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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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stockdog
- 02 May 2006 06:59
- 2348 of 2787
Who knows what's holding the SP down, but value will out in the end.
sd
Global Nomad - 02 May 2006 13:51 - 2349 of 2787
US firms flock to AIM
There is little doubt that AIM has become the number one place for small US companies in search of a stock market listing.
There are now 29 US companies quoted on London's junior market.
Of those, 19 were admitted in 2005, raising well over 1bn of new money.
In the meantime, there has been a marked decline in the number of small companies listing on American exchanges.
Two key factors seem to be driving these trends. First, the Sarbanes-Oxley reforms rushed through Congress in 2002 after the Enron and WorldCom accounting scandals have simply made the process of getting and holding on to a New York quote excessively fraught with regulation and cost. The New York Stock Exchange said as much just last week.
Second, the Nasdaq Stock Market has imposed minimum market capitalisation and share prices on companies. This has left US firms valued at under 200m with nowhere to go.
On Thursday, two US lawmakers said they were drafting legislation to roll back portions of the Sarbanes-Oxley reforms.
If they are successful that might stem the tide of small American small companies abandoning Wall Street.
Meanwhile, AIM looks set to continue to cash in on its newfound popularity.
Global Nomad - 08 May 2006 11:52 - 2350 of 2787
a good sign i would have thought.
capper - 08 May 2006 22:15 - 2351 of 2787
NOMAD 18000
Placement 70000
A good way to start May
EWRobson
- 12 May 2006 22:31
- 2352 of 2787
Eric
white westie - 12 May 2006 22:48 - 2353 of 2787
Barry Saint
It was picked up on the other BB by jscapper a good spot, looks like thing are moving along now will be able to manage more work.
ww
Global Nomad - 13 May 2006 09:40 - 2354 of 2787
This may in turn lead to some reconsideration of timing of IPO's and those seeking to join the market. Clearly any change in sentiment in this regard as opposed to general performance of indices will have an effect on DGT revenue streams.
what think you good people? What is the mood going to be over the next few months?
GN
Good to see the sp move up in opposition to the general trend
Kivver
- 13 May 2006 09:47
- 2355 of 2787
stockdog
- 13 May 2006 11:07
- 2356 of 2787
The increase in M&A activity IMHO signals the end of the profit up cycle. When profits can no longer be grown organically, they need to appear to be grown mechanically. We still have never learnt from history that M&A so rarely creates real additional wealth when done to create the illusion that profits are continuing to grow after the top of the economic cycle.
The next phase of the cycle (which we're in?) is the constant press comments that the market is remaining bouyant (beyond expectation) whilst M&A gets into a final flurry of city chaps making their last fast buck for a while.
Nobody can ever tell which week the spell breaks and the markets start an inexorable journey south to the bottom of the next cycle. You pays your money and you takes your choice whether (like Templeton) you like to make money by consistently selling too early (lack of greed), or you like to wait until you can see the downward slope fully formed in retrospect (lack of fear). If either method allows you to sell at say 15% below the top, then the former must be better in terms of cost of money and preservation of capital. Nobody every went broke banking a lesser profit rather than a greater loss.
So, as I have said before, and as TR admits, we cannot afford to be complacent about this current market which has many signs of being about to top. 1) It is at a very high level 2) Against expectations 3) The press is very positive 4) The professionals are making money mechanically (chatting to a corporate lawyer at a party on Thursday, she's never been busier, especially with overseas companies wanting to list on AIM). Summed up, I'd say those expectations may be more accurate than we let ourselves believe. I still have no idea when the peak will be, but a look at the charts shows that the FTSE100 could well be stalling and AIM all share has reached the top of the 5th wave (Elliott followers anyone?).
The trick is to be in stocks that will grow whatever the macro climate. I am not 100% sure DGT is one, since as the market tightens companies may retreat to larger more established brokers. Although, I'd bet DGT could keep their prices more under control from a much smaller overhead which could be reduced %age wise significantly with the loss of only one or two staff. But can they find the money as easily as older brokerages to feed their client's capital requirements as it dives deeper under rocks and into still pools.
If I go on anymore I shall have to apply for full membership of the Ramblers' Association. My final remark is to suggest you watch this one closely over the next few months in the context of its available market to continue growing. I continue to hold all my shares in high hope of my previously projected re-rating, but my hopes are becoming more balance with my expectations these days.
BTW - we only need another 250k to add to the 1.2m we've booked so far for H1 to hit my half way revenue projections. All depends to what extent work on hand can be concluded in the next 7 weeks - or held back not to overegg H1 in support of H2?!?
sd
Kivver
- 13 May 2006 14:09
- 2357 of 2787
stockdog
- 13 May 2006 19:19
- 2358 of 2787
I've been wanting to find a source of sector/market PE's for some time without success - I'd have thought any of the main internet sites Digital Look, MAM, ADVFN would provide this, but I can't find it anywhere. I think FTSE PE is about 13 currently - and historically averages about 14, but you'd better check these numbers before relying on them.
sd
EWRobson
- 13 May 2006 19:33
- 2359 of 2787
Re DGT, do your figures, sd, take into account carried forward business from 2005. I don't believe we see which accounts have actually closed in the period. If that is the case it makes sense just to measure new business as the variation in order book at period end may not be that significant.
Off to Cafe Uno for a decent Italian gnosh; plus some Rioja of course. After all the Spaniards are better at wine and football. Tough on West Ham, wasn't it?
Eric
Global Nomad - 13 May 2006 20:11 - 2360 of 2787
I guess I hope the re rating happens before the turn in the market has any effects on the sp
as usual its about wait and see...
success for liverpool, lets hope arsenal follow their lead not middlesboro' snd DGT likewise
stockdog
- 13 May 2006 20:40
- 2361 of 2787
(On the other hand, if he thought H2 was likely to dive below any bonus threshold, he would be closing deals as fast as possible so as to boost H12 bonuses and not sink the deals into a black hole of zero bonus for H2! Sorry, did you think that accounting was an objective science?)
Happy rioja - I'm off to the Groucho Club for a drink with some mates (although why they'd want to belong to a club that would have them as members, I've no idea!)
sd
EWRobson
- 14 May 2006 21:40
- 2362 of 2787
Having been involved in running a consultancy, I agree your comments - end of year is always a matter of balancing the need to optimise bonuses with not raising too high a threshhold for the following year. In our case the bonus was based on several bands so you would just achieve the bottom of a band and keep the next business for the following year. Not a problem really because I reckon what is good for operating team is good for the shareholders. TR is both anyway and i expect the others are: in that way they participate in the wealth creation of the company in addition to their own income.
My point remains that there will be business carried forward so that your figures will probably be an understatement. It also seems to me that it is in the interests of the City for the AIM market to continue to be successful and, in particular, draw in international business. So our company could have a certain amount of built-in recession-probity (is that in the canine dogtionary?)
Eric
Global Nomad - 15 May 2006 10:22 - 2363 of 2787
thinking if I can top up...
Kivver
- 15 May 2006 11:03
- 2364 of 2787
markusantonius
- 15 May 2006 13:43
- 2365 of 2787
So thanks again to Eric, PTH and Preadteur for re-guiding back into this splendid little company. I made a few quid yet again, albeit it took a while! Anyway wish you all well...
Markus.
EWRobson
- 15 May 2006 17:55
- 2366 of 2787
Eric
nevgroom - 16 May 2006 11:08 - 2367 of 2787
Along with these other moves by existing clients posted in the last 24hours, I would think we've made considerable contributions towards a very healthy H1
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