The X-Factor, that magical 'other' we are all looking for in our shares?
Well, Plus:CEGO can certainly claim 'an' X-Factor:
http://www.peterbrightman.com/press.htm

Whether it can claim the other X-Factor only time will tell. It came to market as the result of a reverse takeover by JPG investments, a small St Helen's Capital cash shell.

Creative describes itself as:
'Creative facilitates the staging of concerts featuring artists such as Sir Elton John, REM, Rod Stewart, Phil Collins and Jose Carreras at large stadia, including football grounds and other international venues; Creative usually acts on behalf of venues for which the staging of musical and theatrical events is a non-core activity and procures the attendance of the artist, for which it receives a fee. Creative also facilitates artists' attendance at corporate or private events, where Creative acts as the link between the artist and the event planner.'

They have also acquired an agency which provides venues for the X-Factor among others. This is a small and deeply fragmented sector and the opportunities for acquisitions abound, hence the comment with results:

'We will continue to build our core business, which will benefit substantially
in 2007 from a full year's contribution from the Agency business. In addition,
our intention is to keep building on the strengths of the Group both
organically and by acquisition. To this end, we have identified a number of
potential acquisitions with the aim of generating synergies both within the
sectors in which Creative already operates and also cross-sector, allowing for
significantly enhanced revenue generation.'

But like the business or not, this is no ordinary 2.5 million market cap company.

For one it has just announced some very promising looking results, and the very fact it is profitable is an encouraging start for a company of its size! Just a selection of the headlines:

'* Turnover up 137% to GBP3,756,270 (2005: GBP1,583,221)
* Pre-tax profits up 164% to GBP260,954 (2005: GBP98,699)
* Events Division facilitating live events in the UK, Damascus, Moscow,
Kiev, Beirut and Athens working with artists including George Michael,
Enrique Iglesias, Bryan Adams and Shakira
* New Agency Division working with high profile artists including those in
the X-Factor show and tour, Lemar and Beverley Knight
* Recent acquisition, Create Music Limited, significantly increasing
turnover
* Further potential acquisitions identified

That it has added glamour there is also no doubt, but that's the rub - it would be easy to get carried away by the fact it is a glam (some might say 'Sexy') stock.

I think we need to pause right here and take a closer look - is behind the glamour and the headlines, there actually something that is actually full of investment potential.

Let me say at once this is Plus-Quoted, so it can be illiquid and is certainly not a trading stock. It carries risks and is not for many portfolios. Some brokers will only deal it on the phone (Self-Trade do it online) and though the nominal spread is very off-putting, online it was 2.25p - 2.55p on Friday. However if they can get to 10p in three years, which i believe to be possible, (reasons later) perhaps all is not lost. I managed to buy 150k shares earlier this week on the phone inside spread despite an online quote of only 25,000 shares

I'd say it has to be held for at the very least three years - five to ten might be more realistic. It's also a penny share in the true senses, risky and at 2.375p with a small market cap.

There are just over 107 million shares in issue plus 12 million warrants I can find.

The headline numbers are certainly impressive, actually more so because the year end meant this was a 17 month reporting period, the first six of which resulted in a loss of 98k as the seasonally weak autumn months kicked in (a lot has been done to address this - more anon).

What that meant of course was that the last 11 months netted a post tax profit of over 270k, putting it on a single figure p/e, despite the pretty extraordinary growth that has been happening.

The headline numbers as ever don't answer all the questions. Cashflow was slightly negative at 2.9 million in to 3.1 million out and trade receiveables at just over 1 million caught the eye.

I've only had the briefest word about this with management but was somewhat reassured - 'as we expand it is to some extent the 'nature of the beast' that CEGO makes upfront payments to venues on the artists' behalf, and receives payments at a later date,' 'but i hope you'll agree' he added 'our client list is fairly blue-chip and payments do arrive'!

It's certainly blue-chip. I have no doubt about that.

And here is the reason why i am prepared to back this company, for all the questions, for all the warts and all i have so far mentioned. You simply can't buy management in a small company imvho of this stunning sort of quality.

Peter Brightman, Company CEO, has over twenty five years' experience across an exceptionally wide field of the entertainment industry.

Among the innumerable great artists and companies he has personally presented or contracted for clients are Sir Elton John, Jessye Norman, The Bolshoi Opera and Ballet, the Kirov Opera with Valery Gergiev, the Kirov Ballet, Placido Domingo, Ella Fitzgerald, the St. Petersburg Philharmonic Orchestra, the English National Opera, the Royal National Theatre, the Royal Ballet, Dame Kiri Te Kanawa, the Count Basie Orchestra, STOMP, Tito Puento, Celia Cruz, Oscar Peterson, Michael Jackson, Tom Waits, Joe Cocker......'

'These presentations have embraced such venues and organisations as The Royal Opera House Covent Garden, The Kennedy Centre Washington DC, the Metropolitan Opera House New York, Carnegie Hall and Lincoln Center New York, The Dorothy Chandler Pavilion, Pantages Theatre and Shrine Auditorium Los Angeles, The London Coliseum, Royal Festival Hall, Royal Albert Hall, Palladium and Dominion Theatres, The Barbican Concert Hall, The Bolshoi Theatre Moscow.....'

Sharon Kim Dion:
'In the summer 2001 Sharon Kim-Dion was appointed Vice President and Artist Manager of Columbia Artists Management in New York during her three year tenure Sharon represented and contracted some of the greatest names in the performing arts as well negotiating recording contracts with illustrious companies such as Deutsche Grammophon, Sony/BMG and Universal.......'

