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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
- 07 Jul 2006 09:06
- 2432 of 2787
Still here and looking forward to the Interims in August.
I think you have to accept that the nature of DGT's business does not lend itself to much in the way of news flow. Announcing that they have secured a new client is akin to any other company revealing they have achieved some sort of sale or small contract win. It just isn't going to happen. Mind you, a Trading Update every now and again would be helpful. DGT is a bi-annual two trick pony. Buy before the results and sell some time after, unless you are taking a really long term view.
pth
white westie - 07 Jul 2006 09:23 - 2433 of 2787
Glad someone is still around.
I was referring to trading updates when i said news we never get one.
I believe the results will be very good when announced and the SP should climb up around 1.5p (providing TR does not go silly on the bonus payments) and thereafter fall back again to around 1p as DGT can never hold onto a price rise for long it always falls back, this is something they need to address if they want to attract larger buyers ( hence news flow, trading updates) as you say its a two trick pony.
ww
stockdog
- 07 Jul 2006 10:56
- 2434 of 2787
" PTH - I make a total of 826,775 (860k) repeat retainer fees earned this year so far to end H1 including H2 payments for existing clients (as of Corsie's float). I also estimate further retainer fees of 78,750 (80,000) in H2 making a total of 905,525 (940k) or 63% (65%) of my estimated 1,435k (1,425k) overhead (excluding bonuses). This compares to an estimated 48% cover last year.
On a fully annualised basis by end if H2, we would have on the above basis retainer fees of 1,047k (1,075k) against an overhead of 1,540k - 68% (70%) cover.
We should continue to improve again next year with no/low new staff and more newly acquired retainers agaisnt a more modest increase in overhead.
BTW With Constellation Group work that just about completes my target revenues for H1 of 1,454k - with still 3 weeks to go! My actual estimate revised as at 30th June is 1,445,575."
So we lost a client near the end of H1 and did not find a replacement before June 30, but altogether a goood performance with turnover up 40% on last year and half time profit of 337,230, up 16% on last year.
Mildly frustrating that TW does not seem to believe in trading updates at H1 end. Last year interims were out on 18th August - I expect a similar (possibly a tad earlier) date this year.
I am happy to be patient and remain moderately confident, with a weather eye on the number of new issues being re-priced or withdrawn since the general May down turn in the market. Will this affect DGT's market niche - my guess is probably yes, a) directly, although I believe small new companies will continue to float at all states of the market and b) by next level up NOMADs losing bigger client transactions and starting to poach smaller fry from DGT's level. TW's outlook in the interims will be crucial IMHO.
sd
nevgroom - 08 Jul 2006 08:18 - 2435 of 2787
If anyone can fill in the "?" it would be appreciated
Note: This excludes retainer fees and non-publicised transactions
Contemporary Enterprises
January
0
55,000
15,000
0
5,000
75,000
I.A.F. (TFR from official list to AIM)
January
?
?
?
?
?
?
Euro Capital
January
0
35,000
15,000
0
0
50,000
Clarkson Hill
February
0
70,000
20,000
5,000
0
95,000
I.A.F. (Placing & Admission to AIM)
February
0
75,000
18,000
0
0
93,000
Strontium
February
0
40,000
12,500
2,500
0
55,000
Interbulk
February
225,000
30,000
15,000
0
0
270,000
Dunn Line
February
0
0
18,000
0
0
18,000
Practolus
March
0
50,000
17,500
0
0
67,500
Mobestar Holdings
April
75,000
0
18,000
0
0
93,000
One Charter
April
0
40,000
15,000
0
0
55,000
Atelis PLC
May
0
70,000
18,000
0
0
88,000
Ashford International Hotel PLC
May
?
?
?
?
?
?
Euro Investment Fund PLC
May
0
75,000
20,000
0
30,000
125,000
Corsie Group PLC
June
0
0
18,000
0
65,000
83,000
Constellation Corporation PLC
June
?
