Arcontech (ARC) AI Stock Analysis

• Market Cap: £10.30M
• Dividend Yield: 4.73%
• Average Volume (3M): 26.00K
• Price to Earnings (P/E): 7.2
• Beta (1Y): 0.06
• Revenue Growth: 6.76%
• EPS Growth: -11.53%
• Country: UK
• Employees: 17
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.03
• Shares Outstanding: 13,372,811
• 10 Day Avg. Volume: 14,417
• 30 Day Avg. Volume: 25,997
• PEG Ratio: -1.08
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 3.81
• P/FCF Ratio: 19.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.07
• Revenue Forecast (FY): £3.20M

• Rating: 70 Outperform
• Price Target: 85.00 p ▲(0.59% Upside)
• Action: Upgraded Date: 12/07/25
• Date: Action: Upgraded 12/07/25

Arcontech's overall stock score is driven by its strong financial performance and attractive valuation, supported by positive corporate events. However, bearish technical indicators and cash flow challenges present risks. The company's strategic focus on core markets and dividend increase are positive signs for future growth.

Positive Factors

Low leverage

A debt-to-equity ratio of 0.049 indicates minimal leverage, giving Arcontech durable financial flexibility. Low debt reduces interest burden and default risk, supports steady investment in product development and client support, and sustains dividend capacity during downturns.

Very high gross margins

A consistent 100% gross margin reflects a highly scalable software business with negligible cost of goods sold. Such structural margin strength provides room to absorb higher sales and support costs while preserving operating profitability, enabling reinvestment in R&D and sales over the medium term.

Strategic customer win & dividend lift

Securing a high-end customer and reporting turnover growth plus a raised final dividend signal durable commercial traction and management confidence. The customer win can strengthen recurring licence/support revenue, while the dividend increase implies sustainable cash profitability if cash conversion stabilizes.

Negative Factors

Sharp free cash flow drop

A 65.84% decline in free cash flow materially weakens liquidity and the company's ability to self-fund growth initiatives, product investment, or cushion cyclical revenue dips. Persistent weak FCF could force trade-offs between dividends, R&D, or require external financing, increasing long-term execution risk.

Eroding net margins

A drop in net and operating margins suggests rising operating costs or pricing pressure that reduces durable profitability. Margin erosion undermines cash generation and limits funds available for reinvestment or shareholder returns, making long-term growth and competitiveness harder without efficiency gains.

Modest revenue growth & EPS decline

Modest top-line growth paired with a ~21.7% EPS contraction points to limited scalable demand or margin volatility. For a small, niche software provider, slow revenue expansion constrains operating leverage and makes it harder to absorb fixed costs, hampering sustainable earnings growth over the medium term.

Arcontech Business Overview & Revenue Model

Company Description

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 include CityVision, a market data platform for real-time data reception, transformation, and publishing; CityVision Multi Vendor Contribution System, which enables the user to contribute data automatically and simultaneously to various destinations; and CityVision Cache, a real-time data repository. The company also offers Excelerator, a vendor independent system that enables real time reception and publishing of market data, as well as provides flexibility and control to manipulate data from various sources through Excel's mathematical and display features. In addition, it provides CityVision Relay, a real-time data distribution engine; CityVision Symbol Mapper, a real-time data conversion system that allows market data managers to separate data integration from the data source; and CityVision API that develops real-time market data applications, as well as offers computer consultancy services. The company was formerly known as Knowledge Technology Solutions PLC and changed its name to Arcontech Group plc in February 2009. Arcontech Group plc was founded in 1979 and is based in London, the United Kingdom.

How the Company Makes Money

Arcontech generates revenue primarily by selling and licensing its financial markets software products and providing associated support and services. Key revenue streams typically include (1) software licence fees (often structured as recurring subscriptions or term licences, depending on contract), (2) maintenance and support fees for ongoing updates and customer support, and (3) professional services such as implementation, integration, customization, and consulting tied to customer deployments. Its earnings are influenced by customer adoption within financial institutions, renewal rates for support/licensing, and the scale and complexity of implementation projects. Specific pricing terms, customer concentration, and named strategic partnerships: null.

Arcontech Financial Statement Overview

Summary

Arcontech demonstrates strong profitability and a stable balance sheet with low leverage. However, declining net profit margins and cash flow challenges could pose risks. The company should focus on improving operational efficiency and cash flow management to sustain growth.

Income Statement

Arcontech shows a strong gross profit margin consistently at 100%, indicating effective cost management. However, the net profit margin has decreased from 36.69% in 2024 to 30.36% in 2025, suggesting a decline in profitability. Revenue growth is modest at 4.52% in 2025, following a slight increase in 2024. EBIT and EBITDA margins have also decreased, reflecting potential challenges in operational efficiency.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.049, indicating minimal leverage and financial stability. Return on equity has decreased slightly to 10.80% in 2025, which is still a healthy level, but shows a downward trend. The equity ratio remains strong, suggesting a solid capital structure.