Paul Fitzgerald has been involved in the music industry since 1990. He joined
Concorde International Artists Ltd, the respected artists booking agency, in
1993 and became a director in 1998. He has worked with a wide range of high
profile acts including Steps, Beverley Knight, Lemar, The Prodigy and Russell
Watson and is now bringing with him his whole roster of around 20 artists,
including Simon Cowell's the X-Factor and his new project, My Band, which will
be launched in January 2007.

'Mr. Fitzgerald brings with him a highly experienced team, which has worked with
him for over five years. Together, they provide the skills to assist Creative
Entertainment in pursuing its aggressive growth strategy.....'

Non-Exec:
'Mr Paul Burger has had a career in the music industry since 1977, including
various directorship positions internationally at Sony Music. Latterly, from
2000-2003 Paul was President of Sony Music Europe, where he presided over the
most successful chart and market share performance ever and established careers
for new and existing artists from all over Europe.......'

It is perhaps no wonder that Guiness Peat have a 10%+ stake in Plus:CEGO.

And the company seems intent on 'wooing' others in the City:
'We have continued to expand the shareholder base and I am pleased to report
that the equity issued during the year to finance acquisitions and expansion
was placed with a number of institutional investors. This not only
strengthened our balance sheet but also assisted in building relationships with
these investors to assist in the long-term development plans of the Group.......'

The majority of placings have so far been at above the current market price (the reverse involved shares at 4p) and much positive has happened since.

Clearly the company's growth to date has been very exciting but risks remain. The balance sheet is not perfect (is any?!) but it shows signs of strengthening, acquisitions will bring dilution of or fundraisings and demand for concerts and productions might fall but the overall signs can only be said to be very encouraging. The agency business has relieved the seasonal nature of the balance sheet, which initially had been over-dependent on sports venues for concerts and other productions during the summer months.

Some people might use the 164% rise as a growth model. I think that would be, at best, mischievous, but even if they grow at 100%, 50% and 25% in the next three years, (still ambitious but I genuinely believe from my earlier chats with management very possible, events stood at 50 for the year reported, now 80 already for 2007 and we are only in May - while the Agency which provided only a three month contribution, will this time contribute a full year) a 1 million profit would be close in three years.

If this management don't know and understand the business they are in, then I just don't know who would. The challenge will be to continue to build the balance sheet and so far the signs to me look very positive.
http://www.plusmarketsgroup.com/list.shtml?&Group=Quoted&a2z=C

Cheers mate.

'Knackered......'
That's how CEO Peter Brightman described himself to me when I spoke to him earlier today; I was more than a little relieved to hear his Monday morning affliction was down to hard work on behalf of the company, though whether he partook of a 'spot or two of the other' he wasn't saying!
'We've done Jose Carreras and Elton over the weekend.....'
A quick check on the website and neither was among the 80 events listed for 2007
http://www.peterbrightman.com


They did around 50 events last year, so that's 60% up and we are only in June, I mentally noted.

I found him affable and very welcoming. He invited me to his London office and emphasised I was 'part of the team'.
OK ok, i'm a bit cynical these days and such things will be seen as 'soundbytes' by many. But he didn't have to say it.

'It's your company as much as mine' he insisted more than once (well actually, Peter, about 35% less but there you go, he was in rollicking form now and I wasn't going to interrupt - possibly still hyper from the weekend I wondered, but who can blame him - what a fantastic job he must have!). And he had made it in on Monday morning, as well as being prepared to chat to a lowly shareholder, having spent the weekend no doubt sharing time -hobnobbing - with some of the world's greatest artists.

By now I was feeling rather humbled as you might imagine. What a comedown for him, yet here he was 'giving it some'!

'We've lots of plans, and keeping the lid on not doing too many things at once is in itself a challenge' he said.

I mentioned I was phoning from Slovenia (A word in, blimey, was the man sipping a - black, I wondered, - coffee? 'ah Jim' (I like that, he had remembered my name for four minutes, something many CEOs I have found unable to achieve in the past), 'we've got a series of concerts in Serbia later this year, and we are looking at all the countries in that part of the world, it's a real growth area for us I think'.

A subsequent check on the website and they aren't listed either, so that's well over 80 then.......

Anyway to cut a long story, as the conversation continued (less a monologue now, was the man flagging, surely not!) I got the feeling further 'activity' before long both in acquisition terms and possibly even a move to AIM will not be long and he mentioned the Agency business, which contributed just three months profits to the last figures, as being 'incredibly busy'.

Provisional date for AGM is 28th July but will be announced when confirmed, on Plus.

I even cheekily suggested a couple of concert tickets annually for shareholders - he thought it sounded very interesting!! But you find yourself suspecting he finds most of life 'interesting', or more. Were I to go to the AGM I'd plant that particular seed further though!

I hope to speak with Peter Frohlich in the near future as 'he is the numbers man', but to recap very briefly from my first post, the last eleven months of the 17 month reporting period produced some very promising numbers imho, with post tax profit of around 270k, the market cap is under 3 million and management have top level experience at Columbia and Sony (more in earlier post).

In my humble this is a very interesting company still at an exciting growth stage and might be one anyone interested could track as it develops and hopefully flourishes.

Many questions more of course to be answered as the company develops, but his last comment was that if the company do any fundraisings he will make sure small shareholders are 'not left out'.

What amazed me as I put the phone down was that our conversation had lasted less than nine minutes, yet I felt confident and reassured and that the business was in the hands of 'the right sort of people'. Hands on people with a wealth of experience and the right sort of contacts.

A company I believe (from my admittedly biased point of view!) that is going to really go places, as long as the speed of growth can be managed astutely.

I hold.

New website under construction: www.ceg-events.com