Quoted on AIM, Arcontech is a real-time software specialist providing products and bespoke systems for collection, processing, distribution and presentation of time-sensitive financial markets data. Full year figures for the year to end June showed turnover of £1.83m, up 25% on the previous year, with operating losses of £348k, down from £595k.The second half year showed a continued improvement in the level of operating loss, despite continued investment in the CityVision product portfolio and the increasingly global sales and support operation.
Investment banks and other trading organisations around the world are still trying to reduce costs and market data is a key target, often being the third largest expense after personnel and IT. Management of market data across many instruments and geographies is extremely complex, with high costs due to duplication, poor contract management and inflexible contract terms from suppliers. Better management can provide an investment operation with better cost control, faster time-to-market and competitive differentiation.
Many of the larger investment banks do not want to increase their dependence upon the major suppliers such as Thomson Reuters and Bloomberg. They also want to generate more business and deeper client relationships through the greater use of internally-generated data, particularly where they have a significant market share.
Arcontech offers these companies a structured means of achieving these goals. The product portfolio is centred on the CityVision market data platform, providing a broad range of functionality, including the ability to handle feeds from multiple data vendors and to manage internally generated applications and data caching.
Over the past 2 years, the results of Arcontech have shown consistent improvement. The contracted annual recurring licence fees have increased to £1.88m, up 18% on the previous year and currently representing 84% of annual costs, thus providing a good platform for revenue growth and profit improvement. The rate of progress of revenue and profit could be slowed by the lengthening sales cycle and the costs of global sales and support, but the underlying trend is certainly positive.