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Tap into a prodigious cash generator

Simon Thompson runs his slide rule over an Aim-traded financial software provider
Tap into a prodigious cash generator
  • Trading in line with full-year earnings forecasts
  • 90 per cent of sales recurring
  • Net cash equates to a quarter of market capitalisation

You are unlikely to see a more impressive blue-chip client base than the one offered by Aim-traded financial software provider Arcontech (ARC:160p). The roll call of blue-chips includes Barclays, Citi, JPMorgan, Lloyds, Morgan Stanley, Santander and Bank of England. These financial organisations generate recurring licence fees that equate to 90 per cent of the company’s annual revenue, offering investors a stable income stream.

Arcontech makes its money by providing software products and bespoke solutions for the collection, processing, distribution and presentation of time-sensitive financial markets data. It is a software house as it doesn’t deliver any market data, but provides the means for clients who are in the main large banks to do so. The company is therefore independent of market data vendors (such as global giants Refinitiv or Bloomberg), but at the same time partners with them to ensure its software integrates with vendor data and systems as well as clients' own data and systems.

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