017 09:51

giving 1K @62 and 2K @63p. Rubbish. I want to add here.

Can't buy from IG as exchange checks failing.

Thanks to everyone, especially janeann, who mentioned it on VLG. I did study it for last few days and now wanting to add.

[janeann] 27/12/2017 09:48

morning multib

yes a few trades so interesting times. Looks as though apad may have doubled his holding - a 595 trade this morning!!

[multibagger] 27/12/2017 07:50

Good morning all :)

With ARC coming up in discussions on the VLG thread, I would expect to see some trades going through over the next few days...may be even 2-3 trades will be nice for a start...

Good luck all !

[gsbmba99] 23/12/2017 11:54

If you are looking to do further research on ARC and their competitors, a handful of companies were mentioned at the AGM. MDX Technology ( ), Tick42 ( and ), Solace ( ) and Vela ( ). It would appear, MDX and Tick42 (both UK private companies who file abbreviated returns at Companies House ie balance sheet only) are probably the closest competitors. MDX previously known as Gissing and Tick42 previously known as Dealing Object Technology. ARC's former CEO, Andrew Miller, was (but may not still be since he's not on the website anymore) business development director at Tick42. The overlap with Solace and Vela appears more limited as they both seem to venture into trading whereas ARC does not.

[gsbmba99] 15/12/2017 08:52

Happened to run across this white paper commissioned by OpenMAMA. You can use fake credentials to "register". It's about a year old. Unsurprisingly, since it's commissioned research, it extolls the virtues of OpenMAMA. I thought the most interesting bit was on page 6. "The efficiencies that can be achieved vary from firm to firm, but connecting to feeds via OpenMAMA, for example, lowers cost and can reduce the bandwidth needed – the latter by 80% in one instance. To give a ballpark figure, the annual cost for a server for market data distribution including networking, cooling, power and maintenance contracts could be close to $10,000. Multiplied by thousands of servers around the world, a firm could be looking at an annual total cost of ownership of many millions of dollars per year to run – and server costs are only a small piece of the overall puzzle. One bank is expecting to cut costs to 10% of their current level using OpenMAMA." There's no mention of ARC though I think the paper pre-dates ARC's involvement.

[xajorkith] 01/12/2017 14:13

Figures used are historic.

Stockopedia has them on a 12m forecast rolling PE of only 12.1, with compound eps growth of 20-25% through to 2019.

Ex-cash the PE is around 8.

[taffy100] 01/12/2017 12:52

Should You Be Tempted To Buy Arcontech Group Plc (AIM:ARC) At Its Current PE Ratio?
Kristin Rankin December 1, 2017