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.

Hi Eric,

I calculated the probable net loss after the announcement as follows:

At interims CFP had 914K net assets of which 686K was cash at bank - hence as Tony Rawlinson says, they have the cash to see them through this temporary setback.

They had overheads of 609K in H1 so we can assume yearly overheads to be 1.218M.

A loss of 58K posted in H1 needs to be added to losses from H2.

I believe in H2 that two NOMADships were lost and we know that two more were gained (Dunn Line and Interbulk) so we can assume recurring income to remain constant.

We have 225K income carried forward from H1 plus 25K from sale of Ashdene shares.

Because CFP are not broker for Dunn Line or Interbulk I'm assuming that float fees will be around 100K for both. Add in 50K for other minor deals and consultancy etc.

This gives for H2:

Carried forward 225
Sale of shares 25
New business 150
Recurring income 170

Total income 570
Expenses 609

H2 loss (39)
H1 loss (58)

Hence FY loss before exceptional items looks like around 100K

John Shaw resigned so he should be entitled to nothing.

Stephen Barclay will probably be contractually entitled to a full year's salary of 125K.

Hence we're looking at approx. 225K loss posted at the end of this year (which will be reported in March).

Had things worked out (a prime example of their bad luck was Intandem films who were due to float but the jammy so and so's managed to get a hefty grant from the Film Council running over 3 years), we would have probably been looking at around 0.5M profit as you say.

The good news is that AIM popularity is predicted by City analysts to continue throughout 2005 - so CFP have another bite of the cherry, and that could well include some extra tasty morsels introduced by Griffin.

Not quite another Durlacher yet - though CFP have the potential for some spectacular performance in the coming months. Price is still bargain basement so there's plenty of upside potential in the sp.

All the best

OG

Thanks, Eric? (EWR). I only make guest appearances on these kind of bulletin boards when I'm after "neutral" input/feedback from fellow investors and the Layman. Also, yes in your diagnosis. I'm an opportunist (after years of making stupid mistakes on the markets!).

I like the comment from "Overgrowth"...

"The good news is that AIM popularity is predicted by City analysts to continue throughout 2005 - so CFP have another bite of the cherry, and that could well include some extra tasty morsels introduced by Griffin..."

Personally, I like CFA [you call it by symbol name: CFP!] and it's main players. IMHO if the comapny can get through the first part of 2005 relatively unscathed then it could be a huge winner in 12-24 months or so but doubtful a big riser in the near future.

From what I hear on the Grapevine - a firm bought a chunk of CFA stock in early 2004 and "pushed/marketed/promoted" the stock [call it what you will] only for it rise way above it's fundamental value (when I sold!) in Autumn 2004. Then most likely started to match deals and make profits for itself. This happens a lot on AIM/OFEX/Fledgling apparently. Not good. But at least I benefitted from it although could have made an extra 1k if I'd held for 2 days longer!

I am not an existing s/holder but if the spread narrows - or the buy price shortens - then I am seriously tempted to get back on board. IMHO 2005 will be a hot time for punters picking out the right stocks.

Will keep more of an eye on these Boards from now on, I think!

...

Markus.

Thanks for your comments-we long term holders welcome your input!

Just being honest, Moneyplus! No hidden agenda. And remember: I was a long-term holder myself (3 yrs)!!!

Was attracted by the company back then and am considering a major RE-punt imminently. If I do, will be seeking you guys (long-t'ers') input in due course......

Yea - the long term !

Markus - I always refer to shares by their EPIC to avoid confusion. Also, if there are any newcomers with an interest in doing further research into CFA - they might give up when the (perceived) EPIC can't be found.

At one time I invested in Redstone Telecom (EPIC RED) and Retail Decisions (the company refer to themselves as ReD in their literature and a lot of posters used RED to refer to RTD) !

Thanks, OG for that, and a few others come to mind now I think of it! I'll go with "CFP" from now on.

