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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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markusantonius
- 31 Mar 2006 15:26
- 2291 of 2787
Definitely a sure-thing ($) for the future although must admit to becoming somewhat irritated by the odd 0.01p drop here and there ever since its latest quantum leap. Expect this to happen now till new potential deals (like above) have been made known to the mkt. Hold and sit back, I think, otherwise there's always the risk of missing the next big jump - which WILL happen.
kimoldfield
- 31 Mar 2006 15:32
- 2292 of 2787
I just cannot fathom this share out. We have here a growing company, with no or little possible downside to its value, an endless supply of work (unless AIM is abolished!) and the only way to go is up. What do investors do? sell....why? and who is taking the shares? MMs of course. To what end....so that they can hike the sp to at least double what they will have paid for it on the next bit of good news (and it can surely only be good, especially if they will be taking in clients from the US) and then buy another yacht or whatever takes their fancy. Oh, i have just fathomed this share out so I now have to fathom out why anybody would want to sell!!
kim
kim
corehard - 03 Apr 2006 09:05 - 2293 of 2787
Took another 0.5m this morning.... didn't show on the board !!!
Global Nomad - 03 Apr 2006 09:09 - 2294 of 2787
are we lining up for the next kick up?
butane
- 03 Apr 2006 09:12
- 2295 of 2787
More work....
Hill Station PLC
03 April 2006
Date: 3 April 2006
On behalf of: Hill Station plc
For immediate release
Hill Station plc
Change of Advisers
The Board of Hill Station plc, the manufacturer of Hill Station, Loseley,
Granelli and private-label ice creams, announces that it has appointed City
Financial Associates Limited ('CFA') as its Nominated Adviser and Broker with
effect from 1st April 2006.
Enquiries:
Hill Station plc
Charles J Hall, Group Managing Director Tel. 01633 833000
City Financial Associates Limited
Tony Rawlinson Tel. 020 7090 7800
Redleaf Communications
Emma Kane/Sanna Lehtinen Tel. 020 7955 1410
Notes to Editors:
Hill Station's strategy is to position itself as an efficient manufacturer
of a broad range of ice cream products capable of responding to private-label
customer demand across the product quality and price spectrum as well as in
branded sales.
On 18 November 2005, Hill Station plc acquired 100% of the issued share
capital of Granelli McDermott Limited and Loseley Dairy Ice Cream Limited in
two reverse takeovers.
The Hill Station Group manufactures and markets super-premium ice cream
under the Hill Station brand, premium ice cream under the Loseley, Yorkshire
Dales, Thayers and Louis Granelli brands, and standard ice cream under the
Granelli's and More from Granelli brands, as well as a broad range of ice
cream products under supermarket and other customer brands.
This information is provided by RNS
The company news service from the London Stock Exchange
Global Nomad - 04 Apr 2006 08:28 - 2296 of 2787
From todays Independent, note the paragraph relating to minimum fund raising - will this affect the level of DGT fees?
"In March, the LSE warned that it wanted to stem that steady stream of cash shells by giving them only a short window in which to do a deal and forcing any company coming to AIM after 1 April to raise at least 3m."
---------
AIM gets tough and suspends record number of cash shells
By Gary Parkinson, City Editor
Published: 04 April 2006
Trading was suspended in the shares of a record 38 companies on the Alternative Investment Market yesterday after the junior stock market began its crackdown on companies that have raised money but have not yet done anything with the funds.
Those to have their shares suspended include Azure Holdings, formerly the scandal-hit Room Service, and Capricorn Resources, an investment firm formerly chaired by the mining entrepreneur Phil Edmonds.
Another, Gasol, is headed by Haresh Kanabar, a cash-shell specialist holding senior jobs at several.
Mr Kanabar is involved in Black Raven Properties, which avoided suspension after a land deal in Portugal last week, and Indian Outsourcing Services, which raised 3m and is thought on the brink on unveiling an acquisition.
The 38 so-called "cash shells", each with less than 3m in the bank but still valued at a total of about 54m, were all set up and floated with the intention of buying other businesses to run.
