Arrowpoint Technologies, the pensions and retirement benefits administration software specialist, has announced two contract renewals with a potential value of up to $14 million over five years.

The first contract is with the US Federal pensions body, the Pension Benefit Guaranty Corporation (PBGC). Under the deal Arrowpoint will provide actuarial and IT services related to the PBGC’s Pension Insurance Modelling Systems Project. The agreement is worth between $2.2 and $2.4 million annually and covers an initial one year option to extend the deal for another four years.

Arrowpoint’s second success is an 18-month extension to an existing contract with financial services firm Principal Financial Group, for pensions administration software and plan conversion services. During the term of the contract, up to $2 million in revenue will be generated.

Shares in Arrowpoint now trade at 16p, up from 15.5p on the first day of dealings last December, capitalising the company at £32.05 million. The contract renewals are undoubtedly good news but with the company having only posted modest operating profits thus far (EBITDA of £896,000 in the six months to 30th September 2009) we think that the shares look, at best, fairly valued.