| Home | Log In | Register | Our Services | My Account | Contact | Help |
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. |
 Website: www.cityfin.co.uk |
|
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. |
|
stockdog
- 17 Jun 2005 16:03
- 830 of 2787
stockdog
- 17 Jun 2005 16:22
- 831 of 2787
H1 revenues 1,126,625
H1 interest 15,000
H1 overheads 600,000
H1 profits 541,625
H2 revenues 1,025,875
H2 interest 25,000
H2 overheads 700,000
H2 profits 350,875
Year Profits 892,500 (increased from last time by 40k interest earned on cash at bank now allowed)
@ 0.64p mid SP = PE of 4.44 - should be about 12, so SP mid should be about 1.73 and SP bid about 1.60 (allowing 15% spread).
If I am about right on H1 results, then my 12 month target is now 1.60 (increase since last figures is the effect of allowing for interest earned for first time) with an inner target by end of 2005 of, say, 1.10.
I have previously asked - what will they do with all the cash? Well, apart from putting it on deposit which won't clothe the baby for long, they may acquire, for example, a fully operation broking team, in which case the specifics of that deal would have considerable effect on sentiment and thus SP, impossible to evaluate with any accuracy from here. If managed by TR and team it should be good for us. I hope I will still be here to see it.
Keep the faith!
sd
ptholden
- 17 Jun 2005 16:24
- 832 of 2787
Keeping the faith! will have a look at my own model and see what my H1 comes up with. Should be pretty close to yours I think.
pth
stockdog
- 17 Jun 2005 16:38
- 833 of 2787
Forgive this minute by minute commentary - just playing with my free level 2 access whilst I have it.
sd
EWRobson
- 17 Jun 2005 20:05
- 834 of 2787
Volumes are actually still very low so you wonder what will happen when the market becomes aware of the ptoential interim figures. For any site visitors, tis worth taking these projections on board and their implications. Its not often that you can actually work out the results before the company posts them!
cirE nosboR (not that I like what I see in the mirror!)
ptholden
- 17 Jun 2005 22:03
- 835 of 2787
My own model gives:
H1 revenue of 1,095,250. If I include yr interest calcualtion of 15,000 and my own overheads figure of 500,000, I arrive at a profit of 610,250. This equates to a mid SP of 1.1p.
I have used reduced overheads for two reasons. One, a slimmed down team; and two, the actual overheads will include expenses for which will be also reported in turnover. Note my initial figure is for revenues not turnover, hence not included in the overheads column as will be double reported if you see what i mean.
In the final analysis, we seem pretty close, and any differential will be mostly due to the unknowns. At least we know that the SP is still worth nearly double where it is today.
That's the fundamental analysis, what will sentiment and momentum do the price?
pth
EWRobson
- 17 Jun 2005 22:09
- 836 of 2787
I'm worried about deadfred - this surge might have killed him off! lol!
Eric
overgrowth
- 17 Jun 2005 22:16
- 837 of 2787
The AFX news summary H1 2005 profit x vs H1 2004 loss $y is the thing that will bring the newbies flocking in.
butane
- 19 Jun 2005 09:47
- 838 of 2787
The rise and rise of London's Aim
Guy Dresser, Editor, This is Money
17 June 2005
THE Alternative Investment Market is ten years old this weekend. Despite a slow start and fears that it would become home only to small, second-rate and risky companies, it has matured to become arguably the most successful secondary market in the world.
And last year it accounted for the highest proportion of UK flotations in its history.
The attraction for companies is that listing requirements are less onerous and cheaper, though the Nominated Adviser system and the London Stock Exchanges backing means early fears of a spivs' paradise remain largely groundless.
For some investors there are good tax reasons to be invested in Aim stocks, not least for taper relief on capital gains tax. Aim shares are classified as business assets and there is no inheritance tax if the shares are held for two years.
Andy Crossley, fund manager of the Invesco Perpetual Aim VCT and Head of UK Smaller Companies Growth Fund, which is 40% invested in Aim, admits there was a degree of suspicion in the early days.
But he adds: 'It's proved a magnet for many more companies at an earlier stage of their development than the main market. Biotech stocks, resources companies, technology plays, these are more suited to Aim.'
In 2004 some 355 companies were admitted to Aim, and 216 so far this year compared to just 31 on the main market. This means 85% of new companies are coming to Aim as well as some defections from the main market. But despite the large numbers of companies using Aim, not all are attractive investment propositions.
