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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

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

taylormade - 08 Jul 2005 08:12 - 1086 of 2787

Lets start the day with a prayer for those caught up in yesterdays cowardly attacks.

stockdog - 08 Jul 2005 10:40 - 1087 of 2787

Amen to that.

sd

stockdog - 08 Jul 2005 10:58 - 1088 of 2787

Looks like GHW are continuing to sell their remaining holding into strength today.

ptholden - 08 Jul 2005 11:04 - 1089 of 2787

Who knows sd, who knows? I do think they have some stock left and will probably dispose of it at some stage. After the recent rises, we need to pause for breath, otherwise we will end up with a huge spike and a huge fall and scare any new potential investors away, so quite happy to have a few quiet days.

arf, arf!!

pth

stockdog - 08 Jul 2005 11:24 - 1090 of 2787

Yeah - slow and steady with plenty of new buyers coming in to support the old stalwarts as we go is always better. We'll still get to the same place in the end, but with more chance, as you say, of staying there.

ptholden - 08 Jul 2005 13:28 - 1091 of 2787

Incagold, one of DGT's recent placements is having a storming day, up 34% at the time of posting.

pth

white westie - 08 Jul 2005 19:28 - 1092 of 2787

A post from Ponty on the BB you call the zoo.

I am not sure how much we would be involved in this if any or for what fee but i expect you brainy peeps on here can enlighten me, ptholden, stockdog or anyone any ideas?

ww

08 July 2005 is this more work

Dunn-Line Plc

Option Agreement



The Board of the Company announces that it has entered in to an option agreement
with a third party that allows the third party to acquire a significant portion
of its head office site at Basford, Nottingham.

The Company has received a sum of 200,000 in consideration for the option,
which gives the third party the right to acquire the portion of the site for a
further 1,440,000. The net book value of the portion of the site is 1,000,000.

The option may be exercised until 14 November 2005. If the option is exercised
the Company may remain on the site, as a tenant of the third party, at a market
rate until 1 June 2006.



End


This information is provided by RNS
The company news service from the London Stock Exchange



stockdog - 08 Jul 2005 19:43 - 1093 of 2787

Thanks WW - needs bigger brains than mine to answer - pth, og??

sd

ptholden - 08 Jul 2005 19:54 - 1094 of 2787

Have to be honest chaps and say I don't really know. However, I would hazard a guess at between 5-10k for the 200k sum and if the option is fully exercised, perahps a further 15k. Probably miles off the mark, but certainly additional revenue of some value to the balance sheet. It just goes to show the financial benefit of their client base, which will continue to add revenues to the overall figures without actually having to bring new companies to the AIM.

pth

stockdog - 09 Jul 2005 12:28 - 1095 of 2787

I think it may depend upon whether it is classed as a disposal of a significant part of the business (and not in the course of ordinary business - cf. TGM 20m disposal) in which case an EGM is required, in which case the NOMAD would almost certainly need to be consulted for orderly market purposes etc, etc.

1,640,000 is 79% of its market cap, only 18% of its tangible assets, although a massive 2050% of its net asset value. Its book value of 1m is correspondingly a lower proportion of each.

Since they are leasing the property back for a few years to come, the essential nature or trading results of their business is not being altered.

However, they felt compelled to issue an RNS, so maybe they had to consult DGT about that.

Are we any nearer an answer as to whether DGT earned anything from the deal? Anyway, if anything, it's something small as pth suggests.

sd

Saddam Bin Laden - 09 Jul 2005 14:15 - 1096 of 2787

The following is a link on current fundamental analysis of DGT. It's encouraging to hear that several posters have obtained similar level of figures.

Numbers Thread

One point that may be missed by many. DGT had around 600k of cash at the end of the financial year. I would guess this might be now up to 1 million in cash. If that is the case we could have at a price of 0.71p:

For H1, without cash if profit is 600k then current P/E ratio becomes only 7.32 if you take out 1 million of cash this drops the P/E ratio to a tiny 5.66

For full year a conservative target of 1 million profits then current P/E ratio is only 4.39 but if you take out 1 million cash again this drops the P/E ratio to an incredible 3.39. Scary or what!

stockdog - 09 Jul 2005 16:55 - 1097 of 2787

SBL - using figures from my own model, following your arguments above:-

At 1/1/05 they had 495k cash on the BS. Add to that 1,031k net profit (my latest estimate) before/after tax (assume new fixed asets purchased = approx. depreciation charge for year = cash neutral) you get 1,526k cash at 31/12/05.

At .73 mid SP with 619m shares in issue, less 1,526k cash, you get enterprise value of 2,992,700. This gives a 2005 enterprise PE of 2.90!!!!!! . . . or what, I should say.

I have previously speculated what they will do with their growing cash hillock (not quite a mountain yet!). My guess is it will lead to a purchase of a small but perfectly formed broking division, as per their declared aim to expand back into this area.