?
?
?
?
?
Avid Holdings PLC
June
?
?
?
?
?
?
Lakas Investments PLC
July
tba
tba
tba
tba
tba
tba
Process Handling PLC
July
tba
tba
tba
tba
tba
tba
Totals
300,000
540,000
220,000
7,500
100,000
1,167,500
corehard - 10 Jul 2006 09:11 - 2436 of 2787
nevgroom - 10 Jul 2006 12:55 - 2437 of 2787
corehard - 10 Jul 2006 14:42 - 2438 of 2787
arawli
- 12 Jul 2006 12:19
- 2439 of 2787
All the best
Andy
ptholden
- 12 Jul 2006 18:43
- 2440 of 2787
pth
stockdog
- 12 Jul 2006 18:47
- 2441 of 2787
1) the NOMAD and Broker retainer fees need to be adjusted to 50% of their value for Jan - Mar and 25% of their value from Apr to Jun to tell you how much has been booked in H1.
2) you need to add in 50% of annual retainer fees from clients gained in prior periods - I make this about 302k after adjusting for 3 lost clients in H1
3) the gaps you have are much the same as mine for which I have allowed certain (cautious?) sums.
On this basis, I make H1 total revenues 1,445,575. There - I've stuck my neck out. Be swift and merciful when the interims are published!
pth - by any stretch of the imagination, valuations suggest you are correct, so long as there are enough investors out there awake during the sleepy summer months.
sd
ptholden
- 13 Jul 2006 21:12
- 2442 of 2787
It is patently obvious that there is little DGT stock available at the moment. In general over the last few days on line limits have been extremely restrictive if you are trying to buy - 37,500 for example today, whereas they are willing to take 500,000 of your hands. It isn't going to take much buying pressure to send the SP upwards and onwards. Of course, sellers could put in an appearance and spoil the fun!!
I also understand that the Interims will be out in two weeks or so. I believe that the figures will not disappoint, afterall, most of the transactions are already in the public domain via the CFA web site. What does interest me is how far the company have progressed the fund raising aspect of the business and if any acquisitions are forthcoming. It will also be interesting to see how that cash pile is growing (if at all) over 1M six months ago.
pth
EWRobson
- 14 Jul 2006 22:07
- 2443 of 2787
I would be surprised to see an acquisition because there must be much room for organic growth. Movement into fund-raising on a significant scale can be achieved by recruitment which appears to their preferred method of growth. Good sign that the figures should be available early, i.e before the end of the month.
Eric
stockdog
- 16 Jul 2006 08:28
- 2444 of 2787
Paulo2
- 17 Jul 2006 09:09
- 2445 of 2787
markusantonius
- 18 Jul 2006 01:14
- 2446 of 2787
No spare funds to punt (still $UERING big-time over Stanelco but that's another story!). Watching with interest though... Wish you all well !
Paulo2
- 18 Jul 2006 07:11
- 2447 of 2787
ptholden
- 18 Jul 2006 09:40
- 2448 of 2787
The SP didnt collapse prior to the last set of Interims. A large seller appeared selling into the strength of a rising SP, effectively stalling the rise. As you can see from the chart, it got going again shortly thereafter. The sell off afterwards was the usual post Results sell off exacerbated by the declaration of bonuses. As Paulo has stated the issue of bonuses came as something of a surprise (although it probably shouldn't have) and the uncertaintity of what was paid to whom spooked investors into selling. All that is in the open now (Final Results), and we look forward to the next set of Interims. Not so much because of the figures (anyone who has done any research knows they will impress) but because of what TR plans for the future. Expansion / Acquisition / Dividends. We shall soon know.
pth
markusantonius
- 18 Jul 2006 12:35
- 2449 of 2787
white westie - 21 Jul 2006 08:13 - 2450 of 2787
corehard - 21 Jul 2006 08:35 - 2451 of 2787
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