Final Results Due In March 2005.

http://www.cityfin.co.uk
Trades over 450,000 shares are delayed in reporting by 1 Hour.

One of City Financial Associates (CFP's) main operating goals is to bring fledgling companies to the market. With the depressed stock market over the last few years many potential clients have deffered entry to the LSE. Markets have now turned and the reality of a sucession of new floatations is growing. CFP are well positioned to enjoy the rewards that will be benefited to them in this growing market place.

Why the EXCITEMENT - will here are the reasons why I think we're on a winner.

1) My motto is when it's comes to investing there are three things. Management, management and management. With any good investment - the management should be the driving force in a company. Can they cut the mustard, are they dynamic, do they have good contacts? I think so if you read the following profile.

Stephen Barclay, Executive Chairman

Stephen Barclay, aged 61, qualified as a Chartered Accountant in 1964 with Robson Rhodes before obtaining an MBA degree from Wharton Business School in 1967. In 1989, after a career during which he reorganised various companies, he established City Financial Associates Plc (formerly Clifton Financial Associates Plc) to provide corporate finance advice to small to medium sized private and public companies. In August 1998, City Financial Associates Plc was purchased by Talisman House Plc (now Seymour Pierce Group Plc) where he became group executive chairman. In December 1998, Talisman House Plc purchased an institutional stockbroker, Seymour Pierce Limited, where he became executive chairman. He resigned as a director of Seymour Pierce Group Plc and various other group companies at the end of March 2001 to found CFA Capital Group Plc. He is a director of a number of public companies including MICE Group Plc and Talisman First Venture Capital Trust Plc and is a governor of the London School of Economics and Political Science.

John Shaw, Executive Director

John Shaw, aged 54, qualified as a Chartered Accountant in 1975 with Touche Ross & Co in London. Subsequently he spent two years seconded to the Quotations Department of the London Stock Exchange returning to Touche Ross & Co to join the Corporate Finance Group until 1982. After a period as a sole practitioner, he joined Chase Investment Bank Limited in 1985, was appointed a director and founded the Equity Investment Group, formed to invest in unquoted companies. In 1990 he joined Henry Ansbacher & Co Limited as an Assistant Director of Corporate Finance. He started working with City Financial Associates Plc in early 1995 and was appointed a director in December 1996. He was appointed a director of Seymour Pierce Limited in December 1998 where he was initially Head of Corporate Finance and latterly Head of Private Equity. He resigned from Seymour Pierce Limited and various other group companies at the end of March 2001 to found CFA Capital Group Plc.

2) They have turned a 2 million loss into nearly a profit if you ignore costs for discontinuing operations - that some turn around.

3) With only small market capital of 3.83M it's feasible to suggest they could make a good profit this year as they have already got off to a good start signing more clients.

A profit of half million would give a pe ratio of 7.66

1 million a pe ratio of 3.83

1.5 million a pe ratio of 2.55

2 million a pe ratio of 1.91.

So it would only take a small profit to make this company super undervalued. Consider the possibility they could achieve a 2 million profit this year, which is the least, I expect, we could be looking at a share price of 7p. YES THAT'S 7P (An average p/e for the sector is 16.) Even with a profit of only 1 million that's still an upside of 3.5p.

3) Consider the fact that some of their clients pay their fee by way of giving large share holdings to CFP. All it would take is two or three creamy companies to give them valuable portfolio holding which they could cash in at a substantial return.

4) The IPO is sector has already increased three fold this year. More and more companies are coming into AIM and from abroad then ever before. Rules have changed where foreign companies can use a fast track scheme to get on board more quickly then ever before. I'm sure CFA Associates are well positioned to benefit with this increase in volume.

5) We could see a re-rating this year in this sector, which would be the cherry on the top.

I rest my case, to me this is a no brainer unless you want to wait for the next results for proof they have achieved profitability. If that's your cautious approach, fine but by then, you can then expect a much higher share price then now.

Major Shareholdings:
Stephen John Barclay 64,600,000 11.66%
Pershing Keen Noms Ltd 49,610,000 8.95%
John Richard Shaw 29,400,000 5.31%

RNS Number:9414C
CFA Capital Group PLC
15 September 2004

CFA Capital Group plc
Interim results for the 6 months ended 30 June 2004
CHAIRMAN'S STATEMENT

Highlights

* Nominated Adviser to 20 AIM companies - broker to 15 AIM companies

* Currently handling a number of AIM flotations and other major transactions

* Strong second-half order book - solid outlook for year

* Turnover for the period up 95% to #510,000 (6 months to 30 June 2003:
#262,000 from continuing operations)

* Losses before taxation of #58,000, (loss 6 months to 30 June 2003:
#208,000 from continuing operations)

* Currently recruiting to further strengthen team

Introduction
I am pleased to announce that CFA is now retained as Nominated Adviser to 20 AIM
companies and broker to 16 AIM companies. The company is currently working on a
number of AIM flotations and other major transactions, and as such has built a
strong order book for the second half of 2004. The fees generated by this
activity, taken together with our underlying retainer income and largely-fixed
overhead base, leaves us well-positioned for a satisfactory outcome to the year
as a whole.

