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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Griffin Grp. | GFF | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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| 0.00 | 0.00% | 0.625 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 0.625 | 0.625 |
| Top Posts |
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Posted at 02/2/2007 18:31 by indianconnection JakNifeYou seem to know a lot about Griffin and Stephen Dean Does he has any connection with Square Mile securities who try to sell shares in various companies to private investor at supposedly lower price then the bid price or placing price! All though Square Mile are FSA athourised I would like to know "has any one traded through them and have lost or made any money?" At present they are promoting AVD - Avid Holdings and guess what the chairman is Stephen Dean. Good that I checked this BB. Well done JaKNife |
Posted at 15/3/2006 12:00 by plainz Jaknife -i know released a repost, just to keep this in public view.Author: JakNife Subject: The Dean factor, why you should avoid GFF I wrote the post below over on ADVFN last night on a new Griffin Group (GFF) thread, it focuses in particular on the Chairman of Griffin Group, Stephen Dean, and it struck me that perhaps there is a new generation of potential shareholders who would appreciate reading about Mr Dean before they think about purchasing shares in his company...... Griffin Group's chairman is Stephen Dean and controversy follows Mr Dean wherever he treads, Tony Hetherington of the Mail on Sunday refers to him as 'a colourful character', see: and then goes on to note that: "In 1992, Chequers Group, a company he founded under its original name of Dean & Bowes, threatened a lawsuit over a £200,000 pay-off he took when he quit as chairman, alleging it did not have shareholder approval. In 1997, another of his companies, Dean Corporation, admitted 'inadvertent' breaches of company law, including paying £245,000 without shareholder approval to buy a business part-owned by Dean himself. And in 2000, another Dean company, Artisan UK, admitted an 'inadvertent' breach of the Takeover Code. It bought am shares in technology company Enterprise Asia when it was a possible takeover target in the sights of a separate company, Weatherly." This brief record alone should alert you to the risks of dealing with any company that is associated with Stephen Dean, but there are other reasons as well. 1. Links to illegal Spanish boiler rooms. The Mail on Sunday covers this in detail in these two articles: 2. Incompetent Manager Stephen Dean has been the director of many UK quoted companies but Griffin Group is currently his main "UK operations". Griffin Group used to be known as "Cater Barnard (USA) plc", see: and used to be a subsidiary of Cater Barnard plc. In turn Cater Barnard plc was the vehicle that Stephen Dean used to use for his main UK operations. Its publicly available accounts show that at 30 September 2000 its net asset value per share was 12.27p. Over the following two years these accounts show a disastrous decline in shareholder value to a mere 0.051p per share at 30 September 2003. This represents a massive 99.6% destruction in shareholder value. It strikes me as more than reasonable to describe any director who has presided over an era of such monumental destruction in shareholder value as "incompetent", I would offer the above as evidence of my why I personally have formed the opinion that Stephen Dean is an incompetent manager. 3. Fat Cattery But the issue that I personally find more disturbing is Mr Dean's preference to make money for himself, even when shareholders are suffering so much pain. The total net assets of Cater Barnard plc at 30 September 2000 were approx £14.5m. However the accounts filed up to 30 September 2003 show that payments of the order of £2.35m were made by Cater Barnard plc to Mr Dean and to his personal offshore companies. Hence whilst shareholders suffered a disastrous decline in their investment Stephen Dean feasted heartedly on the carcass of Cater Barnard. What stops him doing the same at Griffin Group? 4. Griffin Group Overvalued Regarding Griffin Group itself, this is nothing other than a glorified investment company, its latest accounts can be read here: As an investment company I would suggest that the main point of reference for calculating a measure of value is its net asset value per share. As at 30 September 2005 the above accounts show that GFF's net asset value per share is 4.71p, well below its current share price of approx 6.75p. In any case, see 2 above for an explanation of what can so easily happen to net asset value per share. Conclusion It is rare that such clear red warning lights are flashed in front of investors' eyes, buying shares in Griffin Group would be complete madness. Note You might reasonably infer from the above that I have a very low personal opinion of Stephen Dean and his businesses. I hope that I have made it clear exactly where my post is fact and where it is opinion. If anyone believes that I have made an error of fact or that I have expressed an opinion and not made it clear enough that my comments are merely my opinion then please feel free to either post here or email me at: cweston51 at Yahoo.co.uk and I will endeavour to make whatever corrections are necessary. regards JakNife |
