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.

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.