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Dowgate Capital - Capitalising on the booming AIM market (DGT)
overgrowth
- 09 Feb 2005 20:52
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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 |
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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. |
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stockdog
- 19 Apr 2005 14:07
- 378 of 2787
SD
overgrowth
- 19 Apr 2005 14:19
- 379 of 2787
1) Results are pretty good considering the previous warning - particularly as most of it was in payoffs.
2) The current board saw the guys leaving as not adding much value to the company as a whole and last year positively disrupting things - best to get shut.
3) We'll probably get plenty of sellers thinking this is bad news and then lots of buyers when they realise it's actually good news.
Unfortunately, 3) hasn't worked for them because hardly anyone's sold - however they must now acknowledge that as the results sink in more and more buyers will be interested particularly if the price and spread are right.
All my amateur psycholgy ramblings of course. Probably what really happened is "Oh I see CFP's results are out"...."Hmmm not much trading"..."Let's tinker with the limits and see what we can drag out".
stockdog
- 19 Apr 2005 14:25
- 380 of 2787
SD
slmchow - 19 Apr 2005 14:27 - 381 of 2787
Growth Dabbler - 19 Apr'05 - 13:40 - 7174 of 7191
Results totally as expected to me guys and as carchase says - now all the bad news is out of the way - the only way for the sp to go from here is up.
schow - In the results it says that Net assets at 30th June were 914,000 and at 31st December they were 607,000 largely as a result of exceptional costs. I take that to mean that the payoffs cost the company in the region of 300K.
As at the end of December I was looking at possible trading loss due to non-materialising deals in Q4 2004 of around 125K.
Given that the posted loss is 375K, then if we take out the cash spent on non-recurring costs (307K), the trading loss was only 68K - pretty good going for a bad year!
This indicates that given the work completed so far in 2005 and the current prospective deal list (which TR mentions) that CFP should be easily posting a decent profit for 2005.
Looks like the price has dipped nicely today providing an ideal opportunity for for any toppers-up to take advantage - I have a feeling that when the results fully sink in, that buyers will be paying a lot more in the near future.
carchase - the AGM date is mentioned in the results - 25th May.
stockdog
- 19 Apr 2005 14:30
- 382 of 2787
Does this work as a theory?
SD
EWRobson
- 19 Apr 2005 14:33
- 383 of 2787
Thanks for the analysis which looks very sound. I wonder whether the cost porfile is overstated: 'in addition to the costs of running the holding company' (presumably, Shaw and Barclay) appears to state that these costs have been eliminated; non-recurring one off costs includes compensation for loss of office and legal fees in relation to former directors and bad debt provisions; 'in the current year, following a detailed review, overhead costs have been considerably reduced whilst maintaining and streamlining the oeprational capability of the business'. So we should at least be back to the figure of 600 per half year of the last interims which , of course, included Barclay and Shaw, and could be nearer 1 million.
Rawlinson is obviously keen not to offer any hostages to fortune after the experience of late last year. However, I liked a couple of comments: first, the focus on achieving profitability before committing to growth; second, 'sufficient transactions are likely to be completed out of our work in progress pool to acheive our fee targets over the nest few months'. Linking these, the targets are likely to take the company into profitability, perhaps in the third quarter, and these can achieved with work currently in progress.
I hope we get a trading review in July; there was one in December but not July last year. Finally, sd is a clever dog and should have treats; can moneyplus perhaps oblige!
Eric
overgrowth
- 19 Apr 2005 14:34
- 384 of 2787
stockdog
- 19 Apr 2005 14:47
- 385 of 2787
eric - I must say we're pretty consistent across these threads - I always seem to view my glass as about five eighths full, you usually see it just a tad rosier (or should that be rosr, or even riojaer?) at two thirds full, but we're both on the same side of halfway and looking up to the brim!
gross babble from the other board has got the right sentiment, inaccurately expressed, from a complete balls up of the figures. It is 116k better than s/he says.
The increase from 607k to 914k net assets/shareholders funds is due to the 439k fundraising less 132k deficits from P&L net of amortisation, depreciation and something else I can't quite lay my hands on. This has NOTHING to do with the adjusted operating result per se.
The costs of clearing out the old wood are quite clearly noted as approx 414k. So the overall outturn of 366k loss represents a profit of 48k on continuing activity.
