Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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42trader, I've been pretty despondent about this share, so your post cheered me up. The large cash balance vs the market cap was a key reason why I added to my holding. Yes, sales have been mostly recovered, but profit is still significantly down from last year. Was hoping to hear of major contract wins to replace the 2 large ones - covid has long passed us after all - but I guess more patience is required and they would probably RNS those separately anyway. Take your point about the divi rise - that does express a certain confidence - and a yield slightly above 4% on the current share price will at least ease the cost of having to wait longer.
Actually it was pretty good considering the loss of those two large contracts. Much of the sales lost from them has been recovered and it is upbeat for the future despite a cautious outlook. The increase of 18% for the dividend is a good sign they see a strong recovery in time.
It has broken out of the downward channel and I can see a recovery in the sp to about 112p, where there is strong resistance and it would fill a gap created back on 29th of november last year. I see very little downside to the sp due to how cheap the stock is, which could very well make it a target for a takeover.
Market cap of just £10.5m is very low for a company that is profit making and has cash of over £6m. So really for another company to buy out ARC they would only be paying £4m.
Today's interim report gives us nothing tangible and tells us it'll be a long and slow recovery here.
I've added this morning. Nothing is for certain, nothing without risk, but this is simply too cheap given the net cash position and the well covered yield. Provided the next trading update is not another disappointment, this will do well from here in my view.
Drifting down - now at a 4 year low.
With a market cap of < £10m, the company is probably too small to attract institutional interest and I can't see me getting my money back any time soon.
Not sure when to buy back in here , The chairman's statement was a bit downbeat
Fortunately , I decided to sell a few days ago ( thinking there may be a Ukraine Linked sell off ) knowing I could lose out on an RNS lift - but the RNS was not that good - which surprised me
looks like some holders going in to risk off mode due to Russia - short term thinking I think
RNS Due soon
Stalled in the 90's until we get the next RNS - with any luck will be quite positive and may have some mention of cash pile usage
Lots of small quantities of shares - possibly people who are here to go a lot higher which is good , looks like the quick profit traders left just as we hit the early 80's
Looks like one buyer paid up to 89p with a total of three buys 9,900 pounds each
IC review:
Shares in Aim-traded financial software provider Arcontech (ARC:74p) have been massively de-rated since the company issued a profit warning in late November after one customer decided to scale back its market data spend and another decided not to renew its contract because it is switching to a solution in a legacy, bundled contract.
The two changes are unrelated, but in terms of revenue they account for £0.3m of Arcontech’s last reported annual revenue of £3m. House broker finnCap lowered its revenue estimates by 6 and 11 per cent to £2.8m and £2.9m, respectively, for the 12 months to 30 June 2022 and 2023.
Furthermore, the company’s incremental operating margin on new sales is around 60 per cent, so any contract wins or losses have an accentuated impact on profits. This explains why finnCap cut its current year pre-tax profit estimate by 17 per cent to £0.8m and now only expects a flat result in the 2022/23 financial year. On this basis, EPS to fall by from 7.9p in 2020/21 to 6p.
Arcontech’s strong defensive characteristics (recurring licence fees account for 93 per cent of annual revenue) had been a major bull point, so the loss of two customers has clearly undermined investor confidence. The timing is incredibly frustrating, too. That’s because the company’s small sales team has been strengthening the qualified pipeline of potential prospects, and the directors note “renewed client interest in new business projects”. Travel restrictions during the Covid-19 pandemic had made converting the robust pipeline of opportunities difficult in the near term, but as these restrictions are now being lifted then it should augur well for the company to make up the lost ground. This is still a realistic possibility in my view.
Furthermore, the de-rating has been so savage since I covered the half-year results (‘Bargain shares: On the hunt for value’, 6 September 2021), that Arcontech’s £5.4m (40.5p) net cash pile now equates to more than half its £9.8m market capitalisation. This means a business that is still making £0.8m operating profit and generating free cash of £0.6m a year is being valued on a cash-adjusted PE ratio of 5.5. FinnCap is pencilling in a current year annual payout of 3p a share, which gives a prospective dividend yield of 4.1 per cent. The free-cash-flow yield is more than 6 per cent.
The shares are now firmly in bargain basement territory and the company is a bid target as well given Arcontech’s £4.4m enterprise value equates to only 5.5 times operating profit estimates. Recovery buy.
great news thanks, was thinking about adding but now I know it's been tipped I'll wait for mms to walk it back down (if they do)
Updated today by IC’s ST and states now firmly in bargain basement territory.
Advises a “Recovery buy”
unhooked - no need to say don't get excited - just commenting :-)
Not massive but over 100% daily 3 month - quite a few small trades
Lol pretty much the same.
Hi 42, doing great thank you, still surfing the lse forums still loving it and thankfully beating the market (which is our main reason for being here), I tend to steer clear of the dog shares these days in the main but can't resist the occasional dog trade for a bit of fun
You ?
AP-Invest
What is the period where they are prohibited from investing when reports are due , is it 1 month for interims?
If so we should see more director deals in days ' if ' there are going to be any prior to release of interims
I could only get 5000 at just over 75 , and it went to 78 , so would not mind a drift back to get a few more at that price
Token her 12,000 pound investment may be.
If I were her close to the company figures and knowing the last news we put out hammered the SP
I would make a judgment about what the forthcoming figures are like and if the will benefit or hinder the SP
If the answer was hinder , I would make my token investment ' after ' the interims are released
I may be totally wrong but to me that seems logical
I agree, token purchase. If several directors were buying I would see it as a positive and follow the money. Sometimes individual purchases can be slightly misleading.
Financials due 21/02/21. I’m not a chartist, but it would be interesting if anyone who is good with them could see if volume and momentum picks up in the week or two leading to the results. May be an indicator of some positive news, also if we see more directors buys I’d take that as a positive sign.
Nice to have a tolerable thread of investors here - I hope it doesn’t get wiped out on a momentum play.
Hey threeput. Long time no see. How you doing?
You are welcome to regard it however you like - is it really such a big thing