Please bring me up to speed with you [l-t] guys - what have I been missing over the past few months that should pursuade me into investing? What are the company's strengths and weakness?

If you were a salesman, where would you start? Why should I opt for CFP as opposed to the umpteen oil and natural resource stocks which are doing very well, right now?

Forgot to ask - what do you all consider as being "LONG TERM"?

Markus - 2004 was the year for mining stocks (peak of the metals cycle), lots of folks reckon that it ranked alongside 1974, 1979 and 1989 - good years tend not to be repeated too quickly.

I think oil prices will remain high in 2005, though not soar upwards as they did in 2004. This could mean that there will be lots of petro companies looking very overvalued as the year progresses, which will precipitate large sell offs.

Investing in CFP right now is pure speculation, however we do know that they are capable of good work and have 20 odd clients on their books which provide a handy recurring income. What we need to see is lots more action from them in 2005 when it comes to floating new companies on AIM and brokering placement deals - when this news starts to come through it will be evident that the company is back on the right track and with the backing of Griffin could well be in a prime position to really take advantage of the popularity of AIM.

Long term on an AIM stock in my books is anything above 2 years (that's when the full CGT relief kicks in).

Strengths:
Now run by Tony Rawlinson (previous MD) who has been instrumental in getting most of major deals done by CFP through to market. This younger guy is going to be much more dynamic than the "old guard" Stephen Barclay and John Shaw who were possibly more concerned about retirement than running a successful company.

Small enough to work closely with growing companies and care about their future - good selling point when compared to the "faceless" larger NOMAD/brokers.

Expenses are not as much as the bigger competitors, hence they are able to give a better deal to smaller companies wanting to float.

City Financial Associates are recognised within City circles as a solid, reliable company.

Weaknesses:
Were useless at PR both for prospective clients and investors in the past, however we're anticipating that this will change with the change of CEO.

Under the reins of Stephen Barclay, I believe that CFP were a little too cautious - again this should all change in 2005.


I'm "locked in" to CFP because of the higher price I bought at, so I'm willing to let them run for a couple of years and see if they can really become a blockbuster company under the new leadership.

If the company does take off then today's prices are a steal.

I believe 2005 will bring many opportunities for CFP to grow and expand and Griffin will compliment CFP's growth by introducing American companies, and others, to the AIM market via CFP.
Griffin didn't recently invest 150k in CFP for a 'punt', they invested because they see business potential and now have a 'vested' interest in making CFP a successful company...the article below demonstrates an increasingly strengthening AIM market



Aim lands its 1,000th company

Guy Dresser, This is Money
10 December 2004

THE Alternative Investment Market now has 1,000 companies trading on it for the first time. Educational courses provider AEC Education became the 1,000th company early today after it was brought to the market by Nabarro Wells, its nominated adviser. Hichins, Harrison & Co is AECs broker.

Another business, Leptis Magna, a natural resources company specialising in Africa also listed broker WH Ireland managed the placing of 2.5m shares.

Keith Smith, director of Nabarro Wells, has been active with Aim companies since the market started in 1995. Then at Gerard Vivian Grey, Smith brought Formscan to Aim.

Passing the 1,000 mark is seen as a huge vote of confidence for the market. Aim has proved an attractive market for small cap businesses transferring from the main market because of lower listing fees, lighter regulation and inheritance tax advantages for family-owed firms.

But Smith says overseas companies in particular see Aim as an attractive market in which to list, some having been scared off Nasdaq by the rising tide of regulation in the US.

He added: 'Theres a much better quality of business coming on Aim now, it's become a major source of funds for overseas companies. There is also big demand for natural resource stocks and developing interest in overseas industrials.'


Smith advised Australian wine business Palandri on its successful Aim listing earlier this year. And although AEC is a UK company, it operates in Malaysia and Singapore the business is the first Singaporean operation to have a sole listing on Aim.


Investors are increasingly attracted to Aim, although large funds were initially reluctant to invest in the market. Framlington has emerged as one of the biggest investors, having initially declared that its funds would not invest in Aim stocks.