Posted at 17/12/2005 19:20 by encarter I'm not defending Stephen Dean i'm defending GFF I don't care about him and I don't really care about Cater Barnard. There's no advantage to Stephen Dean in the decline of GFF, financially or reputation wise. He's made mistakes in the past but people learn from their mistakes, maybe at the expense of investor like yourselves but he'll make a lot more money if GFF prosper than if they don't. Results prove that they are doing well and recent deals show that this trend is continuing. Next results will be good so i'll see what happens from there. |
Posted at 26/9/2005 12:12 by wole The share price is weak despite good fundamentals, and I think it is because quite a few investors have strong misgivings about the management. It would appear that many have negative experiences of investing in other companies formerly managed by the current chairman... |
Posted at 13/6/2005 07:46 by wole Well, the results are out at last. Cracking headline figures. Let's see how the share price responds...RNS Number:4587N Griffin Group PLC 13 June 2005 13 June 2005 Griffin Group plc ("Griffin" or the "Company") Interim Statement For the Six Months ended 31 March 2005 (the "Period") Highlights: * Turnover up 309% to #4,701,297 (2004: #1,149,615) * Pre tax profit up 225% to #452,225 (2004: #139,196) * Earnings per share of 0.70p (2004: 0.45p) * Net assets per share 4.99p (2004: 3.82p) Adrian Stecyk, Chief Executive said: " the Directors are delighted with the strong results for this six month period that reflects our strategy to establish a number of AIM traded investment companies. We continue to review possible investment and business development opportunities both in the UK and the US ". Enquiries: Stephen Dean, Chairman Tel: 00 34 605 282211 Adrian Stecyk, Chief Executive Tel: 001 646 258 7269 GRIFFIN GROUP PLC Chairman's Statement I am pleased to make this interim results announcement on behalf of our Company, which demonstrates the further success we have achieved. The fee income for the business has grown substantially in the six months ended 31 March 2005 to #4,701,297 compared to #1,149,615 in the same period to March 2004. As a result, profit before tax increased from #139,196 to #452,255 and earnings per share increased from 0.45p to 0.70p. The weakness of the dollar in comparative terms has held back the performance of the US operations when translated into Sterling. As at 31 March 2005, the Company had cash balances of #629,254 and marketable investments of #1,108,397. In the US, we completed over US25 million of fund raising for our clients during this first six months. In March, Griffin Securities, Inc. was ranked in the top ten by number of private placements for 2005 year to date. Importantly, the investors introduced by our investment bankers to these transactions have received to date a good return on their investments. Complementing our investment banking operation is our stock research operation, which continues to build an excellent brand for us, both with the users of funds as well as with the sources of funds. Since we began our stock research three years ago, our analysts have recommended stocks which on a cumulative basis have more than tripled in value. The increasing visibility of our stock research has also started to increase the volume of open market transactions processed by our brokerage operations. In the UK, business has continued to be buoyant. We have initiated and facilitated the creation and flotation of 6 AIM investment companies, both as an investor and agent. These AIM investment companies and our existing AIM investment companies have also created a number of corporate finance deals, some of which have been completed with the remainder in progress, including:- i) Tower plc which was admitted to trading on AIM in September 2004 made its first investment in December 2004 and has recently issued a re-admission document to its shareholders to complete the acquisition of Maskina AS, subject to approval by its shareholders at the scheduled EGM. ii) Pearl Street Holdings plc which was also admitted to trading on AIM in September 2004, made its first investment into The Health Group Limited, which has launched an innovative corporate and personal health fund scheme that has received national press coverage and is successfully securing high profile corporate clients. iii) Interbulk Investments plc was admitted to trading on AIM in December 2004 and has made its first investment into a