Out-of-favour industrials which have moved from the main market may have lower listing fees but they won't have found a more sympathetic ear from fund managers or analysts.
As Frank Manduca, manager of the UBS UK Small Companies Fund, points out: 'Selectivity is vital. Aim stocks are often in niche businesses which do not fit easily within sector boundaries and stock selection from the Aim universe involves a number of considerations. We look for a broker sponsor that has a good track record in past flotations, an experienced management team with credibility and a history of past successes.'
WINNING HAND: Gaming VC has been a key stock for the UBS UK Small Companies FundAim stocks have been a key driving force of the UBS fund's performance, including Gaming VC, 4imprint, 1st Calgary and Biofuels.
Manduca points to two Aim ventures the fund is currently investing in as interesting propositions: Vastox, a biotech company looking to develop a cure for muscular dystrophy, and Staffline Recruitment, a company that places temporary workers.
Catherine Stanley, manager of the F&C UK Smaller Companies and F&C Aim Growth funds, has around 25% of the former invested in Aim-listed companies. The UK Small Companies fund's top Aim-listed holdings are Inter Link Foods, Torex Retail and Sportingbet.
overgrowth
- 20 Jun 2005 07:37
- 839 of 2787
ptholden
- 20 Jun 2005 08:18
- 840 of 2787
Good start to the day. once again only SCAP on the Offer, MMs remin short of stock (no surprise there). Doubt very much if SCAP have a great deal, so would expect another tick up again soon. Assuming the Sellers don't appear of course.
pth
trader4 - 20 Jun 2005 08:51 - 841 of 2787
On top of this there is a rumour of a second bidder in the wings going about
This will reach new highs this week, now is the time to get in before it heads toward 100p, current sp is 32p
IMHO
overgrowth
- 20 Jun 2005 08:54
- 842 of 2787
No ramping needed for DGT though as we all know that some tasty profits are on the way...
ptholden
- 20 Jun 2005 09:27
- 843 of 2787
pth
stockdog
- 20 Jun 2005 09:48
- 844 of 2787
sd
corehard - 20 Jun 2005 10:57 - 845 of 2787
ptholden
- 20 Jun 2005 11:02
- 846 of 2787
For once I disagree with you. Having watched this share over two years, the run up to the interims and publication will have a considerable effet on the SP. AIMHO of course, but it is certainly a fun time to own DGT shares.
There will be quite a few holders who bought between 0.30 and 0.50p who will be starting to take or thinking about taking profits now, so sellers always to be expected. it's what makes the market afterall.
pth
stockdog
- 20 Jun 2005 12:38
- 847 of 2787
So, being a very foolish dog . . .
Retainers as per client list projected to end 2005 803,000
New client income same as 2005 1,875,500
Interest (assume no capital expenditure) 80,000
Total revenues 2,758,500
Operating costs, say, 1,500,000 (allows approx two additional members of staff)
Operating profit before tax 1,258,500 - 41% growth on 2005
Still no tax to pay on account of 2,555,000 losses b/f at 31/12/04
So PE 2006 = 3.30. If this should be nearer 12, gives 24 month projected SP of 2.44 mid price
PEG 2006 = 3.30/41 = 0.08
On this basis one might expext PE to deserve nearer 15, giving mid SP 3.05 in 24 months time.
So definitely a hold for a couple of years, subject to actual results every 6 months, of course.
IMHO DYOR
sd
ptholden
- 20 Jun 2005 13:19
- 848 of 2787
On pure fundamentals you have my full agreement, but DGT do become a popular share in the run up to results and if they are good (and we know they should be) there will be a further rise in line with the perception that this must be a good share to be in. Hence my rationale for believing that the 1.0p barrier will be breached. by how much, remains to be seen.
pth
stockdog
- 20 Jun 2005 14:16
- 849 of 2787
My analysis is always based upon conservative view of reality - not daring to quite believe the best bet view. I would not be surprised to see 1p breached sooner than I have predicted. Equally not sure that, if this happens, it means the 2 year prediction will be any higher.
Happy to compete (in friendly fashion, of course) with you on how high it will go
sd
| About MoneyAM | Ts and Cs | Privacy Policy | Investment Warning | Content Standards | Corporate Solutions | Advertise With Us | Site Map | © 2025 MoneyAM |
Follow us on Twitter