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

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.

hlyeo98 - 07 Apr 2008 23:28 - 2732 of 2787

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

kimoldfield - 08 Apr 2008 08:19 - 2733 of 2787

That chart mirrors my regard for DGT :o)

kimoldfield - 08 Apr 2008 08:19 - 2734 of 2787

.

kimoldfield - 08 Apr 2008 10:20 - 2735 of 2787

DGT really should have got this right the first time! My opinion remains unchanged, although I am a little happier following this:-

CORRECTION - ISSUE OF EQUITY AND PDMR SHAREHOLDING

This announcement corrects that made on 7 April 2008 at 12 noon. The 1,958,333
new ordinary shares of 7.5p each were issued at a price of 12p per share and
not 10.25p per share as previously stated. All other information set out in the
original announcement remains unchanged.

stockdog - 08 Apr 2008 23:32 - 2736 of 2787

Actually it should be 12.5p - if you read the RNS's carefully they agreed an amount of money (golden hello) to be settled in free issue shares at closing mid-price March 14 = 12.5p each over time. Still wrong IMHO. Perhaps that's what you get when one man is Exec Chairman, CEO, FD and Co Sec - busy old life to get the details right all the time!

stockdog - 09 Apr 2008 00:11 - 2737 of 2787

I just noticed 2 trades from Friday of 1m shares each at 9.50 and 9.51 - looks like a bed and spouse to me, or bed and SIPP to crystalise a tax loss (hardly a gain) for tax year.

Then there is today's buy of 50,000 at 10.80p - director? share buy back? PI?



stockdog - 03 May 2008 11:24 - 2738 of 2787

Rawli from the other board has posted the following link to Equity Development's March note.

http://www.cityfin.co.uk/IM/dowgate-research08.pdf

Here are donaferente's comments, reprinted with permission, also from the same place.

More comforting than revelatory. Eq Dev are paid by companies they write about I believe, and some phraseology seems to fall rather to undigested from TR's lips - e.g. "very selective" recruitment.

They put a fine gloss on "exceptional items" included in ordinary costs and admit that 2008 is anybody's guess.

They markedly do not repeat their August '07 21p SP target - merely refer to it - a subtle sleight of pen I feel.

The one underlying positive is their quite strong statement that the dividend will be comfortably capable of increase, even at low end of forecasts. And the yield is higher than the PE. So we have a value business going forward, if not a value share just yet - time to buy more? Assuming dividend increase of about 10% to 1.1p, that's a forward yield of 10% on a business unlikely to go bust with good management (operationally, even though one might argue with their allocation of profts!) with a decent interest in the SP. That's almost double what you can get in a bank with your money and tax free in a SIPP. Who knows - one day the SP might rise to fair value too. So content to hold for another year.

kimoldfield - 03 May 2008 23:43 - 2739 of 2787

Cheers SD: buttocks clenched accordingly! ;o)

snakey - 04 May 2008 21:05 - 2740 of 2787

with the number od new clients they have attracted, which isn`t easily discernible from their website plus potenytial rights issues from a numbe rof these plus new business, I really do believe that a divi of 1.5p for the next full year is likely, which will, not only supplement the main guys` bonuses, as they all hold a lot of shares but keep us minions attracted without too many others having bought into the share. My result was 1200 at year end which I am more than happy with even if the s/p don`t go higher, as they are all tucked away for the eventual realisation of Dowgate and I am sure that these will attain a level of 40 - 50p over next couple of years unless there is a buy out, which has been one of my concerns for awhile.
There is little to worry about by putting a few k into this one, I`m positively sure.
good luck whichever ways you guys go
snakey

snakey - 04 May 2008 21:07 - 2741 of 2787

p.s.
I am also into IMG at present which I think has some good news and good performance to report soon.

EWRobson - 05 May 2008 21:26 - 2742 of 2787

sd I don't think they would bother with 10%; they might as well do 1.5p as snakey suggests. That should bring the sp to 15p even if just to maintain the yield at 10%. Pretty well a one-way bet.
Eric
Register now or login to post to this thread.