Ive had these on the watch list for a few weeks now and the company seems to be getting a lot of Institutional Interest.

Its basically an asset based lender to smaller companys and carrys out a similar business to that of the big clearing banks, but as the economy gets tighter and bank lending gets more difficult to secure customers are turning to this Northern based company as an alternative.

Description Of Business.

Davenham is a leading, independent asset based lender to the UK SME sector.

The business was founded in 1991 in Manchester from where its core operations
are run. In recent years, Davenham has begun to expand and it now also operates
from offices in Leeds, Birmingham, Liverpool and Newcastle.

Davenham provides lending solutions designed to meet the financing needs of UK
SMEs - typically involving loans of between 10,000 and 3 million. The
Directors believe this is a profitable and attractive market place that is not
adequately serviced by mainstream lenders, which tend to adopt a formulaic
approach to lending decisions. Davenham has a diverse loan portfolio, with its
lending activities organised into three divisions: property finance, asset
finance and trade finance.

Davenham enjoys strong client relationships reflecting high levels of customer
service and tailored financing packages. The Directors believe that Davenham's
ability to form a commercial view and reach lending decisions quickly underpins
premium rates and high levels of repeat business. New clients are typically
sourced through introductions from existing clients, direct approaches and a
network including mainstream lenders, finance brokers, accountancy firms and
other professionals.

Davenham has a strong financial record both in terms of revenue growth and
profitability and has consistently achieved a gross return on loan portfolio of
circa 20 per cent. The Directors believe this results from Davenham's position
as a leading lender in a profitable and niche market place in which the
competition is fragmented.

Davenham is funded by a group of banks led by The Royal Bank of Scotland plc and
has a facility of 175 million, which the Directors believe is sufficient for
Davenham's current requirements.

The Placing:

Davenham, a leading independent asset based lender to the UK SME
sector, announces completion of its admission to AIM and that trading in its
ordinary shares commenced at 8.00am today.

Panmure Gordon, the Company's broker, has placed 10.9 million new
ordinary shares on behalf of the Company raising approximately 27.7 million
before expenses, and also placed approximately 6.7 million existing ordinary
shares for approximately 16.9 million on behalf of selling shareholders.

Approximately 17.2 million of the proceeds of the issue of new
ordinary shares will be used to redeem certain loan notes and mezzanine debt.
The balance of 10.5 million will be used to increase the capital base of
Davenham and to pay for the expenses of the flotation.

Davenham will be included in the Speciality and Other Finance sector
and will have an EPIC code of DAV.L.

Hawkpoint is the nominated adviser and financial adviser to Davenham
and Panmure Gordon is broker.

Dunedin and Indigo backed the buyout of Davenham in 2000 and have
supported the Company through to a successful flotation. They will remain
supportive shareholders.

The placing took place at 254p.

Director Speak.

David Coates, Chief Executive said:

'We are delighted by the positive response to the placing and the completion of
our admission to trading on AIM. I am pleased to welcome our new institutional
investors as shareholders of Davenham.

'We are well positioned to capitalise on the attractive growth opportunities in
our market place and we believe the flotation will raise our profile and support
future growth by strengthening our ability to lend, expand into the Midlands and
the South of the UK and fund selective acquisitions.'

I see from the Brokers forecasts that the Pospective P/E is approx 10 falling the year after. Might be rewarding to get in at this early stage.

DYOR.

Cheers GF.

Closed my position now fully in these at a very nice profit and may return when we have further bolt ons.

Time to go back in???????????????????????????.

I remember a lot of us made a packet here last time.

I think its tempting on the forward P/E, derd cheap.........

From Growth Company Investor site.....

Davenham - BUY
Companies: DAV
08/01/2007

Asset-based lender Davenham debuted on AIM at 254p in late 2005 and was subsequently tipped by Growth Company Investor at 365.5p. After rising to 388.5p, the shares fell back in the first half of 2006, before staging a recovery in the second half.

Having met with charismatic chief executive David Coates, we still see exciting times ahead for the group, which lends to businesses with annual sales of between 1m and 25m, a niche market inadequately serviced by banks (argues Coates), and one with vast credit line entry barriers.

In the past few months Davenham has announced a dramatic increase in its funding lines to 300m with an enlarged syndicate of banks and reported that its loan portfolio reached a record 215m in November.

Coates sees bags of growth to gun for, with roughly 80,000 UK businesses falling within the Davenham lending sweet spot and this number growing by 4% each year. Superior earnings quality reflects a relationship-based approach to lending, versus the rigid scorecard model employed by rivals in the market.

Davenham has a reassuringly diversified portfolio organised into property finance, asset finance and trade finance divisions and its geographic expansion is ongoing, with Coates weighing up acquisitive deals in a fragmented market.

