Sharesmagazine
 Home   Log In   Register   Our Services   My Account   Contact   Help 
 Stockwatch   Level 2   Portfolio   Charts   Share Price   Awards   Market Scan   Videos   Broker Notes   Director Deals   Traders' Room 
 Funds   Trades   Terminal   Alerts   Heatmaps   News   Indices   Forward Diary   Forex Prices   Shares Magazine   Investors' Room 
 CFDs   Shares   SIPPs   ISAs   Forex   ETFs   Comparison Tables   Spread Betting 
You are NOT currently logged in
 
Register now or login to post to this thread.

Dowgate Capital - Capitalising on the booming AIM market (DGT)     

overgrowth - 09 Feb 2005 20:52

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.

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.
Chart.aspx?Provider=Intra&Code=DGT&Size=Chart.aspx?Provider=EODIntra&Code=DGT&Si

EWRobson - 07 Mar 2008 22:27 - 2712 of 2787

Hi,stockdog Still not moved. The sale fell through but the decision is effectively taken to move to Sherborne or, perhaps more likely, Sturminster Newton.

My reading of the website is that H2 will do well to match H1 but it would be unusual if the dividend didn't match. The expansion of Ellis services is good; presumably it will add a fund-raising service to CFA clients. My holding is pretty small compared with earlier, exciting times; become a pretty drab share. But if it makes money and dividends that can't be bad. I still believe it will take off some time but we may have to wait for a healthier financial climate.

Marvellous meal tonight - just about the best Rib Eye Steak I can remember and the Rioja was superb. Sweet dreams!

Eric

Global Nomad - 11 Mar 2008 08:22 - 2713 of 2787

results out,
final dividend of .6p
good results I guess given the market conditions....
change of name

what chance of changing the down trend ...

Global Nomad - 11 Mar 2008 09:24 - 2714 of 2787

does anyone get the feeling that this share is now so far off investor's radar that with relatively good results there is absolutely no activity, either trading or posting, bar a single sell trade

how will this share recover any further ground if the results cannot lift it.

don't mean to be pessimistic and like them I do feel optimistic for the company, I would just like to see that reflected in the sp.

white westie - 11 Mar 2008 09:52 - 2715 of 2787

7 trades on both markets so far i make it,

buys 16,898
sells 146,232

I also cannot see how this share will recover lost ground as results only lifted it 0.5p bloody rubbish.
plus while they are paying these new bods with such a massive share option when they have yet to do anything.

ww

stockdog - 11 Mar 2008 12:33 - 2716 of 2787

The chasm between excellent revenues and the division of net spoils between shareholders and management is now beyond a joke. And now we learn we have given away 22% of our company to attract the 2 new Ellis directors! They'd better start earning their keep, and fast!

With a joke of a non-exec in the person of good ol' boy Ian Buckley, TR and friends are no longer making any pretence at fair play.

The dividend of 7.4% alone makes this worth holding, but I utterly despair of any prospect of a re-rating of the SP whilst the company is cynically bled dry of any potential accumulating value..

We need a remuneration committee which excludes TR and to split Chairman from CEO function. It's up to all of you to be heard at the AGM. Anyone know if there is a rule allowing PI's to enforce an agenda item for discussion?

white westie - 13 Mar 2008 13:55 - 2717 of 2787

not much comment about the results and the large payments to the new bods on this board, have most of the people who used to post on here given up in disgust and sold out?
only stockdog has offered his opinion so far and his first couple of lines just about sums up my feelings on the matter and the majority of feelings of other people on the other board as well i think.

The SP has already fallen 2p from when the results came out, (only 2 days) how much further is it going to fall? as i dont expect to hear anything of any interest from the company for another 6 months now until interims going on past experiences.

ww

kimoldfield - 13 Mar 2008 14:24 - 2718 of 2787

Holding a small residual number of shares in the hope that some day the directors will be kicked out and replaced by a Board that has at least a small amount of regard for PIs, but yes, pretty disgusted with DGT to be truthful.

EWRobson - 01 Apr 2008 21:31 - 2719 of 2787

What do you know? Results came out in a week when I was incommunicado and just visited the site as I thought they would be about now. I understand the disappointment, particularly the lack of movement in the sp. There are plus points though: (a) earning potentially significantly increased in both parts of the company; (b) appear to be weathering the financial storm; (c) a decent yield.

We probably have to accept that DGT is no longer a high short-term growth potential situation but one to tuck away. Once they establish a pattern of increasing the yied (not difficut because earnings cut by one-time charges) then their rating should be upgraded. Small finance companies are right out of fashion at the moment. But staff are becoming significant shareholders themselves and will wnt to see the sp progress.

EWRobson - 02 Apr 2008 21:26 - 2720 of 2787

I expect every one has lost interest! I have come to the conclusion that this is a good time to go into DGT and not just for the short-term although perhaps being patient for up to a year. Its very significant, I blieve, that earning capacity has increased by a third, based on recruitment. Why? Because, whilst the market is meandering along, competitors have dropped away giving DGT a significant opportuntiy. Current year has started well. Even if there is not a rise in profits this year, or a relatively small one, we know that some costs will not recur. So a dividend increase, say to 1.5p per share, should be on. Yet yield is 9% now. Has to be a buy with a one year price target of 25p.