The London Stock Exchange, which runs AIM, is concerned that many of the glut of cash shells joining the junior market sit there for too long without using any of their cash. The share prices of the smallest companies were too easy to manipulate, it said.
They are difficult to value and some investors were buying in simply to take advantage of tax breaks.
A spokesman for the LSE said: "Well-capitalised cash shells that have a clear investment strategy have a valid home on AIM. But small, uninvested cash shells present an unacceptably high reputational risk for the market and are not suitable to be quoted on it."
In March, the LSE warned that it wanted to stem that steady stream of cash shells by giving them only a short window in which to do a deal and forcing any company coming to AIM after 1 April to raise at least 3m.
Those sitting on at least that must now hold a meeting of investors every year to vote on an investment strategy until a deal is done.
Companies with less than 1m were given a year to make an acquisition or face suspension.
The number of companies to be frozen would have been much higher, it was said, but for a flurry of about 15 deals in the past fortnight to beat the deadline. About 75 of the 1,400-odd companies now trading on the junior market are thought to be cash shells.
Suspended companies have six months in which to do a deal or be dropped from AIM altogether.
Suspension is likely in itself to make any acquisition tougher, as managers of target companies take advantage of the looming deadline to push for better terms. For those that are delisted, the most attractive option is likely to be the lightly regulated Ofex exchange.
Moving to Ofex will hit a company's market value, but would save shareholders from finding themselves stranded in a wholly private company with less chance of selling on their stakes.
"In March, the LSE warned that it wanted to stem that steady stream of cash shells by giving them only a short window in which to do a deal and forcing any company coming to AIM after 1 April to raise at least 3m."
---------
AIM gets tough and suspends record number of cash shells
By Gary Parkinson, City Editor
Published: 04 April 2006
Trading was suspended in the shares of a record 38 companies on the Alternative Investment Market yesterday after the junior stock market began its crackdown on companies that have raised money but have not yet done anything with the funds.
Those to have their shares suspended include Azure Holdings, formerly the scandal-hit Room Service, and Capricorn Resources, an investment firm formerly chaired by the mining entrepreneur Phil Edmonds.
Another, Gasol, is headed by Haresh Kanabar, a cash-shell specialist holding senior jobs at several.
Mr Kanabar is involved in Black Raven Properties, which avoided suspension after a land deal in Portugal last week, and Indian Outsourcing Services, which raised 3m and is thought on the brink on unveiling an acquisition.
The 38 so-called "cash shells", each with less than 3m in the bank but still valued at a total of about 54m, were all set up and floated with the intention of buying other businesses to run.
The London Stock Exchange, which runs AIM, is concerned that many of the glut of cash shells joining the junior market sit there for too long without using any of their cash. The share prices of the smallest companies were too easy to manipulate, it said.
They are difficult to value and some investors were buying in simply to take advantage of tax breaks.
A spokesman for the LSE said: "Well-capitalised cash shells that have a clear investment strategy have a valid home on AIM. But small, uninvested cash shells present an unacceptably high reputational risk for the market and are not suitable to be quoted on it."
In March, the LSE warned that it wanted to stem that steady stream of cash shells by giving them only a short window in which to do a deal and forcing any company coming to AIM after 1 April to raise at least 3m.
Those sitting on at least that must now hold a meeting of investors every year to vote on an investment strategy until a deal is done.
Companies with less than 1m were given a year to make an acquisition or face suspension.
The number of companies to be frozen would have been much higher, it was said, but for a flurry of about 15 deals in the past fortnight to beat the deadline. About 75 of the 1,400-odd companies now trading on the junior market are thought to be cash shells.
Suspended companies have six months in which to do a deal or be dropped from AIM altogether.
Suspension is likely in itself to make any acquisition tougher, as managers of target companies take advantage of the looming deadline to push for better terms. For those that are delisted, the most attractive option is likely to be the lightly regulated Ofex exchange.