business specializing in the transportation, storage and discharge of bulk solid materials using ISO-Veyors, an inter-modal transport, storage and discharge system, with interests in the UK, Europe and China. iv) Ionian Estates plc was admitted to trading on AIM in February 2005 and made its first investment into a Croatian property development business that operates by partnering with reputable local builders and developers in Croatia, and is primarily focused on leisure and holiday projects in the property development sector. Your Board continues to seek strategic acquisitions and investments to enhance the Group's position and services offered. In addition your Board will continue to seek ways to provide a better share price for its shareholders. On behalf of the Board I wish to thank the staff and the Company's advisors for their continued support and advice. Stephen Dean Chairman GRIFFIN GROUP PLC Group Profit And Loss Account |
Posted at 06/4/2005 09:31 by pepi moon TOB I think you may like TEF they specilise in selling to investors or housing associations / affordable housing.. they just signed a contract solely for a housing association, in other words, all sold before a brick is laid. Well worth researching and trading update last week stating all in line ... results due in May. Small player becoming serious ... well run ...good reputation... take a look at forecasts for 2006 ... I have it down as a 1 bagger over 2-3 years (maybe sooner though i.e 1 year) so I guess this is one that may suit you. Also the fact that they specilse in selling at discount prices or to housing associations. Currently trading at P/E of 7.5 and the market has not reflected the trading update last week. All opinion no fact etc. |
Posted at 24/3/2005 14:18 by pepi moon Good to see you posting again TOB.They say "if you are in it its a business, if not its a racket" One thing you do know about Mr Dean is he is sharp perhaps one day he will get that golden nuggett and turn it into a golden bar for investors. Not related to Griffin but curious to what you think about all these new mining stocks/shell companies appearing and where they will end up?... |
Posted at 23/3/2005 08:57 by tiredoldbroker Well, I shall have more to say about Griffin and possible connections to unauthorised offshore investment firms (Boiler rooms).But if you don't understand how this could impact on GFF's earnings, let me explain. GFF can only trade in the UK with FSA authorisation. The FSA has stated in the past that 'The FSA would seriously consider taking action if there was evidence to suggest that an authorised firm was involved in a business arrangement with an unauthorised firm.' GFF appears to be involved in just such an arrangement. Therefore, it is possible that the FSA could at any time stop GFF trading, or impose a financial penalty on it, because of its apparent links to boiler rooms. At the very least, the FSA could make GFF halt this presumably lucrative line of business. Any of these things would impact on earnings, and given that the Yanks seem much tougher than our own regulators, this could lead onto the US authorities questioning the continued suitability of the US arm of GFF as a participant in their markets. In other words, the whole pack of cards could come tumbling down. Now, I'm quite prepared to believe that the "clever" Mr Dean has found some sort of loophole in the FSA rules, and it may be that what GFF has been doing isn't strictly illegal. But I'm sad to see "andysand" suggesting that it is no more than "not good politics" to be linked to boiler rooms. The guys who run these operations are utter scum, sharks in human form, who will lie time and again to part you from your cash, who target the least sophisticated investors, and have no decency or the least compunction about taking someone's life savings in return for worthless shares. I think that in having any kind of link to such people, GFF shows just what sort of company it is. And far from Stephen Dean being out of the way in Spain, I'd suggest that he is fundamental to the sort of business GFF is apparently doing, and has put himself very carefully beyond the reach of the UK authorities, at an early stage in the proceedings. |
