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

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.

Significantly more business going through this year in comparison to the same period last year. Capper(js) posting lots of stuff across the road. Bodes well for the final results to be published early next year. If they do manage to keep this up DGT will be trading on a stupidly low PE and surely will be due for a re-rating eventually.

Interesting to see the SP is holding up quite well under a steady flow of what appear to be sells. MMs even nudging the Bid up a tadge. Over the last few trading days L2 has been 3 v 1. Seems they are teasing out impatient holders, wonder if they are filling an order? The market activity certainly seems to suggest as much, no doubt all will be revealed in due course.

Personally, I am quite happy to hold until next year and see what the next set of Results bring.

pth

Same here Pete, although I wouldn't be unhappy to see the price drop in the meantime, so that I could buy back those I sold after the last full year results!

Not sure we will see much of a fall now Rod. DGT has done its normal sell off after results and stabilised at this level. Having being in this for the best part of two and a half years now, it's becoming something of a no brainer, sell after the results, buy back about 3 months later. Mind you, sooner or later, these sell offs will be a thing of the past. When you compare DGT's profitability to other small caps with similar figures, the SP is a joke.

pth

Very quiet on this side!!

Tumbleweed again !

tumble price too!

still holding everything I've bought, but getting a tad nervous given the overall economic outlook for continuing new issues and m&a's.

sd

Yep, still monitoring myself, Stockdog, and noticed same. That's why I got out with small profit, some time ago, as you may recall. I now have to disagree with our mutual friend, PTH, regarding his profit-taking/re-investing plan in this company, 3 months either side of their results. His cyclical pattern observation may indeed hold true. But, like you have infered above, the overall outlook may not be as healthy as it was 1 or 2 years ago. If true, this will obviously hit Dowgate very hard.

Still watching but no immediate plans to rush back in, at the moment. Sorry, Pete!

There seems to be a lot of pessimism on the board, particularly considering the amount of work coming through. I'm going to wait and see what they do with all that money in the bank before I even think about moving on. I think we may be hearing about an acquistion sometime in the next couple of weeks.

Here's another I've just found, which I think takes up to 22 transactions so far thisFY!

ONE MEDIA HOLDINGS PLC
APPLICATION TO PLUS

One Media Holdings plc ("One Media" or the "Company") is applying to have its
shares traded on the PLUS market.

LISTING DETAILS

Sector classification:- Media
Principal activities:- Exploitation of audio and visual copyright
Corporate Adviser:- City Financial Associates Limited

BACKGROUND

The Company and its subsidiary comprise a newly formed Group which has been
formed to acquire and exploit audio and visual copyright within the field of
mainstream "middle of the road" music genres through new distribution
technologies, by internet downloading and mobile telephony. The Group currently
has non-exclusive access to over 70,000 music tracks from independent
suppliers, but the Directors are negotiating contracts for exclusive
downloading of distribution rights and as at the date of this Document have
negotiated exclusive agreements in relation to more that 8,800 tracks.

DIRECTORS

Brief details on the directors are set out below:

PAUL JOHN EVANS, AGED 59, NON-EXECUTIVE CHAIRMAN

Paul has extensive experience in growing and developing companies. Paul is a
majority shareholder and non-executive chairman of The Storage Depot Group
Limited and a 50 per cent. shareholder and non-executive chairman of Rentacrate
Limited an established crate rental company which was acquired from Hays plc in
2003. Paul is also currently the executive chairman of Interdean International
Relocation Limited, established some 40 years ago and specialising in the
relocation of corporate executives for world wide trading corporations from
some 57 locations in 40 countries. He founded Trans Euro Plc in 1974 and grew
the turnover to GBP50m by 2000, when he sold the business to a venture capital
firm.

MICHAEL ANTONY INFANTE, JP, AGED 49, CHIEF EXECUTIVE OFFICER

Michael has over 15 years' experience in the production, trading and
exploitation of music copyrights. Michael co-founded the AIM listed company,
Air Music & Media Group plc, in 1995. Michael was head of marketing and
recording projects for Tring International Group plc between 1992 and 1995,
gaining significant experience in all aspects of rights management and in
directing and recording a number of classical albums with the Royal
Philharmonic Orchestra for the company's own catalogue. Prior to that he was
sales and marketing director of Creamery Fare Ltd, a subsidiary of Hazlewood
Foods Plc.

KEITH JOHN SPRINGALL (FCA), AGED 50, FINANCE DIRECTOR

Keith, a Chartered Accountant, is an experienced finance director. Keith is the
Finance Director of AIM listed Bulgarian Property Developments plc and was
Group Finance Director in 2005 of AIM listed Bartercard plc, the B2B trade
exchange that operated from 120 offices in 16 countries. Prior to that he has
held a number of senior financial positions including that of Commercial and
Finance Director of Hi-Tec Sports International, the GBP100m turnover footwear
and clothing brand and with Jardine Matheson in Hong Kong and Australia. Keith
is also a director of Molecob Ltd, Village Bookshops Ltd and WFMH UK Limited.