Cash Flow

Free cash flow has significantly decreased by 65.84% in 2025, indicating potential liquidity issues. The operating cash flow to net income ratio has also declined, suggesting reduced cash generation efficiency. However, the free cash flow to net income ratio remains high at 98.50%, indicating that most of the net income is being converted into free cash flow.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	3.04M	3.11M	2.91M	2.73M	2.76M	2.99M
Gross Profit	2.98M	3.11M	2.91M	2.58M	2.76M	2.99M
EBITDA	852.05K	785.10K	1.25M	1.14M	925.78K	1.21M
Net Income	819.89K	943.43K	1.07M	980.11K	610.57K	1.05M
Balance Sheet
Total Assets	10.77M	10.82M	10.56M	9.03M	8.78M	8.57M
Cash, Cash Equivalents and Short-Term Investments	7.77M	7.40M	7.16M	6.41M	6.03M	5.40M
Total Debt	368.75K	427.36K	537.67K	40.32K	195.85K	344.30K
Total Liabilities	2.17M	2.09M	2.30M	1.42M	1.80M	1.99M
Stockholders Equity	8.60M	8.73M	8.27M	7.61M	6.97M	6.58M
Cash Flow
Free Cash Flow	1.14M	597.31K	1.02M	974.92K	1.12M	813.13K
Operating Cash Flow	1.15M	606.41K	1.04M	978.40K	1.12M	814.62K
Investing Cash Flow	-4.19K	240.71K	236.26K	73.50K	11.22K	11.78K
Financing Cash Flow	-649.80K	-611.79K	-522.92K	-590.14K	-487.18K	-424.64K

Arcontech Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 84.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ARC, the sentiment is Negative. The current price of 84.5 is above the 20-day moving average (MA) of 81.22, above the 50-day MA of 82.29, and below the 200-day MA of 87.54, indicating a bearish trend. The MACD of -1.45 indicates Positive momentum. The RSI at 30.74 is Neutral, neither overbought nor oversold. The STOCH value of 21.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:ARC.

Arcontech Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ING	77 Outperform	£14.66M	2.03	28.74%	5.18%	―	―
ARC	70 Outperform	£10.30M	7.16	9.46%	4.73%	6.76%	-11.53%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ZOO	50 Neutral	£13.27M	-2.98	-32.23%	―	-7.72%	54.13%
BIRD	48 Neutral	£9.85M	-2.95	-34.87%	―	-9.19%	4.69%
PEN	47 Neutral	£10.46M	-1.39	-60.27%	―	-31.21%	-292.31%
ESYS	47 Neutral	£10.69M	-1.11	―	―	-5.21%	76.14%

Arcontech Corporate Events

Arcontech CFO Increases Stake with Purchase of Ordinary Shares

Arcontech Group plc has reported an on-market share purchase by its Chief Financial Officer, Ben Hodges, who acquired 6,472 ordinary shares at 77.25 pence each on 6 February 2026. Following the transaction, Hodges’ beneficial holding in the company has risen to 19,495 shares, representing about 0.15% of Arcontech’s issued share capital, a move that marginally increases board-level equity alignment with shareholders and may be read by investors as a signal of confidence in the company’s prospects.

The most recent analyst rating on (GB:ARC) stock is a Hold with a £87.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.

Arcontech CEO Increases Stake with Purchase of Additional Shares

Arcontech has disclosed that its Chief Executive Officer, Matthew Jeffs, has purchased 20,000 ordinary shares in the company at 76.46 pence per share. Following this transaction, Jeffs’ beneficial holding rises to 1,033,000 shares, representing 7.72% of Arcontech’s issued share capital, a move likely to be interpreted by investors as a vote of confidence in the firm’s prospects and alignment of management interests with shareholders.

The most recent analyst rating on (GB:ARC) stock is a Hold with a £89.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.

Arcontech Profits Fall on Lower Revenues but Strong Cash Pile Underpins Growth Plans

Arcontech reported a softer first half for the six months to 31 December 2025, with revenue down 4.7% to £1.44m as the loss of a long-standing client, some customer downsizing and a sharp 69% drop in one-off revenues outweighed its largely sticky, multi-year contract base; recurring revenues now account for 99% of total sales. Profit before tax fell 23.8% to £0.39m and adjusted EBITDA declined 23.6%, reflecting lower revenue and continued investment in staff, but the balance sheet remains strong with net cash up 8.4% to £7.8m, no interim dividend is proposed, and the board is using its cash position to fund product development and explore new business areas, while signalling confidence that a strong pipeline, new client wins and growth at existing customers will help restore recurring revenue momentum and return the group to growth in the next financial year.

The most recent analyst rating on (GB:ARC) stock is a Hold with a £89.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.