Posted at 17/1/2005 14:17 by grevis 17 January 2005Griffin Group is a broking and smaller company corporate advisory group with a difference. That difference is, that it is not exclusively engaged with the UK small cap sector. It also has an established and growing, research based, broking and small cap. corporate advisory subsidiary based in New York. The UK subsidiary under the unified management direction of Adrian Stecyk, who is familiar with both the US and UK small cap markets, will be grown not only in relation to natural domestic opportunities in the UK but also in relation to "cross border" opportunities as and when they arise. The US and UK small cap. investment and corporate advisory markets are institutionally different and present Griffin's management with the opportunity of perceiving new possibilities and insights. The company plans to grow its organic net profit this year and next, by holding administration under firm control and thus increasing net profit margins. But it also has plans for taking advantage of any UK acquisition opportunity that may present itself. Assuming that our forecasts for the group are correct the shares trade on a September 2006 PE of just 4.3 which does not appear to be demanding. Investors may have concerns that the management of this venture is yet to prove itself sufficiently or not understand the acquisition strategy. A change in perception could prompt a re-rating. Key Data EPIC GFF Share Price 5.5p Spread 5 - 6p NMS 5000 Market Cap. 2.23 million 12 Month Range 3-7.5p Shares Issued 40.5 million Market AIM Website GriffinSecurities.co Sector Financial Services NAV Per Share 4.3p Net Cash 560,000 pounds Gearing NA Interest Cover NA Contact FD: Vince Nicholls 01732 838877 Background Griffin Group was admitted to an AIM listing in December 2003 when it changed its name from Cater Barnard USA to Griffin Group plc, (derived from the name of the company's US subsidiary Griffin Securities Inc.) Cater Barnard USA, previously listed on Ofex, was the direct business predecessor of Griffin, undertaking comparable business under the same management. The trans-Atlantic span of the Griffin Group business model is reminiscent in its own way of the memorable corporate motto and logo " a company from over here doing rather well over there". Griffin is a UK registered Company, listed on AIM: with a growing early stage one hundred per cent owned New York investment banking subsidiary known as Griffin Securities Inc. (www.griffinsecuriti Dean, aged 54, attracts his fair share of criticism as well as admiration. His critics will point to things that have not performed as well as expected but his admirers will point to his energy, creativity and spirit of enterprise. He started his business life in contract building, founding Deane & Bowes Group in 1977 and serving as an executive director of the company 1991 -1995. In 1993 he extended his business interests into property development and property maintenance with the foundation of a new business, the Dean Corporation, admitted to the Official List of the London Stock Exchange in 1997 and in 1998, de-merged its housebuilding business into Artisan (UK) plc, an AIM listed company which he chaired until 2002. He has held non-executive directorships of companies engaged in telephony service, leisure, software consultancy and financial services. In 2000 he acquired in a personal capacity eighty per cent of the equity of the small investment banking business of Griffin Securities in New York under the management of the equally enterprising 44 year old Adrian Stecyk. It is Steyck who is now the driving force behind this business and as the market takes that on board, some of Dean's critics may look at the business more objectively. In 2002 that ownership was increased to one hundred per cent of the equity. Griffin Securities inc was reversed into Griffin Group plc as its one and only operating company. In a manoeuvre that has become a hallmark of the group's business style, Griffin Group (then known as Cater Barnard USA) was in turn reversed into an Ofex company which in due time migrated to an AIM listing in December 2003. That AIM listing was accompanied by a 300,000 pounds (net) fundraising. The cash was used to expand Griffin Securities Inc. The company had some months previously set up a UK investment banking subsidiary known as Griffin Securities (UK) Limited. In March 2004 a further 225,000 pounds was raised by the issue of convertible loan notes to finance the growth of the UK arm. Operations/Products Griffin Securities Inc. provides the following client services from its offices at 17 State Street New York, NY: investment research; investment banking; corporate finance and stock broking. The firm specialises in providing equity capital and financial advice and services to small cap public and private companies; investment research of small cap. public companies; share dealing and asset management. It has a client network of institutional and accredited investors. On its own behalf its also conducts proprietary share trading activities. As an early stage small investment banking enterprise with limited physical resources (a total of eleven employees) Griffin Securities operates under a clearly defined business plan and philosophy which dictates the model of business pursued by the company. A small balance sheet (reviewed below) and limited staff numbers dictate that capital and regulatory intensive activities like market making (as opposed to proprietary trading which is more lightly supervised) are both impractical and inappropriate activities for Griffin in New York - and indeed anywhere. Success in market making