Ive had these on the watch list for a few weeks now and the company seems to be getting a lot of Institutional Interest.

Its basically an asset based lender to smaller companys and carrys out a similar business to that of the big clearing banks, but as the economy gets tighter and bank lending gets more difficult to secure customers are turning to this Northern based company as an alternative.

Description Of Business.

Davenham is a leading, independent asset based lender to the UK SME sector.

The business was founded in 1991 in Manchester from where its core operations
are run. In recent years, Davenham has begun to expand and it now also operates
from offices in Leeds, Birmingham, Liverpool and Newcastle.

Davenham provides lending solutions designed to meet the financing needs of UK
SMEs - typically involving loans of between 10,000 and 3 million. The
Directors believe this is a profitable and attractive market place that is not
adequately serviced by mainstream lenders, which tend to adopt a formulaic
approach to lending decisions. Davenham has a diverse loan portfolio, with its
lending activities organised into three divisions: property finance, asset
finance and trade finance.

Davenham enjoys strong client relationships reflecting high levels of customer
service and tailored financing packages. The Directors believe that Davenham's
ability to form a commercial view and reach lending decisions quickly underpins
premium rates and high levels of repeat business. New clients are typically
sourced through introductions from existing clients, direct approaches and a
network including mainstream lenders, finance brokers, accountancy firms and
other professionals.

Davenham has a strong financial record both in terms of revenue growth and
profitability and has consistently achieved a gross return on loan portfolio of
circa 20 per cent. The Directors believe this results from Davenham's position
as a leading lender in a profitable and niche market place in which the
competition is fragmented.

Davenham is funded by a group of banks led by The Royal Bank of Scotland plc and
has a facility of 175 million, which the Directors believe is sufficient for
Davenham's current requirements.

The Placing:

Davenham, a leading independent asset based lender to the UK SME
sector, announces completion of its admission to AIM and that trading in its
ordinary shares commenced at 8.00am today.

Panmure Gordon, the Company's broker, has placed 10.9 million new
ordinary shares on behalf of the Company raising approximately 27.7 million
before expenses, and also placed approximately 6.7 million existing ordinary
shares for approximately 16.9 million on behalf of selling shareholders.

Approximately 17.2 million of the proceeds of the issue of new
ordinary shares will be used to redeem certain loan notes and mezzanine debt.
The balance of 10.5 million will be used to increase the capital base of
Davenham and to pay for the expenses of the flotation.

Davenham will be included in the Speciality and Other Finance sector
and will have an EPIC code of DAV.L.

Hawkpoint is the nominated adviser and financial adviser to Davenham
and Panmure Gordon is broker.

Dunedin and Indigo backed the buyout of Davenham in 2000 and have
supported the Company through to a successful flotation. They will remain
supportive shareholders.

The placing took place at 254p.

Director Speak.

David Coates, Chief Executive said:

'We are delighted by the positive response to the placing and the completion of
our admission to trading on AIM. I am pleased to welcome our new institutional
investors as shareholders of Davenham.

'We are well positioned to capitalise on the attractive growth opportunities in
our market place and we believe the flotation will raise our profile and support
future growth by strengthening our ability to lend, expand into the Midlands and
the South of the UK and fund selective acquisitions.'

I see from the Brokers forecasts that the Pospective P/E is approx 10 falling the year after. Might be rewarding to get in at this early stage.

DYOR.

Cheers GF.

Also tipped in "Share Weekly" this morning.

cheers GF.

And tipped again over the weekend....................

Update - The Business AIM Investor column says buy Davenham.

Every Tom Dick and Harrys been tipping this one, it must have some appeal. 6 sources in all.

cheers GF.

Article from The Business this weekend-

DAVENHAM is a money lender created from a management buy-out more than a decade ago from the Burns Anderson group. The founders made their exit on flotation, leaving the company in the hands of new management.