Moving to Ofex will hit a company's market value, but would save shareholders from finding themselves stranded in a wholly private company with less chance of selling on their stakes.
stockdog
- 04 Apr 2006 10:14
- 2297 of 2787
I saw elsewhere that two of DGT's companies fro which they are NOMAD/Broker were suspended yesterday - Archimedia and Quintessentially English. I think, on balance, this is good for DGT who will earn fees advising them now and should accelerate their search for a reverse takeover - more fees.
butane
- 04 Apr 2006 10:31
- 2298 of 2787
Croatia Ventures also suspended.
butane
- 04 Apr 2006 11:20
- 2299 of 2787
New work.......
AIM
04 April 2006
COMPANY NAME:
Mobestar Holdings Plc
COMPANY ADDRESS:
Unit 39, Surrey Technology Centre
40 Occam Road
Surrey Research Park
Guildford
Surrey
United Kingdom
COMPANY POSTCODE:
GU2 7YG
COUNTRY OF INCORPORATION:
England and Wales
Mobestar Holdings Plc is a holding company for a trading subsidiary which is a specialist provider of wireless
video applications and services to deliver 2.5G and 3G mobile entertainment and other video based services to
consumers via video mobile technology.
Number of shares: 38,268,990
Type: Ordinary Shares of 1p each
Issue price: TBA
CAPITAL TO BE RAISED ON ADMISSION:
Nil
FULL NAMES AND FUNCTIONS OF DIRECTORS AND PROPOSED DIRECTORS:
Paul Robinson, Executive Chairman
Peter David Richards, Chief Executive Officer
Michael Geoffrey Wilkinson, Finance Director
Leon Jan Anton Brand, Non-executive Director
PERSON(S) INTERESTED IN 3% OR MORE OF THE ISSUER'S CAPITAL, EXPRESSED AS A PERCENTAGE OF THE ISSUED SHARE CAPITAL
BEFORE AND AFTER ADMISSION:
Number of
Shares on Admission
Paul Robinson 5,824,000 15.22%
Peter Richards 6,000,000 15.68%
Antonius Aries 3,000,000 7.84%
Allard De Stoppelar 3,000,000 7.84%
Lammert Braaksma 1,450,000 3.79%
Pali Sebok 1,400,000 3.66%
Harry Belderbos 1,340,000 3.5%
ANTICIPATED ACCOUNTING REFERENCE DATE:
31 December
EXPECTED ADMISSION DATE:
21 April 2006
NAME AND ADDRESS OF NOMINATED ADVISER:
City Financial Associates Limited
Pountney Hill House
6 Laurence Pountney Hill
London
EC4R 0BL
NAME AND ADDRESS OF BROKER:
Midas Investment Management Limited
2nd Floor
Arthur House
Chorlton Street
Manchester M1 3FH
AIM
04 April 2006
COMPANY NAME:
Mobestar Holdings Plc
COMPANY ADDRESS:
Unit 39, Surrey Technology Centre
40 Occam Road
Surrey Research Park
Guildford
Surrey
United Kingdom
COMPANY POSTCODE:
GU2 7YG
COUNTRY OF INCORPORATION:
England and Wales
Mobestar Holdings Plc is a holding company for a trading subsidiary which is a specialist provider of wireless
video applications and services to deliver 2.5G and 3G mobile entertainment and other video based services to
consumers via video mobile technology.