requires considerable liquid financial assets and staff to fulfil numerous regulatory functions. The company needs to concentrate as much of its resources as possible on front line commercial revenue accruing objectives. Consequently, there are three defined revenue streams: fee income and brokerage and proprietary trading profits, reflecting the realities and resources available. In its market segment choices, Griffin Securities Inc. has understandably chosen to provide service to and in connection with small companies; a market segment which has given Griffin enough elbow room to enter the investment market. The sub $100 million market cap sector provides plenty of good companies with attractive products and prospects capable of discovery through penetrating, value driven, sensible analysis. Griffin Securities Inc has narrowed and increased its chances of success by focussing its research and analysis on biotechnology and technology markets; sectors perceived as difficult and to which a successful research department can win clients by adding value. CEO Adrian Stecyk has made the role of company research more than a product and the means by which the company earns its reputation and as the route to the small market cap. corporate services sector as well. Investment research is in short both a mainline product service for investors and also, with quality and success in identifying companies as investments, a marketing tool in the corporate and asset management segments as well. It is not used as a primary fee earner by charges per copy as has become the convention in the last few years. Its value is instead seen as a "calling card" with which it can demonstrate Griffin's ability to bring value to potential corporate clients. By way of illustration, it has recently produced telling research on Auto Data Network (OTCBB: ADNW) a software business; Hemispherix Biopharma (AMEX:HEB) a drug development company and Point Therapeutics (NASDAQSC:POTP) etc. Griffin Securities has a well qualified (MBA and first degree in economics) and experienced (twenty years) Director of research by the name of Chrystyna Bedrij. Her department is budgeted for growth. Griffin Securities UK was established in April 2004 and is still largely, but not wholly, in the early stages of its development. The objective is to establish an indigenous UK private client broking/investment banking firm in the UK. It will broadly offer in the UK the kinds of services now offered from New York by Griffin Securities inc. to a comparable UK client base of private investors and small cap. corporate customers. These will focus largely on the AIM market and its regulatory framework which will make operations to that extent, distinct from those in the US. The difference in small cap market culture is expected will give Griffin Group something of a creative edge to its operations. The UK and US operations come under the overall management direction of Adrian Stecyk who will seek to develop each centre in relation to local resources and market opportunities but leveraging that when and where possible with trans New York/London insight and deal making opportunities as they arise. Ideally, Griffin would like to acquire an established UK private broker. Meantime the company will build its own brokerage base recruiting staff with the right kind of skills and experience. To date, Griffin Securities UK has actively pursued a policy of acquiring AIM shell companies into which selected private businesses have been reversed. It is a style of small cap corporate business that appears to make the best economic use of the AIM market. Griffin Securities UK takes significant investment in AIM listed shells and builds capital and shareholder funds by taking profits when the opportunity arises. Stephen Dean and Griffin Finance Director Vincent Nicholls FCA are the authors of these operations in the UK. Our estimate of such investments and the number of shares held in each are supplied as an addendum after the balance sheet summary at the bottom of this report. Management Arian Stecyk, established Griffin Securities Inc. in 1997. He is now the Chief Executive of the entire group with responsibility for also building up the UK company with the support of Finance Director Vincent Nicholls, a qualified and practicing UK Chartered Accountant, and the UK Chairman Stephen Dean. With a first degree in aero engineering and an MBA from Boston University, Stecyk has both US NASD approval and UK FSA recognition as an approved person. Opportunities/Threat Until now, small cap. investment banking has been a strictly local market affair. Realistically, it will largely remain that way. Nevertheless, Griffin Group is injecting a new trans-Atlantic dimension into capital raising and merger and acquisition advice for small cap companies. Griffin seeks to bring to the small cap. market something of the scope to be found in the international big corporate deals. For