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Dowgate Capital - Capitalising on the booming AIM market (DGT)     

overgrowth - 09 Feb 2005 20:52

Dowgate Capital (DGT) are sitting in the middle of a goldmine!

This company through their sole trading arm City Financial Associates are looking to take full advantage of the "booming" AIM market this year. Dowgate provide NOMAD (NOMinated ADvisor) services to AIM companies and also have full Corporate Broker status which means that they can fund placements on behalf of the companies they represent.

On first sight, the fact that Dowgate exist in the often veiled financial services sector makes you think twice about investing in company such as this because it would be impossible to understand what they were doing - however, think again!

DGT bring new companies to the AIM (Alternative Investment Market). For each new company "floated" on AIM, they take arrangement fees when acting as NOMAD. After the company is launched then for a nice steady earner DGT get another healthy chunk of cash every year for looking after them (note that all AIM companies must have a nominated adviser - thereby securing a ready source of recurring income).

Because DGT also act as a Corporate broker they can get a very healthy percentage for arranging placement of shares with insititutions before a new company floats. In addition, because placements come outside the sphere of yearly NOMAD work, they can also gain healthy percentages of placements which companies may need to make throughout the year when they need a quick injection of cash to speed growth.

Current NOMADships: 28 companies represented (gives recurring income of approx 480,000 per year)

Current on-going Brokerage agreements: 19 companies (income depends on placements)

For flotations, depending on the size of a company, fees charged will be anything from 50,000 to 100,000+ For placements (the real earner), DGT get anything from 3% to around 12% of the TOTAL AMOUNT RAISED - For example a new company raising 3M though a placement will earn DGT anything from 90,000 to 360,000 ! These figures are indicative as actual deals all differ due to circumstances and DGT sometimes take payment in shares - they still have a tasty chunk of Setstone shares and when this Russian exploration company comes back to AIM, predictions are that the share price will rocket. Note that the amount that this little company can earn in fees is huge and every new deal that comes through we know will contribute another healthy chunk into the bottom line. The good news with every new floatation means that it's another chunk of recurring revenue which could go on for years, with DGT having to do very little. New clients gained in 2005 are:

Mediazest (NOMAD & broker) Elite Strategies (NOMAD) Process Handling (NOMAD) Poland Investment Fund (NOMAD) Nanotech Energy (NOMAD & broker) Archimedia Ventures (NOMAD & broker) Red Leopard Holdings (NOMAD) Alba Mineral Resources (NOMAD & broker) Intandem Films (NOMAD & broker) Motive Television (NOMAD) IncaGold (NOMAD) Sportswinbet (NOMAD & Broker) Infoscreen Networks (NOMAD & Broker) Mark Kingsley (NOMAD & Broker) Croatia Ventures (NOMAD & Broker) Pantheon Leisure (NOMAD) Firenze Ventures (Ofex Advisor) FlightStore Group (NOMAD & Broker) Euro Capital Projects (NOMAD) Pearl Street Holdings (NOMAD) Worldwide Natural Resources (Ofex Advisor) Dovedale Ventures (Ofex Advisor) Other 2005 work completed:Neptune-Calculus VCT offer for subs of up to 12 million Advisory work for TGM on London Bus disposal for 20.4M Advisory work for Creightons on property disposal Advisory work for Hampton Trust on company restructuring Advisory work for Interbulk Investments on acquisition of Inbulk Advisory work for Fundamental-e Investments on two disposals Advisory work for Designer Vision re: Design Rights against Centurion Electronics

Click Here for fundamentals and profit projections.
Chart.aspx?Provider=Intra&Code=DGT&Size=Chart.aspx?Provider=EODIntra&Code=DGT&Si

stockdog - 07 Jul 2005 00:48 - 1066 of 2787

If my 1m full year profit (pre and post tax) is near the mark (since adding in TGM disposal fees) then the SP 12 month view is now exactly 2p, but could get there within the next 6 months if H1 progress is anywhere near sustained in H2.

What's a good buy limit now do you reckon?

sd

markusantonius - 07 Jul 2005 01:05 - 1067 of 2787

OG, to save me wading backwards through millions of threads - when are the Interims due to be announced, is there a specific date yet?

SD, from the brief stuff I know about the new company regime, etc. (+ what Eric and PTH have taught me!), I would say (IMVHO): anything up to say 0.85p which allows for 2 lots of spreads & broker's fees and assumes at least a penny+ is reached before the Interims? I sold this (CFP) at 1.16p last year when it was really worth **** all, at the time!