Number of shares: 38,268,990
Type: Ordinary Shares of 1p each
Issue price: TBA
CAPITAL TO BE RAISED ON ADMISSION:
Nil
FULL NAMES AND FUNCTIONS OF DIRECTORS AND PROPOSED DIRECTORS:
Paul Robinson, Executive Chairman
Peter David Richards, Chief Executive Officer
Michael Geoffrey Wilkinson, Finance Director
Leon Jan Anton Brand, Non-executive Director
PERSON(S) INTERESTED IN 3% OR MORE OF THE ISSUER'S CAPITAL, EXPRESSED AS A PERCENTAGE OF THE ISSUED SHARE CAPITAL
BEFORE AND AFTER ADMISSION:
Number of
Shares on Admission
Paul Robinson 5,824,000 15.22%
Peter Richards 6,000,000 15.68%
Antonius Aries 3,000,000 7.84%
Allard De Stoppelar 3,000,000 7.84%
Lammert Braaksma 1,450,000 3.79%
Pali Sebok 1,400,000 3.66%
Harry Belderbos 1,340,000 3.5%
ANTICIPATED ACCOUNTING REFERENCE DATE:
31 December
EXPECTED ADMISSION DATE:
21 April 2006
NAME AND ADDRESS OF NOMINATED ADVISER:
City Financial Associates Limited
Pountney Hill House
6 Laurence Pountney Hill
London
EC4R 0BL
NAME AND ADDRESS OF BROKER:
Midas Investment Management Limited
2nd Floor
Arthur House
Chorlton Street
Manchester M1 3FH
EWRobson
- 04 Apr 2006 11:54
- 2300 of 2787
Good to see the flow of new work. As our wise old dog (WOD for short; dog's need nicknames) sayeth: support level being established around 0.8p; no logical reason for selling; we know that trading is ahead of budget (extra analyst being taken on); everything running for the AIM market (approached recently to take shares in a US state distributor). The other key point is effect of CGT: some profits may have been taken to utilise CGT allowance. In this case the buy-back will be delayed by 30 days to avoid the bed and breakfast situation - movement in sp around 5th May?
Eric
Eric
markusantonius
- 04 Apr 2006 12:08
- 2301 of 2787
Good post, Eric. I agree with your sentiments exactly.
stockdog
- 04 Apr 2006 12:24
- 2302 of 2787
EDIT 20.20pm - seem to have got a bit mixed up transferring figures from Spreadsheet to BB - apologies. Corrected figures follow - actually rather better than my earlier attempt which please ignore.
We need one more new retainer client at 15k p.a. to meet my modelled target for new clients in H106 with a further almost 3 months to go this half. We're doing well with transaction fees of est. 582,500 in Q1 and should continue to do as well if not better reflecting the increase from 4 to 6 to 7 execs since New Year. I am allowing the same again for each of Q2/3/4. For H1 I'm now estimating 1,552k revenues against 665k overhead less 532k bonuses plus 22k interest for a H1 net profit of 377k - about 30% ahead of last year's H1.
For H2 I'm looking at respectively 1,649k revenues, less 770k overhead and 527k bonuses, plus 28k interest = 380k net profit, 3.2 times last year's H2 - ignoring the fortuitous 179k profit on disposal of investments.
So full year figures will be 3,201k revenues (up 42%) less overhead 1,435k (up 34%) and bonuses 1,060k (up 44%) plus interest 50k (up 150%) for a net profit before & after tax of 756k - 85% up on last year's earned profit, excluding the profit on disposal (28% up on declared net profits, including the profit on disposal).
This gives a 1 year PE of 7.37 and a PEG of 0.26 - great value, making the shares worth IMHO well in excess of 1p by end of year. At a 1 year PE of 12.5 (quite modest on this rate of growth in EPS) the SP should be 1.39 mid-price and still only a PEG of 0.43.
The biggest risk factor in the above is the achievement, or otherwise, of the transactional fees of 2.33m for the year, which is exactly 4 times the 582,500 that I estimate we have earned by end of Q1 (of which only 67,500 is guestimated, the rest being actuals from DGT's website library) - quite achievable given the increase in execs, but nonetheless the largest risk factor in my model.
I continue to hold on tight to the big dipper that is DGT's SP currently. Do I detect a nice little platform building at 0.80p from which to spring up to 1.04p next time the market feels so inclined.
sd
We need one more new retainer client at 15k p.a. to meet my modelled target for new clients in H106 with a further almost 3 months to go this half. We're doing well with transaction fees of est. 582,500 in Q1 and should continue to do as well if not better reflecting the increase from 4 to 6 to 7 execs since New Year. I am allowing the same again for each of Q2/3/4. For H1 I'm now estimating 1,552k revenues against 665k overhead less 532k bonuses plus 22k interest for a H1 net profit of 377k - about 30% ahead of last year's H1.