QED SD
butane
- 19 Apr 2005 14:53
- 386 of 2787
moneyplus
- 19 Apr 2005 15:12
- 387 of 2787
stockdog
- 19 Apr 2005 15:14
- 388 of 2787
now, I'll just lie back and relax - ouch, mind that water, it's a bit hot. ah, that's better, conditioner, yes please - and, er, can you do that head-massage thingy with your fingers - oh my god that's it - excuse me the rest is censored.
Us dogs have feelings too you know.
SD
butane
- 19 Apr 2005 15:15
- 389 of 2787
CFP....Annual General Meeting
The Annual General Meeting of the Company will be held at the Offices of Field
Fisher Waterhouse, 35 Vine Street, London EC3N 2AA at 11am on Wednesday 25 May
2005.
Adacol - 19 Apr 2005 16:45 - 390 of 2787
I bought 556,000 at 0.35p showing as a sell.
butane
- 19 Apr 2005 17:02
- 391 of 2787
overgrowth
- 19 Apr 2005 17:12
- 392 of 2787
I think that the first sale went through at 0.35p and the rest went through at 0.33p apart from those above NMS which were penalised 3 ticks and had to sell at 0.30p.
All the rest were buys. The last trade at 300,000 looks like a limit order buy.
Just out of interest, to see how skewed the trades screen can make things look, I bunged the figures into a spreadsheet and came up with:
Buys: 2,425,537
Sells: 2,987,026
Which is pretty good for a day when there was an outside chance that the results could have been taken badly by the markets.
Volume overall was very low for a results day, which suggests that those who are in already are happy to hold on for the big gains to come during 2005, and that there was no nasty "surprise" element in the results.
Intandem are due to float on Friday which may well attract more investors to the potential of CFP.
I suspect that long term holders will also be topping up in the next few days (like yourself) though are either waiting for funds like SD or are waiting for evidence that the price has bottomed out (I think it has and will go up from here).
After the last sell of the day I noticed that the MMs put the offer back to 0.43p - with a bit of sustained buying pressure they're going to mark the price up very quickly.
EWRobson
- 19 Apr 2005 21:32
- 393 of 2787
stockdog: where does the 'quite clear 414K' come from? Can't see it myself: do you have to lie on the ground with your paws in the air? By the way, I thought the Lindemans Shiraz good this evening.
So, given that there was a small profit before exceptionals last year, and trading is good this year with obvious provisos re future deals, why the reticence in declaring it and why is break-even described as somthing in the future? The answer may lie in the fact that one quarter doesn't make a year as the company found out last year.
May not be much move until the AGM on 25th May which might tease out more projections. However, there is a very positive concealed scenario that could lead to positive professional comment and a run on the share. I think I ought to raise the ante to 1.5m shares to prove your manhood and/or womanhood!
Eric
overgrowth
- 19 Apr 2005 22:37
- 394 of 2787
Remember that GHW Group (an unlisted PLC) bought up 6.6% of the company in January.
Well, it just so happens that GHW are in exactly the same line of business as CFP - lots of scope for synergy there...
stockdog
- 19 Apr 2005 22:48
- 395 of 2787
Talking of Lindemanns Shiraz, I've just discovered a matching pair (you know how I like to invest in pairs) of Chilean origin Cono Sur a pinot noir and a viognier varietal - one of my favourite slightly perfumed grape - best example being the famous Condrieu (although some non-Condrieu can be a lo tmore reliable) - and he best thing about these two are they are at the bottom of the market - 3.49 a bottle - drink your heart out Robert Parker.
BTW, looking at what my small office costs to run in the W. End, adjusting it for 4 principles and 2 support staff and adding 50% for City location and style and higher basic earnings - I get to about ~800k op. costs - add non-exec directors and AIM listing requirements and you get nearer 1m, less than the 1.2m I did the numbers on. SO maybe the profit for 2005 could rise to as high as 650k or so, if they manage to perform on revenues as I suggest. Even if they don't earn so much, this lower overhead leaves a profit of 500k. With a market cap of 2.3m at today's prices, that's a paltry PE of 4.6 - double, treble or even quadruple it as you will, the only way is up.
SD
DFGO - 20 Apr 2005 00:52 - 396 of 2787
when the begin
stockdog
- 20 Apr 2005 01:08
- 397 of 2787
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