The only mildest of nerves I have is TR's reticence (how else could it be?) on any but the most confirmed of news. So news of prospective new deals/clients are all but completely absent until done. I have recently been watching the regular stream of IPO's announced by the LSE and have looked in vain for those involving DGT as NOMAD and/or Broker. The assumption that they can perform in H2 nearly as well as in H1 is a natural assumption, but far from proven in a market possibly about to revert to the bear strengths of a couple of years ago.

Roll on late August for H1 results to give the SP a lift to 1p+. Roll on much more so news of new transactions for H2 to take us to the next level.

BTW, I vote blue for Monday.

sd

carchase - 10 Jul 2005 13:51 - 1098 of 2787

Hopefully we can now move on.

DGT prior to the London Bombing was on the verge, of bigger moves. All the indicators, MACD, RSI, bollingers, stocastics, etc, were in DGT's favour. Thursday however turned events on their head. DGT ran out of buyers, and they only really came back in by the end of the day, once things were a little more stable. Once again DGT proved there are very few sellers out there. Some panicked from the word go, but never really materialised for the rest of the day. Friday was simply no one willing to take the lead. Neither buyers or sellers willing to show their cards. The good thing is, that all the gain of Wednesday has not been lost over the last two sessions. We are still holding on to them. This is where Monday really has to hold on to what we have. Its going to take some constant buying, or news to shift it on to above 0.75p, especially as we do not know how events in Birmingham will effect the markets as they open. There is no denying these events will effect proceedings. The TA does still support a rise, but without a positive Monday that will begin to level out. Its not an easy one to call right now. If I have to be precise I would say that if we can remain above 0.65p till the close of Wednesday it will show potential buyers this is not going down so easily. Time to assess the next step.

My only concern is that if the TA indicators begin to cool off by Wednesday, then any subsequent rise will be delayed as confidence needs to be built again. Most of us though are going nowhere anyway, and may use this rest as a time to buy more.

DGT managed to test the high of late June, and through no fault of its own this week, was stopped from pushing on. I am convinced that there is a 'snap' underlying move on the cards with DGT building up. This means that many who wanted to buy will be caught cold. Its has, for some time been boiling under the surface. The standard consensus is the next set of results will finally deliver. If so, these sub 1p prices could be taken out without warning. In those cases its worth watching the size, and timing of trades. The more constant the more the clues are there.

I am sorry that the post is not more precise to movement for the following days, but in a world of uncertainties, we do the best we can. Its like trying to walk through a minefield right now, with events out of our control. To hold anything above 0.65p in the first instance will be good. To push on any higher at this stage will be a bonus.

PS, I do read this BB but very rarely post. I think if anyone wanted to read opinions on DGT in peace this would be a good start. Its a credit to some of the posters on here, that this BB is worth reading.

stockdog - 10 Jul 2005 14:14 - 1099 of 2787

Hi Carchase
Have been reading your TA posts on iii - not understanding how you arrive at your opinions, since I am very limited in my own TA development, but happy to see you are broadly as positive as most of us are.
What's a good book (simple overview, please) to start learning more about MACD, RSI and Stocastics, IYO?
sd

ptholden - 10 Jul 2005 15:00 - 1100 of 2787

carchase

Nice to see you posting over here. Fully concur with your underlying 'snap' theory, I think the 'snap' may susprise a few, but then I have always thought that this stock will catch people out before the Interims.

sd

sorry to butt in on your question to carchase, but try Technical Analysis of the Financial Markets by John J Murphy.

Een has some of those triangular type thingies for you to digest, plus a host of other stuff with easily understood text and illustrations (well, it would have to be for me to understand it!)

pth

carchase - 10 Jul 2005 15:33 - 1101 of 2787

Ptholden cheers mate.

Stockdog as Pth has just said a good book would be John J Murphy's. It practically cover every area, and in simple plain terms. Another book would be Chart Analysis by Brian J Millard. The rest is really picked up with experience as you go along. Some very good websites out there, but none that I can recommend over any other.

Normally I want to keep posts on TA as simple as possible, simply because to go into depth will throw people.

stockdog - 10 Jul 2005 20:11 - 1102 of 2787

Thanks carchase and pth - a couple of bits of light reading for my forthcoming hols - wonder if I'll be allowed to take the laptop - wonder if they'll have broadband in deepest Cornwall? I live in hope for when the sand in the sandwiches gets too crunchy to bear!

Edit: Thought the name Brian Millard sounded familiar - in another life time I read his book on Traded Options which I used to dabble in.

sd

EWRobson - 11 Jul 2005 11:36 - 1103 of 2787

Sorry, folk! Just cashed in an odd 300K to pay for family holiday over at 'The Mill' (Sudbury) - round x0 celebrations! Have to run ASC, reinvesting margin in SEO to build that holding back up - badly shaken out by fall in last couple of weeks. Back in action by Thursday.

peter, one birthday rpesent from son is trip to st Andrews for Sunday - see you there?

Eric
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