example, market equity capitalizations in the US are generally higher than in the UK and for the right kind of UK company, selected in relation to local investor criteria and presented in accordance with local market expectations, there is the possibility of achieving a higher valuation of its business. There will no doubt, also be deal opportunities of the reverse kind in both capital raising and in mergers and advisory business. They will also create an interesting small cap investment banking culture which should promote a cross fertilization of information, ideas and techniques. The US does not possess an equivalent of the UK AIM market where small cap. companies can begin their existence as publicly quoted companies with a clean new balance sheet. It the US, for reasons of regulation, cost and convention, private companies seeking publicly quoted status cannot reach that objective by being reversed into a quoted shell. Asset management activities are at this stage for proprietary purposes only and not a client based fee earning business of the familiar kind. That may come but not at this early stage of the group's development. Griffin has managed financial threats to its business model by firmly sticking to fee earning and brokerage commission business reducing capital and regulatory demands. It operates in a client and potential client segment defined as companies with a market cap. of about $100 million where there is considerable demand but less competition from larger investment banking competitors. Clearly, part of future profits will depend not only on profits from trading investments but also on the timing and availability of such profits: things over which the company has less control. Most Recent Results Griffin Group Plc has just published its first annual results as an AIM listed company. The company year ended 30 September 2004. Below, we present that giving a break down for each half year. (In pounds sterling except where otherwise stated). Accounting period 6 months to March 04 6 months to Sept .04 Year to 30 Sept 2004 Turnover 1,149,615 2,216,509 3,366,124 Gross profit 629,632 1,430,286 2,059,918 Administration costs (436,306) (1,059,046) (1,495,352) Group operating profit 140,452 318,366 458,818 Group operating margin 12.21% 14.36% Net interest (1,256) (3,920) Pre tax profit 139, 196 314,446 458,818 Taxation (696) (120,931) (121,627) Attributable profit 138,500 193,515 332,015 Basic EPS (p) 0.45 0.48 0.93 Diluted EPS (p) 0.45 0.48 0.93 Turnover for the year of £3,366,124 was reported as being 412% higher than in 2003. Second half turnover rose 92.8 % over first half. On the same bases of comparison, annual operating profit rose tenfold over 2003 and the second half rose 126.7% over the first half; Net attributable profit rose eightfold over 2003 and the second half rose 40 % over the first half attributable profit. During the year the Group raised £78 million of new equity for its clients either directly or by participation in syndicates. In relation to the latter £41 million was raised with Deutsche Bank for Cypress Biosciences and in conjunction US brokers A.G. Edwards £13 million for company 8x8. To its broking business Griffin added high margin placing transactions in relation to shares where dealing is restricted by regulation. £10 million of such equity was placed. In the second half of the year, founder share capital was found for five AIM flotations and board control obtained in connection with a sixth Aim company. Advisory fees of £5 million were earned. New AIM admissions included: Metrocapital; Techreation; Euro Capital Projects; Tower and Pearl Street Holdings. During the year, in August, Griffin Investment Management LLC was established in the US. It will manage a newly formed "crossover" fund where investments are selected at what is perceived to be a take off stage. That is the purchase of equity in public companies at an observed inflexion point that is foreseen to be a catalyst for growth. Balance Sheet & Cashflow Total assets and shareholder funds of Griffin Group Plc as at autumn 2004 were valued at £1,700, 375 (up 78.7% year on year). Current assets of £2,299,609 comprised 31% cash; 41% investments (approximately two thirds US listed shares and one third UK listed shares) and the balance in the form of debtor accounts. There was short term debt comprising £225,000 of convertible loan notes repayable 15 March 2005, and no bank overdraft. The balance were trade and government agency creditors of the usual kinds. The ratio short term assets over short term liabilities was 2.1. The ratio of cash and near cash over short creditors was 1.7. There were no long term creditor accounts or items payable beyond one year. Shareholder funds of £1,700,375 was net a profit and loss account deficit of £831,778 - down 28.5% from the previous year's deficit of £1,162,637. Balance sheet assets attributable to shareholders were worth 4.3p a share over