Last year to June, Davenham delivered pre-tax profits of 8.6m, 29.4p of earnings and a 7.7p dividend, numbers forecast to grow to 12.4m and 32.8p this year, with dividends nearly doubling to 14.8p. As such, Davenham trades on a modest forward multiple of 10.2, an unwarranted discount to the sector, with a prospective yield of 4.4%. Buy.

James Crux
Market cap: 87.59m
PE Forecast: 10.2
Share price: 336p

No space for Davenham
08.01.07
Peter Temple

It's been a rather better month for the portfolio in absolute terms, although our selections continue to lag the recent strong market.

The portfolio is now up 110% since inception (up 105.7% since inception last time round), while the FTSE is up 21.3% over the same period (up 17%

last time round). An interim dividend from Kelda (KEL), takes our cash balances up to 771.

On a total return basis, including the effect of dividends, the comparative index performance is a rise of 43%, which means that the portfolio is still well ahead of the game. But its record over all but the longest timescale continues to be disappointing. Strong equity markets do not necessarily make for good performance from income stocks.

Having said that I believe interest rates - and therefore gilt yields (now over 5% in many cases) - are approaching a peak. Once that peak is reached and they begin to fall, we can expect better performance from higher yielding stocks.

Experience has taught me not to sell a stock unless I have good reason, and although the portfolio's performance is flat, individual constituents have been sufficiently well behaved not to warrant ejection. I am not prepared to sell out of the portfolio's gilt edge stock (it is in the portfolio to provide a base level of income).

Equally, Johnson Service (JSG), which came close to forfeiting its place last time, has perked up slightly and provided some welcome corporate news in the shape of the disposal of a loss-making division. Johnson Hospitality Services made a loss of 2.3 million in the last full year and the sale will bring in 800,000 in cash. Not a great price, but satisfactory for a loss-making business. More to the point, it demonstrates that management is serious about restructuring.


Davenham

In the absence of a stock to sell, I am still struggling to find a place for a new constituent. This company, Davenham (DAV), is a Manchester-based lender to small- and medium-sized businesses and typically lends against the security of property, physical goods, or debtors.

The group has been established for a number of years and, rather than adopt a formulaic credit scoring approach to lending, it is more focused on appraising individuals - typically small-scale entrepreneurs who want finance for specific projects. It actively monitors its portfolio on a weekly basis in order to minimise bad debts, and so far the record on this score has been good. Staff are incentivised, many hold shares in the business themselves, and there is an impressive roster of institutional shareholders backing the company.


Figures

Davenham has built up an enviable record of profit growth in recent years and, of particular interest to this portfolio, currently stands on a prospective yield of around 4.4%. This compares with the yield on Lloyds Bank of 5.9%, but the difference between the two is arguably that Davenham has better growth prospects.

If we had enough cash to spare or a stock to sell I would have no hesitation in adding it to the portfolio. As it is, it has to remain our 'first reserve' for the time being - until there are some developments elsewhere in the portfolio. I also have reservations about adding to our exposure in the financials area at present, and for the moment Lloyds TSB (LLOY) looks to be on an upward trend so selling or reducing that better yielding holding isn't really an option.

I have no doubt that at some stage in the future this impasse will be broken in some way, but for the time being we have to continue with the existing list of portfolio constituents and not make any additions or deletions.

Davenham sees H1 in line with forecast; says 'confident' of FY
AFX


LONDON (AFX) - Davenham Group PLC said its first-half trading has been in line with expectations and added it is 'confident' of the year ahead with new business opportunities remaining 'firm'.

The asset based lender to the UK small and medium enterprises (SME) sector said the increase in its banking facilities to 300 mln stg, as reported in December, will 'underpin solid growth' in the portfolio over the next two to three years.

Davenham said it will announce its interim results on Feb 26.

newsdesk@afxnews.com

tsk/nes

Sound solid results...

Davenham H1 pretax profit rises to 5.4 mln stg; interim dividend of 4.45 pence
AFX


LONDON (AFX) - Davenham Group PLC reported a higher pretax profit for the first half to Dec 31, in line with its expectations, adding that the current year is progressing well prompting it to declare a maiden interim dividend of 4.45 pence.

The asset based lender to the UK small and medium enterprises sector posted a pretax profit of 5.43 mln stg, up from 2.73 mln stg earlier. Turnover rose 15 pct to 18.33 mln stg from 15.99 mln stg last time.

'The continuing investment in organisational capability together with the successful roll out of our strategy gives management confidence in its ability to further expand the business and increase shareholder value,'chief executive David Coates said in a statement.

newsdesk@afxnews.com

pmi/rar

From GCI...

