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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

taylormade - 20 Apr 2005 09:12 - 402 of 2787

Thanks for that OG.

overgrowth - 20 Apr 2005 09:30 - 403 of 2787

No probs.

As an example - the on-line limits right now are:

buy 1.5M @ 0.35p
sell 150k @ 0.33p

However the published spread is still showing as a hefy 0.33 - 0.40p (which could well be discouraging buyers).

This means that the first two trades for 100,000 and 50,000 were true sells, however the 208,038 reported as a sell was actually a buy.

stockdog - 20 Apr 2005 11:29 - 404 of 2787

Also the 43,000 (I assume) and the 280,739 (yours truly) trades at 0.35p were buys. Still not quite sure why so far inside the spread, but I'm not complaining at the price I just got!

SD

DFGO - 20 Apr 2005 13:11 - 405 of 2787

stockdog

Can you through some light on this please I can not remember correcting any of
your posts, and the post seems to have disappeared now

Growth Dabbler - 19 Apr'05 - 15:39 - 7197 of 7245


Have just noticed this comment from stockdog on the other board. It looks as though my previous calculations on the pay off costs could have been a bit out (I never said I was an accountant - where was DFGO to correct me...?)

"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."

So, without additional expenses incurred in 2004 rather than making a small loss of 68K, CFP would have actually made a small profit of 48K!!! despite all the deals which never came to light at the end of the year.

So, if they could make 48K trading profit in a "bad year" with expensive overheads like SB and JS, what are they going to make in what is looking like a very good year without the extra overhead burden of those two ?


stockdog - 20 Apr 2005 13:16 - 406 of 2787

DFGO - just read the words and the understanding will come.

SD

EWRobson - 20 Apr 2005 13:36 - 407 of 2787

sd is building up his stake again. He could well be sniffing this out as a takeover target - he previously said that tis just the sort of company he would like to run.

Still not quite convinced, sd, about your calculation of one-off costs. The CEO report says: " ... a significant operating loss for the year of 375K. In addition to the costs of running the holding company, this loss includes significant non-recurring costs including compensation for loss of office and legal fees relating to former direcotrs and also bad debt provisions, mainly for irrecoverable fees and retainers from clients. ... In view of the exceptional items noted above costs exceeded all expectations, totalling over 1.7m compared to 1.3m on continuing operations in 2003."

You may well be right but this does not say that there would have been a profit without the exceptional costs. The costs for continuing oeprations were 609K. There were two new fee-earners employed whose costs would be in the second half so it is probably reasonable to assume that annual costs were round about 1.3m, thus a break-even situation. In relation to the current year, it appears to be implied that the holding company is no longer operational (costs would have been Shaw and Barclay any way) and your on-going cost of 1m would appear reasonable. Recurrent fees are presumably up to 40% of that so they can't be that far from an annual profit already. Understandably cautious, an opportunity to buy, but galling when it seems likely that the sp should already be much higher. Hopefully the AGM will tease this out. Make sure you are there; there's a good dog!

Eric

butane - 20 Apr 2005 14:31 - 408 of 2787

Total traded so far is 1.4 mill.....only 375k are sells.

ptholden - 20 Apr 2005 14:36 - 409 of 2787

I sort of get the impression that the MMs marked this down yesterday in the expectation that the Results would provoke greater sells. It would appear to be a testimony to the confidence of longer term holders that this did not happen. I certainly think that all of the posters interpretation of the Results have been spot on and there was no need or justification to offload. The SP has been very sensitive today to what are relatively low volumes. Augers well for the future, particularly if good news is evident.

PTH

EWRobson - 20 Apr 2005 19:14 - 410 of 2787

A simpler way, perhaps, of looking at the figures. Monthly costs will now be a maximum of 100K and may be as low as 85K: assume 100K. Repeat business is clearly up a third on last year, say 40K per month. OG's figure for flotations is 50K - 100K. Lets say 60K. Then 1 flotation is needed per month for break even. We already have 7 flotations completed this year so are likely to be about +250K for first quarter. OK, market conmditions may have been exceptionally good, but what might CFPs annual target have been, given that they are on target year-to-date. Probably an annual figure in the range of 500K to 1m or a pe of 4 down to 2. Still somewhat puzzled by the conservative nature of the words used in the report. But, first, Rawlinson is the ultimate professional from his track record and language used. Second, I suspect he has a minimum budget of 12 flotations (which gives break-even) and a target of 24. I always took worst-likely-best in business forecasts and that might be 12-18-24. My guess is that he will not say that he is profitable until he has achieved the 12 flotations on the basis that they are not home until they are dry! I think I have the psychology sussed! So, given that there are at least 5 flotations in Q2, he will anounce that they have achieved break-even and the sp will respond a certain amount. By the end of Q3, with, say, 18 flotations under the belt he will start talking about a profit projection of 500k and the sp will soar. He will then deliver 1m and the sp will achieve 4p on a pe of 20.

I am going to print this out so that I will be able to say I told you so! I have 2 and a half million of these little rubies and am going to tuck them away in a 10-bagger bag. What a ramp, eh! Not really, just a well formulated forecast! What do you say, doggie friend?

Eric

stevieweebie - 20 Apr 2005 19:52 - 411 of 2787

Eric
Did You enjoy Jackanory in your youth LOL.
I hope your tale of good fortune comes true and your doggie bag does'nt get wet on the bottom and the goodies spill out.
Regards
Stevie (Career CFP holder)

EWRobson - 20 Apr 2005 20:23 - 412 of 2787

Hi Stevie

I like the "career holder" bit. As for Jackanory, also fan of Dougal, Epaminondas, Little Black Sambo, Paddington Bear to name just four. I particularly insist on happy endings. I can take a little pain on the way so long as I know the ending will be happy! Mind, all I am doing is interpreting Rawlinson's business plan from what he has told us; seems reasonable to me and eminently achievable with guys of this character and competence! stock dog is obviously recovering from walkies and nosh before he starts his night shift!