The primary area of business, responsible for almost half of the 150m loan book, is bridging loans, refurbishment loans or advances to small property developers. An average exposure of less than one year and around 300,000 indicates the cautious way the risks are spread. Similar figures apply to the trade finance division, which accounts for a third of the portfolio. This comprises a range of buy-out and acquisition support activities and invoice-discounting services.

Operating in areas where mainstream financial institutions either fear to or cant be bothered to tread, Davenham makes a 20% return on secured lending from its 2,400 corporate clients. The company is supported by a 175m syndicated loan from its own lenders. Bad debts provisions are low.

Income in the year to June 2005 was 28.5m against 22m in 2004 and just 16m the year before that, so the company is growing at a fair canter. With interest payable of 9m and administrative expenses of 11.3m (1.6m more than in 2004) this meant pre-tax profits of 8m.

Davenham says its activities are complementary to banks as opposed to being competitive, describing bankers as tending to lend according to a template rather than individual corporate circumstances. Davenham reckons there is a target market of 80,000 companies similar to those it serves, providing plenty of opportunities for the future. The companys record in generating premium returns speaks for itself.

One threat is that the company is reliant on the primary lines of credit that it can secure. The facilities will have to be renewed or extended within two years. However, by refusing to compromise on adequate security or quality of operation, and by spreading the risk, Davenham appears to operate from a stable base. The Aim flotation, which took place at 254p per share, raised 24m for the company of which 17m of which was for debt reduction.

Davenham is capitalised at 67m. The 2005 earnings, if replicated in the current year, would mean we are looking at a p:e ratio of 12. The underlying earnings figure should be more of course. With strong current momentum, the spread of business, and no dependence on large transactions, it all adds up to an opportunity with much more upside potential than downside. Davenham is a buy.

cheers GF.

Ok a down day the firs for a while, but its all systems go here.

cheers GF.

A corker of a post here guys.......

Here's that "Share Weekly" tip I mentioned.

Bold entrepreneurs turn to Davenham for their funding
Friday, December 16, 2005

My attention was drawn to Davenham by Dunedin Enterprise Trust. They invested 5m in the company back in 2000 and have seen the value of that initial investment multiply fourfold at the latest flotation price. They must think there are more gains to come since they have retained a 10 per cent stake worth 7.4m at the latest price of 290p, a useful premium to the 254p issue price.

Business Summary

Davenham group is a specialist finance company. The company offers a range of short-term lending such as trade finance, asset finance, property loans and invoice finance.

One reason why I like Davenham is that the business has already grown so strongly. At the time of the management buyout in 2000 the group had a loan book of 40m and made profits of less than 2m. Latest profits were 9.25m on a loan book of 160m. The company is hopeful that strong growth will continue into the future. This seems quite likely.

The company used the 27.5m of new money raised in the flotation to repay subordinated loans and mezzanine financing of 17.5m and add 10m to net assets taking them from 30m to 40m. Net assets are important to an asset finance business like Davenham because they determine how much the company can safely lend. A big increase in the asset base creates scope for a big increase in future lending and so in profits.

Dont put your Christmas shopping on Davenhams credit!

Initially I must confess I was shocked when I asked chief executive, David Coates, how much the company charged for money. The answer was credit card rates between 18 and 20 per cent. How, I wondered, could the companys typical SME (small and medium sized enterprise) customer borrow such expensive money and still be profitable. The answer is that they borrow for relatively short periods against projects expected to deliver predictable high returns.

He gave me two examples. The first was in property, which accounts for over 40 per cent of the groups loans. He imagined a property developer with 200,000 in cash. He wants to buy a derelict property for 1.5m and spend 500,000 on refurbishment to create a property with a final value of 2.7m. He would be unlikely to persuade a more traditional bank to finance such a deal. Many banks operate mechanical loan evaluation procedures and such a deal would fail to meet their rigid criteria.