Davenham - BUY
Companies: DAV
28/02/2007

Asset-based lender Davenham originally backed by Growth Company Investor at 365.5p delivered a 14% rise in adjusted pre-tax profits for the half to December and organic growth prospects remain strong. Profits growth from 4.9m to 5.6m, on turnover lifted 15% to 18.3m, drove earnings more than 50% higher to 14.87p, allowing for a maiden interim dividend of 4.45p.

The Manchester-based group, which typically loans between 10,000 and 4.5m to SME ventures inadequately serviced by the banks, reported 14% loan book growth to a record 214m, boosted by a strong turn from the new London office and the introduction of two new property finance lending products buy-to-let mortgages and commercial property mortgages.

The swift success of the London office proved a particular highlight, with London breaking even in six months compared with two to three years at other offices. It shows the Davenham proposition is exportable, remarked chief executive David Coates, and were simply getting better at what we do.

Yet to complete a first acquisition on AIM, Coates remains on the lookout for deals nonetheless, and continues to walk away from unrealistic vendors rather than overpay and destroy value. Weve got a very good core business so we can afford to be careful, he told GCI. This is reassuring and the organic growth opportunity remains great, with Coates continuing to expand the business beyond its North West of England base, with the South West, East Anglia and Scotland under consideration.

Furthermore, the development of new loan products, as well as generating new business from underwriting larger loans, should continue to drive the bottom line the recent large increase in banking facilities to 300m through a successful refinancing should underpin portfolio growth over the next two to three years. For the full year, analysts are looking for a leap in profits to 12.4m (8.6m) and growth in earnings to 32.8p (29.4p), placing the shares on a lowly rating of 10 times. Given the groups terrific growth prospects and solid yield appeal, thats too low. A re-rating is due and we remain fans. Buy.

James Crux
Market cap: 86.37m
PE Forecast: 10
Share price: 332.5p

TA looks interesting....

Momentum roll continues.

Davenham Group PLC
18 May 2007


For Immediate Release Friday, 18 May 2007

Davenham Group plc

DIRECTORATE CHANGE

The board of Davenham Group plc ('Davenham' or the 'Group'), a leading asset
based lender to the UK SME sector, announces that Steven Marsh has resigned as a
director of the Group and will be leaving the Group in early 2008 to develop
other business interests.

It is anticipated that upon Steve's departure in early 2008 his responsibilities
as Managing Director will be absorbed by David Coates, CEO, and David Bowles,
Risk Director.

Commenting on the news, David Coates, CEO said:

'Steve has given 16 years' service to Davenham, helping to build it into the
success it is today as a leading, national, asset based lender to SMEs. Steve
will work closely with us until early 2008 to ensure a smooth transition of his
responsibilities. We wish him every success in his subsequent endeavours.'

Steve Marsh, Managing Director, said:

'I have been with Davenham since it was founded in 1991, and seen it through
significant changes in ownership, scale and strategy as it has grown from a
small, local operation into an AIM-listed, national company with offices in
Manchester, Leeds, Birmingham, Liverpool, Newcastle and London. I am proud of
what we have achieved, and wish the Group every success in the future.'

For further information, please contact:
www.davenham.co.uk

Bolt on....

London Scottish Bank sells Manor Credit to Davenham; H1 pretax down UPDATE
AFX


(adds profits of Robinson Way, adds LSB expectation of FY profits for year)

LONDON (Thomson Financial) - London Scottish Bank PLC, the UK specialist lender, said that it has sold the loan book and assets of its Manor Credit Leasing business to Davenham Group PLC for 25.1 mln stg.

Manor Credit, which is a commercial leasing and hire purchase business specialising in providing asset backed finance for commercial vehicles and construction equipment, had pretax profits in the first six months of this financial year of 464,000 stg.

In a separate statement, LSB said that underlying first half pretax profits before the write-off of its broking business for the year to end-April fell to 8 mln stg from 8.2 mln stg this time last year.

After writing off the goodwill of 12.5 mln stg, the group recorded a pretax loss of 4.4 mln stg, down from 8.2 mln stg in the same period last year.

The board of LSB said that is also recommending an interim dividend of 2.050 pence per share, up from 1.965 pence per share this time last year.

LSB added that it expects underlying full year profits to be moderately above those of last year.

Profits at Robinson Way, its debt collection business, grew nearly 31 pct as result of a successful growth in debt portfolios. Profits grew to 6.1 mln stg, up from 4.7 mln stg in the corresponding period.











alexander.ferguson@thomson.com

af/jfr/af/jlc

Davenham Group sees FY in line with expectations
AFX


LONDON (Thomson Financial) - Davenham Group PLC said it sees full-year results in line with expectations.

The asset based lender, in a trading update, said it is reviewing acquisition opportunities in line with its strategy.

The AIM-listed company said it believes it is well positioned to take advantage of current trading conditions in the next twelve months.

The company will announce its preliminary full-year results on Sept 10.