PLACING

Conditional on admission of the Company's shares to trading on PLUS, the
Company's broker Seymour Pierce Ellis Limited has agreed to procure placees for
27,533,344 new ordinary shares at a placing price of 3p per ordinary share, to
raise proceeds (before expenses) for the Company of GBP826,000. On admission
to PLUS, the Company will have 69,133,334 ordinary shares of 0.5p in issue.

Trading in the shares on PLUS is expected to commence 25 September 2006.

Copies of the Admission Document will be available free of charge during normal
business hours on any weekday at the offices of City Financial Associates
Limited, Pountney Hill House, 6 Laurence Pountney Hill, London EC4R 0BL.

The directors of One Media accept responsibility for this announcement



Contact details

Michael Infante One Media Plc 01753 785 500
Liam Murray City Financial Associates Limited, 020 7090 7800
Corporate Adviser

With One Media, we'll have 45 clients, with 23 of them as broker. Not long before the half-century.

SD, how many were you hoping for before the year's end?

Dowgate Capital PLC
28 September 2006

Dowgate Capital Plc / Ticker: DGT / Index: AIM / Sector: Finance

Dowgate Capital Plc

Proposed acquisition of Seymour Pierce Ellis Limited
Placing of 392,307,692 New Ordinary Shares at 0.65p per share
Re-Admission to trading on AIM

Overview

Dowgate Capital Plc ('Dowgate'/'the Company') proposes to acquire
private client agency stockbroker Seymour Pierce Ellis Limited ('SPE') for 4.65
million in a cash and shares deal comprising 4 million in cash with the balance
paid to the vendor in new Dowgate Ordinary Shares.

By gum! Would you have dared even to suggest it! What a wopper but note that profit level is similar to DGT so that the benefits of synergy should add significantly to the share price. We are in for a very interesting day tomorrow. What sayest thou, our resident sagacious dog?

Eric

Hi Eric, thought this might bring you out of your lair.

Quick skim through suggests two questions:-

1) Why the 50% tax charge on SPE for H1 2006 - to do with splitting out SP Ltd?

2) 25% of enlarged capital as options - I guess all the new ones will have exercise prices in excess of SP on 26 September, so should not be overly dilutive, but quite a chunk reserved for the chosen few.

Otherwise very pleased with the transparency of the figures.

Very quick calculations show the following statistics, although I admit I have not done a consolidated P/L and balance sheet to prove them. As to margin and ROCE they are very well matched. On combination they will have margin of 27.5%, ROCE of 29% and PE of just under 6. I think combined they will have cash of 2.42m (largely imported on SPE's BS) less the 1m loan, still leaves net cash of 1.42m - very comfortable. So gearing will still be zero. Interesting to note the "net cost" which is 4.65m purchase price, less 2.24m cash on SPE's BS = 2.41m net cost.

The enhanced value of the combined op. + organic growth of each division, from a PE of <6 (extract the net cash on the BS and the PE is probably <5!) with good margin and ROCE and net cash seems to fit the bill for a medium term hold. Sadly, since nearly 20% of my portfolio, don't have funds to add. At least I'm saved that decision.

How will the market take it tomorrow? Fair value has to be a PE of at least 12 - so let's see the SP double in short order!! I shall be up early to watch and see.

Eric, are you pleased? What's your view?

IKN, DYOR

sd

Further to above, have now done post acquisition BS, as follows:-

'000
Goodwill 2,480 (= purchase price of 4.65m less cash on SPE's BS of 2.24m and (0.7m) other bits and bobs on SPE's BS)

Other bits (130) basically tangible fixed/current assets less current liabilities lumped together - odd, but true

Cash 3,040 (DGT 1,680n + SPE 2,240 + 2,120 raised net of exp + 1,000 loan less 4,000 paid to buy SPE)

Loan (1,000)

Net Assets 4,390 = Total shareholders funds (old DGT 1,620 + 2,120 net new capital raised + 650 shares issued to vendor)

Net cash post-acqstn is therefore 2,040, much better than stated above.


Combined PL of H1 X 2 (hope it's rather better than this) for a guestimate full year result will be

Revenue 3,980 X 2 = 7,960
Profit before tax 1,102 X 2 = 2,204 for a margin of 28% and ROCE of 2,204/(4,390 + 1,000) = 41% rather more than stated above.

Tax I guess to be about 853 (allowing H1 as reported + H2 full 30% for DGT and still 50% for SPE). I expect this to be less.