Markus

Good questions. I agree with overgrowth's response. I don't know how much you have trawled through the last two or three months on the bb. I recall one of the posters calling CFP and speaking to Rawlinson who said that they were working 14 hours a day and implied little time for communication. It would probably have been easier for them to be operating privately - when you have 5 professionals, the last thing you want is to be pestered by impatient short-termers, but then they are servicing AIM clients and need to be one themselves. Its interesting that CYH (cybIT) have recently made a 50 for 1 issue to raise the price away from the penny share traders. The weakness and strength of CFP is that they are largely, on top of a basic income stream, a success paid venture: the weakness, as we have seen, is that several contracts together don't see the light of day as has happened in the last quarter; the strength is the gearing from the work done by the professionals.

Now CFP is currently capitalised at less than 2m. They could easily earn 500K in the first half of 2005, say 1m for the year which would put them on a PE of 2! This could happen or it may not. What is a reasonable bet is that they will come good, sooner or later, for the reasons already stated. Long-term for me implies patience. I would put the probability as pretty high, say 0.75, that there is a breakthrough in 2005. The downside is probably no worse than now as regular revenue builds up. I see the up/down ratio as better than 5:1. My 10K could be 50K by the year end or it could still be 10K. I happen to like that sort of bet!

Eric

overgrowth

I don't know whether you have looked at cybIT (CYH)? If you have the time, I would appreciate it if you would look at my recent posts - I sense you may be a good sounding board for my current exercise to try to evaluate the impact of the recent changes in accountantcy practise, the effect of which has been to knock the share in the market, largely without justification. Many thanks.

Eric

Thanks, OG, Butane and Eric for interesting reads.

Will monitor the stock closely this week and, if I can get in at the right price, then I'm tempted to have a punt and let it ride for the year.

My main concern is a repeat of 2004 when a firm bought a chunk of stock and artificially pumped up the price only for it to slump in the ensuing weeks. Well, at least if this reoccurs we might all be able to benefit in the short. But, from what I've seen, panic selling & short selling does more harm than good in the end.

But whatever, definately worth a look. And will surely seek you guys' knowledge if/when I buy in again.

Kus.

Eric, I think CFP are basically reliant (very heavily) on these 5 top guys then? If one was to leave, how much of a set-back do you think that would be?

Not read much on the BB's till recently, I'm afraid. To save me some research time (I'm lazy!), can anyone bring me up to speed with "Griffin", please?

OK been energetic for a change, I now know of Griffin and its input.

The more I read, the more I like what I read.................

markus,
out of pure curiousity, what are the bits you like from what you`ve read through ???

Griffin's own [apparent] emerging profile itself followed by its 150k purchase of CFP. Since it now owns 10% of the company then it must be relatively confident of good times to come - a vested interest. Also synergies/contacts amongst its other companies.

Since the previous directors now hold <2(or3%?)% then any short term deals (sales) they would otherwise have been tempted to make will not now adversely affect the sp.

It might only take 1 or 2 big deals to get CFP going again.

(Sorry if this has already been repeated by other posters? But I am new to the BB's, remember!)

markus

Agree your response. The point about the five guys is that they are the ones quoted on the website for external work - worth having a look. Rawlinson is the key player with an excellent track record. I suspect he was carryiong Barclay and Shaw was probably too expensive. Back office probably pretty slim: some research, admin., financial control. They brought in two new people Q3 and I suspect won't have much problem building up with growing business. Has a really good feel about it now.

Eric

Sent email to TR regarding director shareholdings, this is his reply......

..I hold 14.5m shares in CFA Capital Group plc which have been acquired mainly when the company was founded, but also in each of the share placings since then.
Kind regards

Tony Rawlinson

OK, guys. I'm looking to get "back in". Just waiting to get within the 10p. spread, that's all.

markus

Quote from stocktrade is 0.26p to sell, 0.32p to buy. Reckon that's a good buy price. Goodbye!

Eric