For H2 I'm looking at respectively 1,649k revenues, less 770k overhead and 527k bonuses, plus 28k interest = 380k net profit, 3.2 times last year's H2 - ignoring the fortuitous 179k profit on disposal of investments.
So full year figures will be 3,201k revenues (up 42%) less overhead 1,435k (up 34%) and bonuses 1,060k (up 44%) plus interest 50k (up 150%) for a net profit before & after tax of 756k - 85% up on last year's earned profit, excluding the profit on disposal (28% up on declared net profits, including the profit on disposal).
This gives a 1 year PE of 7.37 and a PEG of 0.26 - great value, making the shares worth IMHO well in excess of 1p by end of year. At a 1 year PE of 12.5 (quite modest on this rate of growth in EPS) the SP should be 1.39 mid-price and still only a PEG of 0.43.
The biggest risk factor in the above is the achievement, or otherwise, of the transactional fees of 2.33m for the year, which is exactly 4 times the 582,500 that I estimate we have earned by end of Q1 (of which only 67,500 is guestimated, the rest being actuals from DGT's website library) - quite achievable given the increase in execs, but nonetheless the largest risk factor in my model.
I continue to hold on tight to the big dipper that is DGT's SP currently. Do I detect a nice little platform building at 0.80p from which to spring up to 1.04p next time the market feels so inclined.
sd
EWRobson
- 04 Apr 2006 22:13
- 2303 of 2787
Great post, sd. It appears a no-brainer. Given the potential of the market for over-shoot, we could be looking for a run up beyond 1.5p perhaps to 2p by the time fo this year's results. However, potential investors should be aware of the dependency of the company on a small number of very good people; also the Aim market would not be immune from a market down-turn. Risk probably low but not non-existant.
Eric
Eric
stockdog
- 06 Apr 2006 13:32
- 2304 of 2787
Just been re-reading Jim Slater's "The Zulu Principle" in which he sets great store by gearing (or lack thereof) and return on capital.
Well, DGT has no gearing and plenty of net cash and its return on average capital employed for 2005 (the average of the net assets at Dec 04 and Dec 05) was 63% incl. disposal of investments and 43% without. Slater thinks anywhere over 20% is in the right area.
As for 2006, my figures suggest a ROCE of 46%. Net Profit margin is 17% last year (excl. disposal) and 22% projected in my figures for 2006. Slater aims for 10-20%.
Given that this is a no-plant service company, you'd expect the figures to be better than for a heavy industrial, but even so they are spectacular by all normal measure.
In full, Slater's 11 criteria are:
1. Positive 5 year record - well, we don't have that - yet
2. Low PE to Growth (PEG) - we certainly have that
3. Optimistic Chairman's statement - tick
4. Strong liquidity - tick
5. Competitive Advantage - not sure what this is, perhpas that DGT can deal under the radar of bigger fish
6. Something new - new management, evidently working
7. Small market cap, i.e. overlooked by institutions - you could say that!
8. High relative strength - certainly well- ahead of FTSE AIM All Share and Financials Sector over the last year, albeit a tad more volatile en route
9. Dividend yield - not yet, but very likely to commence this year with a debut final pay out
10. Reasonable Asset Position - net asset per share of 0.1755p = 22% of SP - not too bad. Could be 0.2867p per share or 35% of SP by end of 2006. OK for a growth share.
11. Management shareholding - TR holds 25m shares 4.04% of total plus options on 32m shares with an exercise price of 0.285 - 0.74p and finally warrants to subscribe for 2.3% of the company's capital.
The perfect share - all they have to do is continue to bring in the business!
Good luck all holders.
sd
Well, DGT has no gearing and plenty of net cash and its return on average capital employed for 2005 (the average of the net assets at Dec 04 and Dec 05) was 63% incl. disposal of investments and 43% without. Slater thinks anywhere over 20% is in the right area.
As for 2006, my figures suggest a ROCE of 46%. Net Profit margin is 17% last year (excl. disposal) and 22% projected in my figures for 2006. Slater aims for 10-20%.
Given that this is a no-plant service company, you'd expect the figures to be better than for a heavy industrial, but even so they are spectacular by all normal measure.