Profit after tax 1,351 at least

Market cap at today's SP of 0.73 X 1,120,655,000 shares fully diluted for options and warrants = 8,180,781.50.

So a fully diluted PE of 6.055. Netting off projected end of year net free cash from BS we get an enterprise PE of 4.06.

Fair value at a PE of 12 (??) suggests SP should double or more by time of/soon after 2006 results even with no further growth.

Thereafter, SP should rise with annual EPS growth - say 15-20% pa would be quite nice?

Finally, with free cash of 2,688 (net of tax creditor and loan) at year end, TR might even throw the crumb of a dividend to his sharehounds. This in turn should create additional market interest and perhaps allow the PE to sustain a higher rating.

Anyone else with different figures, please shout. This is my first attempt ever at reverse takeover accounting!

stock dowg

thats a quick rise & fall... profit taking on news
Should see actual reflection in near future... I see 1p just a grasp away

:)

SD - Can't fault that.

What to do with the residual cash is the question. I still think TR may be on the acquisition trail, looking to diversify to cover risk in certain aspects of the marketplace.
I notice with the SPE purchase he's really only bought one key member of staff who he's tied-in with a 3-year contract therefore margins I would expect to improve dramatically yet not get too unhealthy with a downturn in that oparticular line of business.
Dividend would be good, I know from communications I've had with him that once the takeover is put to bed he wants to focus efforts on attracting larger strategic investors, he feels that perhaps some of his aspirations are hampered by the huge number of small shareholders there are.

Expect a consolidation next?

Nev

Nev - agree, TR has clearly signalled further acquisition(s). What area of business would you imagine - IVA's?? lol! - seriously, what would fit, a boutique merchant bank? Could he hope to buy one with his resources?

If I were TR, and I talked to him about these two issues last AGM, I'd go for a) 10 for 1 consolidation - even that would not make this share noticeably illiquid for small holders whom he professed to be wanting to be loyal to, and b) a maiden dividend. He made me smile when he said "well, I'm a shareholder too"! Don't think the divie is quite going to reach the level of his 400k bonus!

I haven't mentioned this before, but I was thinking about it over night - his bonus, although at some level well-deserved and all that, is somewhat a slap in the face for us mortals who get no profit share. His bonus would pay a 4.9% dividend at yesterday's 0.73p SP. Were there to be a bunch of significant holders (RIL, Nev etc - anything above 25% of issued capital represented) who thought likewise, they could always bring this concern to his attention, since I do not think it sustainable as the company grows, especially as he and staff are also well bedded in with 25%(!!!) of diluted capital in options.

sd

Posted by paulo2 on the other side.........



From Citywire:

Two broking firms specialising in raising cash for smaller companies are coming together as part of the widely-expected consolidation in the sector.

City Financial Associates, part of quoted Dowgate (DGT), is taking over private client broker Seymour Pierce Ellis in what amounts to a reverse takeover.

The bulk of Seymour Pierce's business is generated by legendary deal maker Clive Mattock, a well known figure on the city scene since the mid-sixties.

CFA is paying 4.6 million for SP and part-funding the deal by placing new shares at 0.65p to raise 2.5 million. Dowgate shares edged up 0.01p to 0.735p gives it a stock market value of 4.8 million.

Both firms have strong links with the smaller end of the company market. Analysts have been predicting mergers among some of the key players for sometime.

The combined group will be valued at 7.2 million. CFA is an adviser to 39 AIM companies and six companies on PLUS, the old Ofex market. In the half year just ended it earned profits of 485,000 on turnover of 1.7 million.

Seymour Pierce, based in Crawley, Sussex, has around 1,500 clients and is broker to 49 companies - 42 on AIM and five on Plus.

Last year it was involved in 57 transactions raising a total of 32 million. It made a profit of just under 1 million on turnover of 5.5 million.

The firm's key deal maker is Clive Mattock who has entered into a three-year service contract following the merger.

Seymour Pierce has made a profit for each of the last ten years except for 2002, the bear market for smaller companies when it made a loss of 324,000.

Dowgate chairman Tony Rawlinson said: 'The acquisition of Seymour Pierce represents an important step in our plan to build a group of complementary financial service businesses offering a range of services to smaller quoted companies'.

Thanks, sd, for your excellent analysis. My own holding is somewhat down due to demands on cash, a situation that will not be corrected for a month or so. So you will understand if I keep my porder dry. However, your current and pojected pe says nearly all plus further potential acquisitions. In a way, this is all about a fundraising acquisition, one man and a line of business. Impressive!

Eric

Has everyone left this board? not a single post for 9 days.

Eric, how is that little Westie of yours growing up now i expect? we are babysitting our regular one again for a week while the owners are away up to London.