Sharply reduced losses for the first half were achieved even though we had to
incur costs on two flotations that were not completed until July 2004 which
generated revenues of #225,000. These revenues were not recognised in the
results to 30 June 2004.

Turnover for the period nonetheless increased 95% to #510,000 (6 months to 30
June 2003: #262,000 from continuing operations), with losses before taxation of
#58,000 showing a marked improvement from #208,000 (6 months to June 2003 -
continuing operations).

Following the sale of CFA Securities Limited in 2003, CFA is now firmly focused
on servicing the needs of clients who are essentially AIM listed companies run
by entrepreneurs. We now have a team of eight, comprising executives and support
staff, providing corporate finance and broking advice. We are in the process of
recruiting further executives to join the team. This recruitment will ensure
client service levels are maintained as we meet the increasing demand for our
services.

In accordance with my statement on the results for the year to 31 December 2003,
CFA started the beginning of 2004 with a good pipeline of work and with a degree
of optimism that market conditions would enable these deals to be completed and
this was the case in the first quarter to 31 March 2004. However, in the second
quarter, in a number of cases transactions that we anticipated completing in the
first half have either been completed since the end of June or have been
deferred. This adversely affected our earlier expectations of financial
performance in the first half of the year.

Financial review
Despite these factors CFA achieved a creditable result in the first half.
Turnover was #510,000 (6 months ended 30 June 2003: #262,000 from continuing
operations), overheads (including plc running costs) were #609,000 (2003:
#458,000 on continuing operations) and the loss before taxation for the period
was #58,000 (6 months ended 2003: loss #208,000).

These results need to be seen in the context of our having completed the
flotation of Smallbone plc (admitted to AIM on 26 July) and Ragusa Capital plc
(admitted to AIM on 15 July). No income is taken into account in the period in
respect of these transactions, although a significant amount of the costs
relating to these flotations were incurred in the period.

CFA is now retained as Nominated Adviser to 20 AIM companies and retained Broker
to AIM 15 companies. Annualised recurring income currently totals over #340,000
representing approximately 30 per cent of total budgeted group costs, and we
anticipate that our level of retainers and this source of revenue will show a
significant increase by the year end. Our increasing base of retained clients
not only provides a source of recurring revenue but is also a prime source of
transactions.

On 27 May 2004 we announced a placing of 65 million new ordinary shares at a
price of 0.7p per share, to raise #441,340 net of expenses. As at 31 December
2003 the net assets of CFA Capital Group plc were #534,000. The impact of the
placing and the small loss in the period, has been to increase the Group's net
worth as at 30 June 2004 to #914,000, creating a sound financial base.

Current trading
We currently have a strong order book both in respect of a number of AIM
flotations and other transactions partially arising through our existing client
base. On the basis that we complete a good number of these transactions, we
anticipate a satisfactory outcome for the year as a whole.

Summary
On 31 July 2004, John Shaw stood down as a Director of CFA Capital Group plc and
all Group companies. John has worked with me for over 10 years and was a founder
shareholder of the Company in 2001. The Board thanks John for his significant
contribution and wishes him well for the future.

The Board also extends its thanks to the entire team for their efforts so far
this year.

thanks for response.when do we think the CFP price will go north. The second half was supposed to be positive with some profits assured /carried over from previous period.Is it just lack of news? surprised as the guys running this seem to be pretty smart

Hi willfagg: In my opinion many large shareholders have lost confidence in the management of this company by Stephen Barcley and they refuse to hold or buy anymore due to his handling of the market which is negatively old fashioned. (Time to retire .... long overdue)

Yep, i think its time to bail out while i can still walk away with something. This share is going nowhere and the management know it. Hyped up will not post profits in March they are struggling big time.

Can we as investors call for a meeting,or have we to watch our investment go down the drain, i to have e-mailed them but they just wont respond.

SueHelen, andros

Interested in these barbed posts - in fact, they are very different. SueHelen is making a general point about small companies and the effect on them of this period of the year when no news is anticipated until the New Year. CFP is not alone in sliding in the absence of news. Sue has an argument for waiting for the New Year before she invests. The only risk is probably that Barclay does respond to ptholden's request and put something out.

Hopefully, someone else will respond to andros, even if (s)he is acting as devil's advocate. I am aware that pth is otherwise engaged but what has happened to 'overgrowth'? My searching questions were well answered a few weeks back. Has andros read the projections included there? Is he aware that the interims would have been profitable if credit had been taken for two contracts completed in July? What are they doing, working 12 hours a day, if they are not making money? Is the criticism of Barclay baked on direct knowledge? What about the two staff taken on at the time of the interim report? Why does he feel that CFP are not getting their share of the explosion of AIM business reported this morning? Is his reporting objective as it appears to have an emotive ring? Is he shorting the stock?