the 39,483,629 (5p nominal) shares in issue as at 30 September 2004. During the year to 30 September 2004 net cash inflow from operating activities was £35,374. Net cash flow before financial activities was £23,316. Finance brought in £642,962 net and there was a post finance cash inflow of £666,278. Cash in the balance sheet stood at £711,500. Since the year end, on January 5th, the company has raised another 77,000 by issuing 1.19 million shares at 5p. Profits - Forecasts Period Year to Sept 30 04 (A) Year to Sept 30 05(E) Year to Sept 30 06(E) Revenue 3,310,000 7,500,000 8,000,000 Gross margin 62% 60% 60% Gross profit 2,060,000 4,500,000 4,800,000 Administration costs 1,607,000 3,850,000 3,950,000 Operating profit 453,000 650,000 850,000 Net interest - - - Pre tax profit 453,000 650,000 850,000 Taxation at 40% 122,000 260,000 340,000 Attributable net profit 333,000 390,000 510,000 EPS 0.93p 0.96p* 1.27p* *Based on shares in issue of 40.5 million Shareholders As at 1 December 2004 the three largest holders of Griffin Group equity were: Shareholder. Number of shares Percentage of total Adrian Steyck 9,862,349 24.35% Global Investments (Stephen Dean) 6,460,294 15.95% Vincent Nicholls 1,100,000 2.72% Valuation Our profit forecasts are based on organic growth of the existing business. Any acquisition in the UK will of course alter prospects. A key assumption underpinning our earnings estimates is that as Griffin Group expands revenue it will be able to fulfil its stated intention to hold administration costs under firm control in both absolute terms and in relation to revenue. Consequently, our forecasts reflect that, allowing for only a small increase in administration costs next year in relation to this current year. We also assume a continuation of a 60% gross margin throughout the forecast period and a tax charge of 40%. We think that the assumed gross margin and tax charge are a little on the conservative side. At the current market share price of 5.5p the shares sell on 5.7 times our estimated earnings for this year and 4.3 times our estimates for next. Griffin is a small company operating on a large international stage in cyclical markets which offer both dangers as well as opportunities. A prospective price to earnings ratio of 5.7 falling to 4.3 allows scope for share price appreciation from this level as the company demonstrates that it is able to achieve its strategic and financial goals over the next twenty one months to 30 September 2006. We show the last balance sheet as at 30 September 2004, below. That gives shareholder funds valued at £1.7 million and includes UK investments valued at £323,983. The market value of those same holdings as at 30 December 2004 appears to be close to £560,000. Except that Pearl Street Holdings was sold for a trading profit, at 4p a share. Making an adjustment for that fact, increases the notional value of those balance sheet investments by £119,000 to an adjusted value of £679,000. Investments as we estimate them to be at year end 2004, are included at an addendum to the balance sheet summary below. Detailed Financials Profit & Loss Account Year to 30 September 2002(A) 2003(A) 2004(A) Turnover 383,829 657,535 3,310569 Operating profit (186,752) 41,574 458,818 Profit (loss) on ordinary activities (1,619,.082) 41,737 453,642 Taxation 21,709 nil (121,627) Net retained profits (1,597,373) 41,737 332,015 Cashflow Statement Year to 30 Sept 2002(A) 2003(A) 2004(A) Cash from operations 311,708 59,852 35,374 After investment and finance costs 298,835 60,015 30,198 Capital expenditure and investment (10,782) (2,057) (6,882) Acquisitions/disposa Net cash inflow/(outflow) before financing (16,232) (305,014) 23,316 Net cash from financing 2,500 332,412 642,962 Increase in cash (13,732) 27,398 666,278 Balance Sheet Year to 30 Sept 2002(A) 2003(A) 2004(A) Intangible fixed assets 789,952 684,204 578,456 Tangible fixed assets 13,456 11,183 6,281 Total fixed assets 803,408 695,387 584,737 Investments - 365,245 946,428* Debtors 136,370 82,059 641,681 Cash at bank and in hand 17,824 48,673 711,500 Total current assets 154,194 495,977 2,299,609 Amounts due within one year: a) Convertible loans - - (225.000) b) Other (380,197) (239,810) (958,971) Net assets 577,405 951,554 1,700,375 CAPITAL & RESERVES a) Called up share capital 966,769 1,299,181 1,974,181 b) Share premium account 815,010 815,010 557,972 c) Profit & loss (1,204,374) (1,162,637) (831,778) SHAREHOLDER FUNDS 577,405 951,554 1,700,375 *UK investments, itemized, as we believed them to be 30 December 2004. Investment by name. Number of ordinary shares held by Griffin Group. Elite Strategies (ETS) AIM 170,000,000 Euro Capital Project (ECR) AIM 363,000 Libertas Capital Group (LBR) AIM 290,000 Interbulk Investments 5,000,000 City Financial Associates (CFA) AIM 60,000,000 |