Eric

stockdog - 21 Apr 2005 00:12 - 413 of 2787

Night shift reporting for duty - what, bone recovery again! That's just not fair. Where's the map?

I'm with you eric 93.75% of the way precisely - remember I said I was a 5/8 man to your 2/3 - well 0.625/0.666667 = .9375. I cannot see a downside to this stock this year. I can see a very achievable operating profit which equates roughly to the same as pre and post tax profit and especially the same as positive cashflow, there being minor depreciation on computer equipment and a little goodwill. With 500k in the bank at 31/12 and positive cashlow for this year, the net shareholders funds have to increase, as well as the EPS now that the exceptional costs are out of the way and the overhead controlled.

What's 93.75% of 4p - 3.75p, well as a CFD man you know that the real mechanics involve only betting when you know there is POTENTIAL for the upside to be at least 3 times the down side, hoping to actually REALISE about 1/2 of this. 1/2 of 10-fold increase to 3.75p from 0.00375p is a 5-fold increase to 1.875p which is about as high as I can see into the future until we get there. That's enought to be dreaming about in about 30 seconds from now.

Now I'll tell thee an old fashioned story
That Gran'father used to relate
Of a joiner and buildin' contractor
His name it were Sam Oglethwaite

Who remembers Stanley Holloway's Three Ha'pence A Foot about Sam who would not sell Noah his maple "to furnish the sides of his bunk" on the ark at less than the asking price even though the water came right up to his chin when standing on top of Blackpool Tower ("a comical figure 'e cut"!).

Well I'm as stubborn as old Sam O. I've made my pitch at 1.3p or thereabouts by Xmas. Eric is evidently even more of a romantic at heart than me.

But, this relies upon achieving continuing new clients and transactions as set out by me above. Easy on paper, but damned elusive to close business sometimes, don't I know it, especailly if the market apetite for AIM stocks dwindels with the lack of confidence in the DOW and FTSE scheduled to start from mid-May onwards.

Not that it stopped me from topping up again today at a very keen price.

Night night everyone
SD

butane - 21 Apr 2005 12:57 - 414 of 2787



Director buy..........


CFA Capital Group plc



2. Name of director


Anthony Paul Rawlinson



3. Please state whether notification indicates that it is in respect of holding
of the shareholder named in 2 above or in respect of a non-beneficial interest
or in the case of an individual holder if it is a holding of that person's
spouse or children under the age of 18 or in respect of a non-beneficial
interest


As in 2 above



4. Name of the registered holder(s) and, if more than one holder, the number of
shares held by each of them (if notified)


Anthony Paul Rawlinson



5. Please state whether notification relates to a person(s) connected with the
director named in 2 above and identify the connected person(s)


N/a



6. Please state the nature of the transaction. For PEP transactions please
indicate whether general/single co PEP and if discretionary/non discretionary


Purchase



7. Number of shares / amount of stock acquired


1,500,000

corehard - 21 Apr 2005 13:02 - 415 of 2787

Flippin 'eck butane... you must be constantly watching !!!

butane - 21 Apr 2005 13:06 - 416 of 2787

Just topped up...150k @ .39p

moneyplus - 21 Apr 2005 13:40 - 417 of 2787

Price moving up nicely--looking promising!

stockdog - 21 Apr 2005 14:42 - 418 of 2787

Tony Rawlinson obviously following my lead yesterday at .01p more than I paid! No wonder he didn't want to give too bullish a report in thed accounts.

I feel much comforted by being in good company.

SD

ptholden - 21 Apr 2005 14:47 - 419 of 2787

Nice to see TW buying another chunk. I would guess that the 1500000 'sell' this afternoon is actually his buy reported late. So good positive volumes again today. I note from the Shares Mag that the Intradem Films placing is at 4.3 mill. I cannot remember what the valuation of recent placings has been, but this seems a little more than has been the norm for CFP, (bigger fees!!).

Regards

PTH

butane - 21 Apr 2005 14:53 - 420 of 2787

ptholden,
The 1.5 mill buy by TR WAS reported yesterday at 16:10 as a 'T' trade, the 1.5 mill today is an 'O' trade so it is probably a sell.

The Intandem placing is at 1.25mill (see below, taken from the LSE site)




The New Issues List is a list of all new companies which are either seeking admission to one of our markets or have been admitted to trading within the last seven days. This list provides basic information on the company, terms of the offer and its sponsors.



Offer details | Company details | Advisor details


Further information about the terms of the offer.

INTANDEM FILMS PLC
Offer details

Expected offer price (p):
Expected size of offer (M): 1.25m
Expected retail portion (if any):
Expected Market Cap (post issue)(M):
Method of issue:
Expected first date of trading: 22/04/2005
Market: AIM
Proceeds to be used for:
Location of address at which admission document will be available: CITY FINANCIAL ASSOCIATES LIMITED POUNTNEY HILL HOUSE 6 LAURENCE POUTNEY HILL LONDON EC4R 0BL
Date at which admission document will be available:

ptholden - 21 Apr 2005 15:07 - 421 of 2787

Butane,

Stand corrected, although I don't remember a 1.5mill Sell going through yesterday. Wonder why the Shares Mag do not check the information available before going to press!

PTH
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