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Dowgate Capital - Capitalising on the booming AIM market (DGT)
overgrowth
- 09 Feb 2005 20:52
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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. |
 Website: www.cityfin.co.uk |
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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. |
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ptholden
- 04 Feb 2006 22:14
- 1953 of 2787
Guys, Ladies... please chill!
Like Butane, I have owned this stock right back to Abinger and CFA (CFP) days albeit taking 2 lots of profit en route. Now I am sitting on a big "paper loss" having been "guided" back in by 2 amigos (sorry, guys - I won't mention names here!!). Think we can best summarise the New Regime, as follows, IMHO: -
Blah, blah
Markus, mention all the names you like, both myself and Eric are well aware of whom you refer to! I have told you this privately, but seeing that you insist on harping on about your paper loss, let me try the public route to hammer the message home.
1. Had you bought when I first recommended, you would have cleared almost if not 100% profit.
2. Yes, I did believe that the SP would continue to rise above 1p last year and was caught out by the fact that it did not. That belief cost me in profit twice as much as your total investment. So do me a favour and don't bang on about paper losses, it works both ways.
3. Ultimately, I did sell two thirds of my holding, but at a much reduced profit margin. So actually, I didn't suffer a paper loss, it was real (in profit terms).
You were advised / tipped (call it what you will) in good faith, as many of us are in this game, if it doesn't work out, don't look to blame others, put it down to experience at the end of the day, you made the decision.
Oh, and we won't mention CSH...................lol
pth
canary9 - 04 Feb 2006 23:34 - 1954 of 2787
Cheers,
Rod
markusantonius
- 05 Feb 2006 03:05
- 1955 of 2787
Back On-Topic: I have made a few quid out of Dowgate (in other names!) over recent years. But my main reason for "hesitancy" pre-2005 results had always centred around the company's historical GHW-links and the influence/leverage - call it what you will - that this entity may still hold over Mr. Rawlinson and Team?
On fundamentals (and assuming TR doesn't take the p*** again with over generous bonuses?) then yes, I agree, the sky really is the limit with this nicely placed minnow. All things being equal, the future looks very rosey, I agree, which is why I invested in the first place - a long time before most posters here had even heard about the company!
PTH/Eric, you must admit you both went way OTT on "tipping" this one (one only has to read through some of the old posts!). But yes, I agree - we are each ultimately responsible for our own investment decisions. "DYOR" should really translate into: "the final decision is yours, dude!".
Anyway enough - we are all playing for the same Team here. So no more sarcasm from The Shark. Peace. :o)
ptholden
- 05 Feb 2006 10:51
- 1956 of 2787
As Markus says, don't worry, he can't help being a whinging sheep shagger (Derby County supporter). As to going OTT, SP predictions are always fickle; as you will recall, during most of the run up to the results, a big seller offloaded millions of shares into SP strength, effectively stalling the rise, myself and others had expected. It is impossible to allow for the possibility that this may happen and all one can do is post with information that is available at the time. Anyway nuff said, maybe this time we might break the 1p barrier once more.
Good luck all
pth
EWRobson
- 05 Feb 2006 14:36
- 1957 of 2787
A word of caution. I supect that DGT is not a short-term traders. My experience this week has shown how narrow the market can become. The only way of buying the volume I wanted was to pay 0.6p when the sp was 0.49p. I eventually averaged just over .6p but I deemed the price worthwhile with the strength of the market. The same experience could occur with selling where a decent selling order, even of 1 millions shares could drive the price down and effect the price. Frequently you can only sell 100K shares at a time, although that was OK by me.
Its a fascinating situation. Its clear that Rawlinson is now in control, being Chairman as well as Chief Executive. I see the business links as a plus point. Now we know that he is a safe pair of hands. Has he also that entrepreneurial spirit which could take this small company a long way quickly? I think we will be able to guage that better after the statement with the results.
Eric
moneyplus
- 05 Feb 2006 16:00
- 1958 of 2787
markusantonius
- 05 Feb 2006 18:29
- 1959 of 2787
For long term s/holders, I don't think this is a major issue.
stockdog
- 05 Feb 2006 18:37
- 1960 of 2787
"I've looked at your figures, stockdog, and suspect that they are over-cautious."
