AIM:ARC

Stock Analysis Report

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Executive Summary

Arcontech Group Plc, together with its subsidiaries, develops and sells proprietary software in the United Kingdom, rest of Europe, Africa, North America, Australia, and the Asia Pacific. More Details


Snowflake Analysis

Flawless balance sheet with solid track record.

Share Price & News

How has Arcontech Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARC is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: ARC's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

-2.9%

ARC

-3.5%

GB Software

-0.4%

GB Market


1 Year Return

1.8%

ARC

-12.5%

GB Software

-10.1%

GB Market

Return vs Industry: ARC exceeded the UK Software industry which returned -12.5% over the past year.

Return vs Market: ARC exceeded the UK Market which returned -10.1% over the past year.


Shareholder returns

ARCIndustryMarket
7 Day-2.9%-3.5%-0.4%
30 Day9.2%-4.2%13.4%
90 Day3.6%-13.4%6.4%
1 Year3.2%1.8%-7.3%-12.5%-6.5%-10.1%
3 Year237.4%225.8%-28.6%-37.2%1.5%-10.9%
5 Year638.6%602.6%16.3%-3.9%27.4%-1.6%

Long-Term Price Volatility Vs. Market

How volatile is Arcontech Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arcontech Group undervalued compared to its fair value and its price relative to the market?

21.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ARC (£2.02) is trading above our estimate of fair value (£1.49)

Significantly Below Fair Value: ARC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ARC is good value based on its PE Ratio (21.9x) compared to the GB Software industry average (38.1x).

PE vs Market: ARC is poor value based on its PE Ratio (21.9x) compared to the UK market (21.2x).


Price to Earnings Growth Ratio

PEG Ratio: ARC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ARC is overvalued based on its PB Ratio (4.7x) compared to the GB Software industry average (3.6x).


Next Steps

Future Growth

How is Arcontech Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-2.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARC's earnings are forecast to decline over the next 3 years (-2.9% per year).

Earnings vs Market: ARC's earnings are forecast to decline over the next 3 years (-2.9% per year).

High Growth Earnings: ARC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ARC's revenue (5.4% per year) is forecast to grow slower than the UK market (6.8% per year).

High Growth Revenue: ARC's revenue (5.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARC's Return on Equity is forecast to be low in 3 years time (16.7%).


Next Steps

Past Performance

How has Arcontech Group performed over the past 5 years?

27.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARC has high quality earnings.

Growing Profit Margin: ARC's current net profit margins (41.2%) are higher than last year (35%).


Past Earnings Growth Analysis

Earnings Trend: ARC's earnings have grown significantly by 27.9% per year over the past 5 years.

Accelerating Growth: ARC's earnings growth over the past year (22.5%) is below its 5-year average (27.9% per year).

Earnings vs Industry: ARC earnings growth over the past year (22.5%) exceeded the Software industry -3.2%.


Return on Equity

High ROE: ARC's Return on Equity (21.4%) is considered high.


Next Steps

Financial Health

How is Arcontech Group's financial position?


Financial Position Analysis

Short Term Liabilities: ARC's short term assets (£5.2M) exceed its short term liabilities (£2.0M).

Long Term Liabilities: ARC's short term assets (£5.2M) exceed its long term liabilities (£344.3K).


Debt to Equity History and Analysis

Debt Level: ARC is debt free.

Reducing Debt: ARC has not had any debt for past 5 years.

Debt Coverage: ARC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ARC has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Arcontech Group current dividend yield, its reliability and sustainability?

1.24%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARC's dividend (1.24%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.72%).

High Dividend: ARC's dividend (1.24%) is low compared to the top 25% of dividend payers in the UK market (4.94%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ARC has been paying a dividend for less than 10 years.

Growing Dividend: ARC's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (27.1%), ARC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARC's dividends in 3 years are forecast to be well covered by earnings (32.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.6yrs

Average board tenure


CEO

Matthew Jeffs (58 yo)

7.58yrs

Tenure

UK£287,913

Compensation

Mr. Matthew David Jeffs has been the Chief Executive Officer of Arcontech Group Plc since April 29, 2013. Mr. Jeffs spent ten years with Dow Jones and then six years with Reuters in a variety of roles. He ...


CEO Compensation Analysis

Compensation vs Market: Matthew's total compensation ($USD383.75K) is about average for companies of similar size in the UK market ($USD344.85K).

Compensation vs Earnings: Matthew's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Matthew Jeffs
CEO & Executive Director7.58yrsUK£287.91k6.85%
£ 1.8m
Geoffrey Wicks
Non-Executive Chairman0.17yrno datano data
Louise Barton
Independent Non-Executive Director13.75yrsUK£23.03k8.06%
£ 2.2m

7.6yrs

Average Tenure

70yo

Average Age

Experienced Board: ARC's board of directors are considered experienced (7.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arcontech Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arcontech Group plc
  • Ticker: ARC
  • Exchange: AIM
  • Founded: 1979
  • Industry: Application Software
  • Sector: Software
  • Market Cap: UK£26.847m
  • Shares outstanding: 13.29m
  • Website: https://www.arcontech.com

Number of Employees


Location

  • Arcontech Group plc
  • 11-21 Paul Street
  • 1st Floor
  • London
  • Greater London
  • EC2A 4JU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARCAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPDec 2000

Biography

Arcontech Group Plc, together with its subsidiaries, develops and sells proprietary software in the United Kingdom, rest of Europe, Africa, North America, Australia, and the Asia Pacific. Its products incl...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/28 18:52
End of Day Share Price2020/11/27 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.