In full, Slater's 11 criteria are:
1. Positive 5 year record - well, we don't have that - yet
2. Low PE to Growth (PEG) - we certainly have that
3. Optimistic Chairman's statement - tick
4. Strong liquidity - tick
5. Competitive Advantage - not sure what this is, perhpas that DGT can deal under the radar of bigger fish
6. Something new - new management, evidently working
7. Small market cap, i.e. overlooked by institutions - you could say that!
8. High relative strength - certainly well- ahead of FTSE AIM All Share and Financials Sector over the last year, albeit a tad more volatile en route
9. Dividend yield - not yet, but very likely to commence this year with a debut final pay out
10. Reasonable Asset Position - net asset per share of 0.1755p = 22% of SP - not too bad. Could be 0.2867p per share or 35% of SP by end of 2006. OK for a growth share.
11. Management shareholding - TR holds 25m shares 4.04% of total plus options on 32m shares with an exercise price of 0.285 - 0.74p and finally warrants to subscribe for 2.3% of the company's capital.
The perfect share - all they have to do is continue to bring in the business!
Good luck all holders.
sd
kimoldfield
- 06 Apr 2006 13:53
- 2305 of 2787
Incredible stuff sd! I am still amazed at how slow the investors and institutions are at picking up this share, quite happy about it in another way because on any further erosion of the sp, I shall pick up another sizeable wad!
kim
kim
EWRobson
- 06 Apr 2006 21:26
- 2306 of 2787
Come on, sd, give us the downside. Where's the risk analysis? Clearly, there is dependency on key staff, but they are obviously paying them well and prospects must be attractive. Suspect they are now quite heavily dependent on Rawlinson or did you pick up that there was succession planning. The other significant potential risk, I suppose, is that they are 100% dependent on the health of the AIM market so the question then relates to the risks of that market: regulation? effect of US acquisition of Stock Exchange? I don't see anything to lose sleep over but we should think about it.
I think a re-rating will happen quite suddenly. This could happen at the interims when we should have the third successive period of signifant growth in revenue, profits and cash. I feel the stake of RIL is very positive as they will not want management to rest on their laurels. Do we feel that they have built up their stake as far as they might want? If they did want to grow the stake, then I think they would do this in a quiet period because any buying could drive the price up prematurely (from their viewpoint). But I do agree with Kim that this is a share to gradually stack away.
Eric
I think a re-rating will happen quite suddenly. This could happen at the interims when we should have the third successive period of signifant growth in revenue, profits and cash. I feel the stake of RIL is very positive as they will not want management to rest on their laurels. Do we feel that they have built up their stake as far as they might want? If they did want to grow the stake, then I think they would do this in a quiet period because any buying could drive the price up prematurely (from their viewpoint). But I do agree with Kim that this is a share to gradually stack away.
Eric
stockdog
- 06 Apr 2006 22:00
- 2307 of 2787
There's always some moaning minnie! Seriously, point taken, Eric.
I am not so worried about succession yet, since TR is a fit, middle aged man but, if something befell him, they would almost certainly need to look outside for a new team leader. I wonder if they have key man insurance - they should have.
The key risk, I believe, is the AIM market and apetite for new issues of low caps. This could fade quite rapidly overnight and I do not know what DGT has in its armoury to remain favourite in a reduced market - maybe simple, old-fashioned integrity is their USP. As TR said to me at the AGM, he is not complacent about this risk. Would diversification into fuller scale brokerage be a protection or a liability in a dwindling market?
Will TR's plans for growth benefit the company and lead to increased margin and ROCE - or as so often happens with mergers and acquisitions, will these statistics decline after the event - starting off the cycle of demergers once again. Who remembers the old conglomerates of the 80's - Hanson, Tomkins, etc - where are they now?
One thing we haven't really examined is the likelihood of DGT itself becoming a target - but I'm never sure what you buy when you buy a service company. More likely the key team would be simply poached, leaving a dead husk behind. TR would probably lose his share options were he to leave - not inconsiderable, currently all exercise prices below the share price, but nothing a golden handshake could not remedy.