Agree that the MM's probably do not have enough stock in their cupboards for any kind of rally but there has to be a ceiling on what the share is actually worth? Any kind of quantum leap rise will only be sustainable once its market cap exceeds a certain amount as it is simply too small for institutions to buy in. Not in the near future anyway.

ptholden - 07 Jul 2005 08:49 - 1068 of 2787

markus

H1 Interims probably the latter half of August, exact date not yet known.

sd

Suppose it depends on what sort of profit you are looking for. Personally, I think you could buy up to a penny and still see a return of 30-40% once the results are out. It's well worth having a historical look at the SP and see how it has performed over past years to try and understand the possibilities of further significant rises. Not only DGT but other small caps, they each follow a similiar pattern.

pth

ptholden - 07 Jul 2005 10:05 - 1069 of 2787

Following the 500k buy this morning, any further big buys should reveal to some degree if the MMs are sitting on any more stock or if they really are short.

pth

corehard - 07 Jul 2005 10:53 - 1070 of 2787

Very bad news in London : Possible Terrorist attacks.

taylormade - 07 Jul 2005 10:56 - 1071 of 2787

the footsie is going to drop like a sack of shit now.

corehard - 07 Jul 2005 10:58 - 1072 of 2787

Already Happening !

ptholden - 07 Jul 2005 13:36 - 1073 of 2787

Obviously today's events are going to overshadow the markets. However, it would appear that the MMs are using the news to instigate a shake, unless of course there is a large sell in the system. Buys outnumber sells 2-1, so on the face of it absolutely no reason for a 8% mark down. As always we will discover the truth later today.

pth

overgrowth - 07 Jul 2005 13:40 - 1074 of 2787

pth - it could be that GHW are still selling shares below the notifiable 3% level.

ptholden - 07 Jul 2005 13:43 - 1075 of 2787

og

That thought had crossed my mind. If they are going to ofload another 17M shares it will take a while for those to be hoovered up and likely slow down progress.

pth

overgrowth - 07 Jul 2005 13:49 - 1076 of 2787

might be a good thing - I reckon there's been a few P&D merchants calling in at "the zoo" recently, expecting a hot air spike like last year.

A steady climb to just under 1p before interims will do nicely...

stockdog - 07 Jul 2005 13:51 - 1077 of 2787

Did I read recently that notifiable interest has been raised to 5%, instead of the old 3% - that covers a good deal of stock we can't track.

MMs have lowered the offer - maybe need to get rid of some stock they've accumulated before the weekend. They'll all want nice squared away positions in light of today's events in London IMHO.

markusantonius - 07 Jul 2005 13:56 - 1078 of 2787

GHW will sell as close as they can without jeopordising the system. Some of you may recall my posts in April/May? The GHW factor has always been my #1 concern regarding this company. The sooner they "get out" the better for everyone else who play by the rules.....

ptholden - 07 Jul 2005 14:01 - 1079 of 2787

L2 would not indicate that they are flush with stock 2v1 with KBC on the Offer, supports the 'treeshake' theory, but only an unedecuated guess some might say.

pth

cowpull - 07 Jul 2005 14:37 - 1080 of 2787

Is that you DEAD FRED, reovergrowth .

overgrowth - 07 Jul 2005 14:53 - 1081 of 2787

eh ?

ptholden - 07 Jul 2005 15:04 - 1082 of 2787

Fairly sure that there will certainly be some late reported sells, although if this is a treeshake it certainly isn't working. A steady flow of peeps taking the opportunity to top up or dip a toe in. The fundamnetals haven't changed, just the disposition of the stock.

pth

stockdog - 07 Jul 2005 16:17 - 1083 of 2787

I've just been through Saddam Bin Laden's (unfortunately named poster today of all days!) link at the bottom of the green header - not sure who he is or from which BB.

His projections arrive at as close a match to mine as any two sets probably could, using largely identical assumptions, although attaching different valuations to them here and there.

For example, my model takes account of the contractual situation whereby retainer fees are payable (thus bookable) quarterly in advance - SBL treats them as booked annually in advance. The two most significant differences cancel each other out - I've got TGM disposal fees in at 225k v. his 100k, but I also have overheads at 600k (H1) v. his 500k).

He also uses PE of 12 as a guide for SP prospective valuation. Interesting to note that Colin Stewart whom he cites have a fully taxed PE of 15. His projection of 1.5p soon and 2p by year end are broadly similar to my 1p with/by interims [1.5p by Xmas] and 2p within 12 months, mine being conservatively a liitle slower to achieve.

I always take comfort from such similar results arrived at quite independently - also ptholden says his are very similar. So there we have it - definite 5 bagger in site within 12 months (for those like me who have bought in at .41p average - whoops nearly forgot I tucked a few more away today at 0.74p - not quite the best price, but happy enough - makes my average buy price just shy of 0.45p)

Hold tight - today's blip will resolve, I'm quite sure - SP already back up to 67/75 as I write.

Kind thoughts for all those caught up in today's troubles in London.

sd

ptholden - 07 Jul 2005 16:23 - 1084 of 2787

sd

SBL generally posts on ADVFN and has been following DGT for a considerable period of time. We are all singing off the same hymn sheet with regard to the Interims, which as you say is reassuring. Not concerned about today's SP movements, but will feel happier when and if GHW dump their remaining shares, if indeed, they have any left to dump.

pth

ptholden - 07 Jul 2005 17:22 - 1085 of 2787

There would not appear to be any delayed T sells in the system, so the only other explanation for today's fall in the SP, bearing in mind that there have been significantly more buys than sells, is that the MMs have used today's events as an excuse for a tree shake. For significant periods L2 was 2v1, not a situation indicating that the MMs were particularly blessed with any sizeable quantities of stock. Perhpas GHW have finished for the time being or have finished, period.

pth
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