By contrast, Davenham would lend the 1.8m needed to do the deal if they were happy with the numbers and the skills of the developer. He pays them 1.5 per cent a month for his money but if he can complete the project in say five months his total cost including interest would be 2.15m for a property worth 2.7m leaving him 550,000 in profit.

Davenham can lend money faster than the banks

Davenham can also make decisions fast, which is important if you are trying to snap up a bargain in the property market. Banks have too many layers of decision making to give an answer in two or three days. Not surprisingly many of Davenhams entrepreneurs become repeat customers. Nor is the business as risky as it looks since the properties provide excellent security.

Another typical deal might be an entrepreneur wanting to source cane furniture in China for sale to a multiple store. He wants to buy the furniture for 1.25m and sell to the store chain for 1.5m. Unfortunately he only has 50,000 of his own money so the banks will not be interested. As long as he has a firm order from the store Davenham can finance the deal. The entrepreneur needs three months funding, one month for shipping and two months to allow for the fact that big store groups buy everything on 60 days credit. Davenham can give him a letter of credit to make the purchase and also factor the credit so he receives his money as soon as the goods arrive in the UK. He pays three months interest to Davenham but still ends up with around 200,000 of profit, not a bad return for an investment of 50,000.

Financial Data
Year Turnover PreTP Change 2003 15.9m 5.8 NA 2004 21.7m 6.3 8.6% 2005E 28.4m 9.3 47.6%


Strong management key to success

Good management is essential to make a business like Davenham a success but we know this team is good. Firstly, they have been highly successful in growing the business through some bumpy times in the UK economy. Secondly, Dunedin will have crawled all over them and their business before investing its 5m in 2000 and Dunedins top of the list criterion for investing is strong management.

According to David Coates the shares are on a prospective PE around 10 and a planned 45 per cent payout ratio means there will be generous dividends. Past growth has come from the group adding new branches. It is based in Manchester with branches in Liverpool, Leeds, Birmingham and most recently, Newcastle. It is looking to open a branch in the South-East in the next few months. I am confident good growth will continue making the shares an attractive investment.

cheers GF.

Taking a breather at the moment, the trend is upwards.

cheers GF.

Added a few more of these at 299.5p yesterday. I expect a robust last week in December and also the same in the first week of january.

cheers GF.

An interest rate cut touted by many economists for as early as february could see these rising up during the new year.

Interest rate cuts obviously leading to less bad debt and more take up of the business services.

cheers GF.

Finished off 2005, should be a good one for 2006.

cheers GF.

Still going for a song. If we get rate cuts in February yhese should really take off.

cheers GF.

Still very cheap and a positive RNS this morning.

Davenham says performance in line with expectations
AFX


LONDON (AFX) - Davenham Group PLC said its performance is in line with expectations.

Chef executive David Coates said: 'Market conditions are providing Davenham with a strong pipeline of new business opportunities underpinning our confidence in the outlook for the remainder of the current financial year.'

Davenham expects to issue the its interim results during the week commencing Feb. 20, 2006.

newsdesk@afxnews.com

cheers GF.

A very good day for this one, and remember its still cheap, get out the calculator to confirm.

cheers GF.

Broker PANMURE slapped a BUY rating on this today.

cheers GF.

And moving nicely this morning.

cheers Gf.

All buys so far.

cheers Gf.

Positivley cruising.

cheers GF.

Keep talking GF .... I'm with you on this one.

Oi Flynn , fill yer boots .... bit of quality stuff here.

busted flush.

Biggest pile of excrement on the stockmarket.

AND WE HAVE MORE................

What a cracking day in rotten markets in general. Its still very cheap aswell. Just look at these forecast figures from the house broker Panmure Gordon............

Year Ending
30-Jun-06 sales 32.75 EPS 28.92p P/E10.6 Growth n/a
30-Jun-07 sales 37.76 EPS 33.89p P/E 9.0 Growth +17%
30-Jun-08 sales 43.29 EPS 39.53p P/E 7.7 Growth +17%


cheers GF.