As Bette Davis once said, "If you want an argument, pick a different subject!"
I suspect, once I get to my spreadsheets at the office on Monday, my revised figures for DGT, in light of last weeks good deals, will come very close to your target my main interest in which is helping to establish a selling point - since that was where I fell down so badly last year, failing to sell at the right time on a number of otherwise successful investments.
I would agree a 5th executive should lead to 25% increase in turnover, but over time - say 2 years, which makes a first year growth from zero to 12.5% average 6.25% - I am saying 10% growth in revenue for 2006 above (after loss of a recurring retainer fee of 25k). I am happy to up that by, say, 150,000 now to make it about 18.5% increase. Allowing the same 100k increase in overhead and a third in staff bonuses, this increases net profit by 100k to make a year on year increase of about 48% (compared to 19.5% previously estimated - just shows how highly geared the bottom line is to increase in fees once the overhead has been covered) to 522k for a PE of 7.6 at Friday's close of 0.64p. If this should be nearer 12.5 (I'm not always less bullish than you!) 12 months forward, then SP should move towards a target of 1.05p by year end - 1p party somewhere around (appropriately enough!) Thanksgiving. With a forecast PEG of 0.16 and even a projected PEG of only 0.26 the projected PE of 12.5 seems relatively modest.
Chatting with a pal in the street this morning who runs a group at one of the big 4 (or 3?) accounting firms, we both took note that the heavy m&a activity, looking likely to increase even more over the next 6 months, is typically a sign of the imminent end of a bull phase in the stock market as financial manipulators try to make profitability appear to continue increasing when real profit on real goods and services has in fact weakened to very much lower real growth. This could signal the end of the current FTSE strength and a sizeable retracement for a year or so and, in particular, the end of much expansionary prospects for NOMADS and Corporate Brokers. So I will be keeping a weather eye on market sentiment towards DGT from mid-year onwards, despite prospective numbers looking very good.
Keep the third Thursday in November free!
sd
canary9 - 06 Feb 2006 08:54 - 1961 of 2787
Someone got a big sell out there?
mysunshine - 06 Feb 2006 10:38 - 1962 of 2787
corehard - 06 Feb 2006 12:17 - 1963 of 2787
1.8m buys against 1.1m sells yet SP drop 5.5%
Any comments ?
stockdog
- 06 Feb 2006 12:43
- 1964 of 2787
snakey
- 06 Feb 2006 13:32
- 1965 of 2787
could they be flushing out sellers with impression that SP is going down and it`s "sell while you can", all to fulfill a big buy order ??
EWRobson
- 06 Feb 2006 13:55
- 1966 of 2787
canary, corehard. My experience from last week, when my 'big' (relatively) buy order played a part in pushing the price up, suggests that a sell order is in play: there were quite a few buys when the offer price was reduced.
Stockdog: we seem to be singing from the same hymn-sheet. Except that my 'thanksgiving' is easter! I was more positive for last year whereas you are adopting a positive position this year. I suspect it doesn't make a lot of difference because both will appear positive scenarios when the results are announced. I would expect the sp to move on a positive statment with the results and, this time, to hold it. I would doubt that there are many fickle holders left in this share!
Incidentally, our friend bosley has introduced me to PXS. Worth a look.
Eric
markusantonius
- 06 Feb 2006 14:07
- 1967 of 2787
stockdog
- 06 Feb 2006 14:13
- 1968 of 2787
I'll look at PXS - thanks bosley and eric.
sd
deadfred
- 06 Feb 2006 14:38
- 1969 of 2787
mind you srts have helped cause the crying was with laughter
to all the rest of you guy i hope this takes off for u
butane were are you i need to stop lol help
help
roflmao
butane
- 06 Feb 2006 15:47
- 1970 of 2787
corehard - 06 Feb 2006 16:13 - 1971 of 2787
Who's dumped the 6 mill then ?
rawsthornebj001
- 06 Feb 2006 16:21
- 1972 of 2787
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