Eric

Trouble is that there are so many shares in this company, i wonder what proportion are not bought.

taylormade

If CFP raise funds for a client on the AIM market then presumably the issue is underwritten and the client gets all the funds, together with the charges. Presumably the same applies to CFP though they would have raised the funds themselves?

Eric

I'm happy to hold mine until the results. Then we'll get a clearer picture, if they are working hard building the company hopefully the patient shareholders will benefit. This is like CYH-better put in a drawer and looked at in 12 months or even 2 years!

Hi EWRobson, yes my post was about the general market conditions including the fun the MMs been having with the spread. Otherwise, I am still very bullish about this company.

Hi Eric,

I'm still here and still have my original stake in CFP and I still have every confidence in the company. Volume has been very low until just recently when a couple of punters got bored and moved on (always inevitable with small caps. when news is thin on the ground), so any price changes are purely down to the MMs trying to drum up some trade in a dull moment.

We can't force CFP to work any quicker, so best to sit back, relax and let them get on with it. Any contact that is made with the company emphasises that they continue to be very busy e.g. Tony Rawlinson said they were working 12 hour days most days. That suggests to me that business is booming, and lots of deals and consultancy jobs are on-going, though just haven't come to fruition as yet.

We've always said that this is a longer term investment and whilst there's nothing to report at the moment I've been distracted by other things (I've been writing a program in my spare time to backtest some FTSE100 trading ideas and have also been following Retail Decisions with interest after their recent blockbuster trading statement).

Cheers

OG

overgrowth

Sounds fascinating. happy to be a guinea pig to test out your program concept. What, however, i was hoping you would do is answer the negative posts of andros. You might not have got back that far (1370,4). In particular, the supposed city view of Barclay. But sounds as if you are having fun - enjoy!

Eric

Eric,

I've found andros' post (I think I recognise the writing style from advfn and suspect that the outspill of "bad news" has the ulterior motive of allowing andros to heavily top up at the ridiculous price of 0.35p should any more folks be daft or desparate enough to sell at a loss).

To cover the points raised.

1. Bad management of PR. They have not helped the market enough to sustain the price with RNS etc. Alternatively this may be seen as admission that they agree with the new range of share price. In my opinion the latter is nearer to the truth. Basically the 1.5p spike was totally unrealistic.

*** Small investors have been hyped up to expect unrealistic phenomenal returns from this small company in a very short amount of time - hence when there is no news (because the company is working on much bigger deals which take much longer to attract financial backing from institutions), and they see the share price fall mainly falsely in the hands of the MMs they accuse the company of bad management of PR, not letting the shareholders know what's going on, etc. etc.

Over-investment in PR is not required for the company at this stage (remember these guys are in the middle of the City action). PR will reap benefits when rthe shares are consolidated to attract institutional support - but before then the company must concentrate on working hard, growing and moving well into profit. CFP will not indulge in PR just to help small shareholders trade their holdings! ***

2. Interim results were not as good as the market expected. Proof of this is the sp plumbeted after the interims.

*** "The market" right now is a bunch of small shareholders (albeit some with quite hefty stakes) and the directors and past directors. The directors were happy with the results, it's the small shareholders who weren't - again because possible profits had them all booking their Audi TTs, once their short-term dreams were shattered they couldn't hit the sell button fast enough lol!

Most people just saw the bottom line in the interims and neglected the revenue which had to be carried through into the second half (effectively 2nd half money for no effort). ***

3. The company actually is not making money. It is loosing money and I expect at best to break even this time round.

*** Refer to the short-sighted view mentioned above which "conveniently" neglects carried forward earnings. The company is moving from one with -ve profits to one with +ve profits, that suggests to me that they continue to move in the right direction. ***


4. The loss of one of their directors has been seen as a sign of trouble. There has been no recruitment and this is a sign of tough times.

*** Only one or two small investors that I know of thought that this was a problem - people move on for all sorts of reasons. John Shaw was a founding member and it appears that he has not sold any of his CFP shares which to me suggests that he has every confidence in Stephen Barclay and the team helping out his retirement fund. Also, none of the companies which John Shaw dealt with personally have voted with their feet - which suggests that clients have full confidence in the company as a whole ***

5. As a result of ramping in the other thread mainly early this year has resulted in multi-infated price which is gradually being deflated. The charts are just dreadful!