Costs are not a risk - they are controllable - no fees, no bonuses and the rent is fixed.
Debt is not a risk - there is none.
Currency rates and the risks of foreign settlement are beyond our cares.
Basically we are fortunate, but exposed, in having a 7-man profit machine, led by an exceptional man, making an extraordinary amount of money from advising a diverse range of companies that I certainly would not want to invest in - would you? Perhaps, there is the reputational risk of being associated with too many shady AIM shells that could be the root of our undoing.
No, it certainly is no blue chip yet. But whilst they toil away assiduously for our benefit, why not take advantage of it whilst margins, profits and ROCE last!
sd
I am not so worried about succession yet, since TR is a fit, middle aged man but, if something befell him, they would almost certainly need to look outside for a new team leader. I wonder if they have key man insurance - they should have.
The key risk, I believe, is the AIM market and apetite for new issues of low caps. This could fade quite rapidly overnight and I do not know what DGT has in its armoury to remain favourite in a reduced market - maybe simple, old-fashioned integrity is their USP. As TR said to me at the AGM, he is not complacent about this risk. Would diversification into fuller scale brokerage be a protection or a liability in a dwindling market?
Will TR's plans for growth benefit the company and lead to increased margin and ROCE - or as so often happens with mergers and acquisitions, will these statistics decline after the event - starting off the cycle of demergers once again. Who remembers the old conglomerates of the 80's - Hanson, Tomkins, etc - where are they now?
One thing we haven't really examined is the likelihood of DGT itself becoming a target - but I'm never sure what you buy when you buy a service company. More likely the key team would be simply poached, leaving a dead husk behind. TR would probably lose his share options were he to leave - not inconsiderable, currently all exercise prices below the share price, but nothing a golden handshake could not remedy.
Costs are not a risk - they are controllable - no fees, no bonuses and the rent is fixed.
Debt is not a risk - there is none.
Currency rates and the risks of foreign settlement are beyond our cares.
Basically we are fortunate, but exposed, in having a 7-man profit machine, led by an exceptional man, making an extraordinary amount of money from advising a diverse range of companies that I certainly would not want to invest in - would you? Perhaps, there is the reputational risk of being associated with too many shady AIM shells that could be the root of our undoing.
No, it certainly is no blue chip yet. But whilst they toil away assiduously for our benefit, why not take advantage of it whilst margins, profits and ROCE last!
sd
EWRobson
- 07 Apr 2006 17:38
- 2308 of 2787
sd: I reckon that is your best psost yet and that is saying something. Forecasts are fine but they can change almost at the tip of a pen or with one major event. But the key is 'key man'. What you say about Rawlinson says it all. We are talking about a small company in a significant growth market, establishing a niche in that market and growing to a position when it can take over the established, but perhaps overweight leaders. The unusual thing is that we have the opportunity to both understand what is going on and to invest in the company. This is only because their line of business implies they need to have floated themselves. So its a one-off. We are looking in on a small emerging shooting star. We have s stake at an early stage. Rejoice and be glad, folk! Build and acquire! Fight off the profits of doom! Possess the land!
Eric
Eric
stockdog
- 07 Apr 2006 21:46
- 2309 of 2787
Eric The Seer has spoken. Carpe terram!
Paulo2
- 10 Apr 2006 09:40
- 2310 of 2787
Dowgate Capital Plc ("Dowgate" or the "Company")
Holding in Company
Pursuant to section 198 of the Companies Act 1985, the Company received
notification on 7 April 2006 that Mr Neville Groom has a beneficial interest in
18,600,000 ordinary shares in Dowgate, representing approximately 3% of
Dowgate's issued share capital.
This is one of the PIs over on the ADVFN board.
Holding in Company
Pursuant to section 198 of the Companies Act 1985, the Company received
notification on 7 April 2006 that Mr Neville Groom has a beneficial interest in
18,600,000 ordinary shares in Dowgate, representing approximately 3% of
Dowgate's issued share capital.
This is one of the PIs over on the ADVFN board.
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