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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
- 01 Jul 2005 19:53
- 966 of 2787
sd
tburns - 01 Jul 2005 19:57 - 967 of 2787
I added the a Mill at 4pm at 0.63, alreadfy hold another 2M and see this going upto 1p by the time results hit. No brainer, only wish I had had funds available a couple of weeks back.
ptholden
- 01 Jul 2005 20:12
- 968 of 2787
An astute buy I think!
I am sure quite a few would have either topped up sub 0.40p or risked a punt round about those sort of levels. I would also expect to see quite a bit of profit taking between 0.75 - 0.90p. However, I get the feeling that this might surprise quite a few between now and after the Interims.
It's been a rollercoaster that's for sure.
pth
ptholden
- 01 Jul 2005 22:58
- 969 of 2787
sd, you will recall we discussed this a few weeks ago. My current profit forecast for H1 is in the region of 572,250 WITHOUT the TGM disposal fees. So add anything between say 100,000 and 600,000 for your model. Working on 250,000 gives a SP of 1.5p or so (PE12).
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ptholden - we are never going to know the true fees earned for the disposal on behalf of TGM. But I will give you three positive pointers.
1) I spoke to TR 3 weeks ago and I asked him when he mentioned in the full years results that they were working on some significant transactions, had they achieved this in H1. He drew my attention to the disposal for TGM but stressed we're not going to find out what pre-arranged fee had been agreed. But look at the fact TR was excited enough to purchase some more shares after confirmation of the RNS disposal.
2) I phoned the chief Ex. of TGM and asked him would I be right in stating that you would have paid around 3-4% commission to DGT for this disposal and he stated" That sounds about right". To be honest, I personally think 3% would be too high a percentage otherwise we're talking around 600k in fees. That is too good to be true.
3) I met Tom Bulford of RHPS to try and nudge him to tip DGT. He is not going to tip this due to the fact the MM will screw over new buyers with the spread and not give a chance for most of his subscribers to buy above the limit he would set. Anyway, I estimated the fees for the disposal, as being a cautious 100k, which he suggested, would be too low a fee. Tom would certainly have a better idea then most on what the likely fees would be. Maybe 200k would be a more likely figure.
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pth
EWRobson
- 02 Jul 2005 23:12
- 970 of 2787
Eric
stockdog
- 03 Jul 2005 12:10
- 971 of 2787
Hi, how's the family addition? (Maybe they haven't quite got that far, being busy with the alphabet to start with!)
BTW I know what exigencies are - they're people what used to be igencies, innit!
As for ASC, I will be fully attentive on July 11th. If the SP goes down or nowhere I may swap out of these into more SEO/DGT/SEY. If they give a lift I may take whatever quick profit is going and do the same. Following your advice I have to find a way to reduce the number of holdings in my portfolio and ASC is next on the list. (OK it should be Aerobox, but I'm so far down I haven't the heart to sell them now and there seems to be something in the wind there just at present. Rules are made to be broken, after all! ASC is alphabetically next - sorry.).
pth - Thanks for intersting thoughts. I don't have my model with me (on my office conmputer) but from posts above I was going for H1 of 541,625 - less Designer Vision 36,250, plus TGM disposal, say 175,000 (conservative) gives H1 of 680,375 - wow!
Just noticed in my earlier post 901, I may have been talking dog's bollocks. I may have omitted Q3 and Q4 value for H1 acquired retainers, although my H1 + H2 reconciled with my full year forecast - have to check on Monday, sorry for confusion.
Anyway Parallel Media gets us off to a good start to H2 with maybe 75k fees. This is lowish taking account that only 500k came from outside sources the balance coming from the board/associates. So I allowed 4% X 500k plus 1% X 500k commission plus 50k advisory fees. Could be higher, doubt if lower. Now for some more retainer clients before the summer silly season when I don't expect to see much action until September.
sd
ptholden
- 03 Jul 2005 12:25
- 972 of 2787
Nice to see we remain pretty much d'accord vis-a-vis profits for H1, as Eric says TGM is certainly the joker in the pack, I just wonder how big? Guess we will find out in August.
Eric
Have been speaking with mark over the weekend, silly boy should have listened about six weeks ago when we were playing golf at LCGC. However, should be plenty of upside yet to come with I think a minimum attainable SP of 1.0p. Interesting week(s) ahead.
pth
andysmith
- 04 Jul 2005 14:29
- 973 of 2787
0.0063p to buy, question is will there be another drop or should I have a dabble at this price before my hols?
butane
- 04 Jul 2005 14:35
- 974 of 2787
Good luck
ptholden
- 04 Jul 2005 14:39
- 975 of 2787
As far as the SP is concerned, difficult to read today. I wasn't surprised in the least on Friday to see the rise. All of the indicators were saying oversold and I think a few astute investors were waiting for the fall to bottom out. Personally, I thought there would be more buying pressure today, but clearly not. The one thing I am certain of though is that the MMs do not have very much stock at all and any significant buys above 500k will set this off again. I suppose whether you buy at 0.61p or 0.55p won't make a huge amount of difference when it gets above 1p. LoL
pth
markusantonius
- 04 Jul 2005 14:56
- 976 of 2787
ptholden
- 04 Jul 2005 15:13
- 977 of 2787
pth
andysmith
- 04 Jul 2005 15:19
- 978 of 2787
Question in my head is will it go below 0.0055p to 0.005p again?
ptholden
- 04 Jul 2005 15:27
- 979 of 2787
andysmith
- 04 Jul 2005 16:24
- 980 of 2787
Would kick myself if on return from hols it was up significantly for the sake of a few 0.0001p's!! Thanks for the tip pete and thread OG.
andysmith
- 04 Jul 2005 16:25
- 981 of 2787
ptholden
- 04 Jul 2005 16:32
- 982 of 2787
pth
stockdog
- 04 Jul 2005 20:35
- 983 of 2787
I'm pitching for 225,000 fees from the TGM disposal, up from 50,000 previously - looking at pth's post above, just hunch it's about right, no accurate guidance available from anywhere. This gives me H1 profit of 691,625, plus H2 of 339,625 (no TGM 225k fees and 100k higher O/head in H2, plus minor fee income adjustment) for a full year Net Profit of 1,031,250 which at a PE of 12 gives an SP mid of 2.00 (SP bid 1.85 at 15% spread) as a 12 month target. If there was another TGM type deal in H2, then it would be a bumper year indeed.
I think it is genuinely indicative that the business is growing well that every time I do this exercise the 12 month target SP goes higher. 2p seems a little crazy from where we are now - 5-bagger from my average purchase price, but I can't see that I am other than conservative in my figures.
Anyway we'll know soon enough whether I am anywhere near the mark for H1. I guess we should see somewhere around 1.00p when the first half results are announced.
So adding to holdings at <0.60p seems eminently sensible to me.
sd
ptholden
- 04 Jul 2005 20:53
- 984 of 2787
Just been over on another board and SBL (poster) has started a new research thread dealing with DGT income. It is reassuring to know that his figures and both our own are very much in agreement. I think the opportunity to add at <0.60p may be fairly limited (well, I hope so anyway). Always depends on investor sentiment. I was a little surprised that the offer at 0.63p was restored following the mark down this afternoon, I was expecting to be down on the day. Anyway, whatever the reason, nice to see consolidation rather than a huge spike, although with this share, that is always a strong possibility.
pth
stockdog
- 04 Jul 2005 22:03
- 985 of 2787
sd
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