*** 0.75p-0.85p is a fair price for the company as it stands now until the profits are rolling in - so at the moment it is heavily undervalued (this happens all the time with small caps.). The spring "spike" appeared to be caused by a band of astute "City boys and girls" who ganged up and pretended to be shorting the share - this allowed them to buy in very low, then they hyped the share up like crazy and sold at the top" - a classic trading ruse and many were caught out and still bitter. Charts are meaningless without volume! ***

Cheers

OG

OG

Very good stuff. That is really a very balanced presentation. It may be that the share is not right for quite a lot of current holders who were perhaps looking for a quick buck - I'm not that patient a chap myself. That is not to say thay they should sell at current prices.

I suspect the best line to take on current valuation is to go back to the May 2004 funding when funds were raised at 0.7p per share. This would have been based on interim results expectations for the period to 30th June, probably at something of a discount. This supports your current fair valuation of 0.75p to 0.85p until we know for certain whether they are making profits; what is clear is that they are cash positive with no further cash calls indicated. The argument is that a pessimistic view says that they must at least be trading in line with expectations when the funds were raised; i.e. the fundraising price is supported. The arguments for a higher price are: (a) known business completions as reported earlier on this bb; (b) heavy level of current demand, witness the hours of working; (c) the unprecedented levels of activity in the AIM market. The cautionary note is that the final results may again be affected by business carried forward into the new year which is not accounted for.

I think it is prudent to take account of SueHelen's knowledgeable comments about the market for the smallcap and AIM companies in the latter part of the year when there is no news. The new year is a different kettle of fish; everyone starts looking for the success stories of 2005. Whether justified or not, the arguments from this bb are almost bound to cause the share price to jump. The results may or may not satisfy the hype that is then built up. You have paid your money, either come out with profits on the January surge or hold for the results. The only thing, in my view, which will bring an earlier recovery is some sort of trading statement from the company which would seem to be out of character: as we have said before, why produce it when they don't need any more funds?

In summary, flat in the short-term; speculative jump in January; proper valuation in March with the results. HOLD; wait before accumulating.

Eric

Eric,

A nicely reasoned post too, with the addendum that significant good news in the next 6 weeks will change sentiment beyond recognition, everyone will suddenly be rating CFP a STRONG BUY again and of course we'll have the "10p next week" merchants to look forward to lol!

OG

Eric,

A response from CFP recently posted on advfn:

"Thank you for your note to Stephen Barclay. I take on board your comment and we will improve the information flow to the market. We are working on a number of deals at present and are determined to get as many completed for the year end as possible.

Kind regards

Tony Rawlinson
MD"

Exactly as we suspected "We are working on a number of deals at present and are determined to get as many completed for the year end as possible."

Given this, CFP looks even more so to be strongly undervalued at the current price.

I forgot to mention before, when I get the backtesting sorted and if it looks good (I'm individually analysing all FTSE100 shares going back 5 years, rather than the index - hence the need for a program) I'll let you in on the secret.

Cheers

OG

Tony Rawlinsons comments would lead yopu to believe that they are hoping to win some deals buy the end of the year.there is only six weeks of this year left!so is good news just around the corner?

I hope i am not wrong when i say that the negative posts of yesterday may have been a little "downbeat". I hope there was no other motive

I have read with interest the opinion of overgrowth on CFP. I personally respect everybody's opinion after all each one does their own research and is responsible for their decisions.
I would point out that overgrowth says nothing to disprove my post earlier.
Therefore people should think hard on his motives.
As to whether the company makes money or not, I do not know for sure. But overgrowth claims he knows they are on profit because of a carry over. Well this shows to me that he does not or cannot read the interims or he wishes to paint a rosy picture.
This company needs revenue of no less than 1.2 million before they make profit. You should ask overgrowth where is this money. Then you would have a better view. The truth is he does not know nobody does.
The rest of his answers to my points are personal views and he has nothing to hold on.
I merely point out a contrarian view in my post I do not intend to deramp.
People should not fall in love with this stock nor follow a single opinion. Usually there is more than one answer to an issue.
When a director departs sure it can be for ordinary reasons. But for small companies it has an impact.
Whatever overgrowth says my best defence of the arguments I presented to you in the previous post IS the share price. At the end of the day it is you you buys or sells the market and your opinion determines the sp. Have a look at it. Does it look healthy to you? So things cannot be running smoothly.
It cannot be the market and smallcaps.
It is not me who tries to pull wool over your eyes.... Have a great day.

Overgrowth: Here you go....Rowlinson agrees with me on point 1 of my assertions.
Thank you

In fact every one of my 5 points are facts imo.

Willfagg: You said it. Lead you to believe ...sure but he does not say that they will be in profit. I do not know either if they will be but they are NOT yet. Look at the interims and the response to the interims from the MARKET...a price drop ....

I hope they will become in profit....We ask Overgrowth what revenue is needed to justify the EXISTING share price on FUNDAMENTALS . Where does he think it will come from when we do not know yet of any new companies floated and we have only weeks from the end of year.....I hope they be on profit but what are the chances?