Eric

EWRobson - 03 Apr 2008 20:24 - 2721 of 2787

I seem to be left here on my own. I need my doggy friend for company even if he just want to growl at the company.

maggiebt4 - 03 Apr 2008 20:32 - 2722 of 2787

Hi EW not alone but afraid not as good as the doggy. Have not posted before as I probably broadly agree with your sentiments. What I bought into as a company about to go places has sadly disappointed but I still think, given time and a few less bonuses, this could still come good. Have very small holding now so will tuck away and wait and see. Enjoy reading your thoughts and comments so keep writing.

kimoldfield - 03 Apr 2008 21:51 - 2723 of 2787

Also here, but fairly speechless about DGT at the moment! Agree that there may be something to come out of it ultimately. I'm being too impatient maybe?

stockdog - 04 Apr 2008 10:35 - 2724 of 2787

hi Eric and other faithful. still fully in, in a somewhat dogged way. I think there is a real problem of imbalance in the share of spoils between management and shareholders of a basically nice little earner doing very much everything right at the operational level. On another thread I raised issues I hope someone will ask at today's AGM I can't get to, like:-

is TR as chair and CEO with only one weak non-exec best practice?

who runs the remuneration committee?

how many 500k's p.a. has TR and others earned plus share options galore whilst shareholder value has failed to reflect equivalent results?

still, 9.75% net of basic tax div. yield is better than a deposit account even if over time (2-3 years) we only get back to 14p (my break even). I do believe that 1p div can be at least maintained if not increased very much this year. one cannot ignore the basic market ambience and not only flight from small caps to big/cash, but no doubt large margin calls from some bigger players to cover losses on sub-prime and other erstwhile over-promoted hedge funds. a la W. Buffet, would I like to own the whole of DGT whilst it continues to generate profit/cash? - you bet, so I am happy to own a small share of it.

would like to see SP turn a corner though

EWRobson - 04 Apr 2008 13:07 - 2725 of 2787

At least I achieved something - some activity on the thread: wise thoughts from our dogged friend and a first-timer from Maggie. Welcome to Maggie and keep holding!

Your questions are good ones, sd, so we can hope that they are asked. There was evidence in the last report that they were listening. Whilst I accept that there is an imbalance between return to shareholders and staff remuneration, it may be that they are not far out. Note: (a) Rawlinson and key staff are significant shareholders - not looking for dividend income but certainly looking for capital growth in the medium-term; (b) vital that they are able to attract and keep key players; (c) performance in a difficult market reflects, I believe, the quality of their staff. A big plus is that they are using the difficult times to strengthen their position in the market and should emerge much stronger when the financial recovery happens, as surely it will. I think the 9.75% yeild is safe and should be increased even without a market recovery. OK, we may need to wait a year or two for the real movement, but I will sit on what I have and add to the holding as I have funds available. Like you, Kim, I do find being patient difficult so I will be tucking the shares away in my wife's account - I don't have accounts yet for the dogs!

Eric

canary9 - 04 Apr 2008 15:27 - 2726 of 2787

Eric, I'm still holding ......can't get a better Dividend even with the banks! In fact topped up again today @ 10.5p from gains elsewhere. They were higher than this when they were losing money! Chancellor did not do AIM shares any favours when he changed the CGT rules.

stockdog - 04 Apr 2008 18:48 - 2727 of 2787

Eric
" Note: (a) Rawlinson and key staff are significant shareholders"
Yes, but he only paid less than 50k for them, the rest are freebie options etc - compared to 500k pa in salary - who cares about value of shares you haven't paid much for when you earn this kind of money?

Sorry, getting a little bored with this bone. I guess there's some marrow in there somewhere, but damned if I can get my tongue to it.

ptholden - 04 Apr 2008 18:53 - 2728 of 2787

I'm surprised you guys haven't recognised that DGT has become a cash cow for TR and his close circle, far too much of the profits line their pockets rather than the shareholders. IMHO that is the sole reason for the lacklustre performance in the SP. TR isn't bothered about the sharholders as long as he is 'earning' half a mil each year. Quite frankly I think the situation is scandalous, but that seems to be how most quoted outfits work.

stockdog - 04 Apr 2008 18:55 - 2729 of 2787

Sorry, I take it all back - at the AGM they've changed the names of the two operating subsidiaries - that should do it - 1 by Xmas!

EWRobson - 04 Apr 2008 21:52 - 2730 of 2787

Not only stockdog but my old mate Peter! I'm like a dog with two bones!

Having operated in the consulting field, IT though not financial services, the only thing that is really out of line is that they are quoted at all. The reason why they are quoted is solely, I suspect, because they are offering services to the AIM market and thus really need to be on the AIM market themselves. You are probably both on the mark in saying that they are really operating as ig they did not have shareholders. My point, really to Rawlinson, is that it would be better for marketing their services to the AIM market if the share performance was better than it is. The solution is in their own hands: (a) improved return to investors, just a moderate realignment of salary to earnings per share; (b) promotional awareness to the market and their shareholders.

Having said that, I still think that this will be a little gold mine in future - os overgrowth continues to remind us in his preamble. I wonder if he has found himself again yet?

Eric

stockdog - 07 Apr 2008 17:49 - 2731 of 2787

What no one at the AGM on Friday? Give a dog a bone someone, please.
Register now or login to post to this thread.