Posted at 17/1/2005 14:11 by grevis 17 January 2005Griffin Group is a broking and smaller company corporate advisory group with a difference. That difference is, that it is not exclusively engaged with the UK small cap sector. It also has an established and growing, research based, broking and small cap. corporate advisory subsidiary based in New York. The UK subsidiary under the unified management direction of Adrian Stecyk, who is familiar with both the US and UK small cap markets, will be grown not only in relation to natural domestic opportunities in the UK but also in relation to "cross border" opportunities as and when they arise. The US and UK small cap. investment and corporate advisory markets are institutionally different and present Griffin's management with the opportunity of perceiving new possibilities and insights. The company plans to grow its organic net profit this year and next, by holding administration under firm control and thus increasing net profit margins. But it also has plans for taking advantage of any UK acquisition opportunity that may present itself. Assuming that our forecasts for the group are correct the shares trade on a September 2006 PE of just 4.3 which does not appear to be demanding. Investors may have concerns that the management of this venture is yet to prove itself sufficiently or not understand the acquisition strategy. A change in perception could prompt a re-rating. Key Data EPIC GFF Share Price 5.5p Spread 5 - 6p NMS 5000 Market Cap. 2.23 million 12 Month Range 3-7.5p Shares Issued 40.5 million Market AIM Website GriffinSecurities.co Sector Financial Services NAV Per Share 4.3p Net Cash 560,000 pounds Gearing NA Interest Cover NA Contact FD: Vince Nicholls 01732 838877 Background Griffin Group was admitted to an AIM listing in December 2003 when it changed its name from Cater Barnard USA to Griffin Group plc, (derived from the name of the company's US subsidiary Griffin Securities Inc.) Cater Barnard USA, previously listed on Ofex, was the direct business predecessor of Griffin, undertaking comparable business under the same management. The trans-Atlantic span of the Griffin Group business model is reminiscent in its own way of the memorable corporate motto and logo " a company from over here doing rather well over there". Griffin is a UK registered Company, listed on AIM: with a growing early stage one hundred per cent owned New York investment banking subsidiary known as Griffin Securities Inc. (www.griffinsecuriti Dean, aged 54, attracts his fair share of criticism as well as admiration. His critics will point to things that have not performed as well as expected but his admirers will point to his energy, creativity and spirit of enterprise. He started his business life in contract building, founding Deane & Bowes Group in 1977 and serving as an executive director of the company 1991 -1995. In 1993 he extended his business interests into property development and property maintenance with the foundation of a new business, the Dean Corporation, admitted to the Official List of the London Stock Exchange in 1997 and in 1998, de-merged its housebuilding business into Artisan (UK) plc, an AIM listed company which he chaired until 2002. He has held non-executive directorships of companies engaged in telephony service, leisure, software consultancy and financial services. In 2000 he acquired in a personal capacity eighty per cent of the equity of the small investment banking business of Griffin Securities in New York under the management of the equally enterprising 44 year old Adrian Stecyk. It is Steyck who is now the driving force behind this business and as the market takes that on board, some of Dean's critics may look at the business more objectively. In 2002 that ownership was increased to one hundred per cent of the equity. Griffin Securities inc was reversed into Griffin Group plc as its one and only operating company. In a manoeuvre that has become a hallmark of the group's business style, Griffin Group (then known as Cater Barnard USA) was in turn reversed into an Ofex company which in due time migrated to an AIM listing in December 2003. That AIM listing was accompanied by a 300,000 pounds (net) fundraising. The cash was used to expand Griffin Securities Inc. The company had some months previously set up a UK investment banking subsidiary known as Griffin Securities (UK) Limited. In March 2004 a further 225,000 pounds was raised by the issue of convertible loan notes to finance the growth of the UK arm. Operations/Products Griffin Securities Inc. provides the following client services from its offices at 17 State Street New York, NY: investment research; investment banking; corporate finance and stock broking. The firm specialises in providing equity capital and financial advice and services to small cap public and private companies; investment research of small cap. public companies; share dealing and asset management. It has a client network of institutional and accredited investors. On its own behalf its also conducts proprietary share trading activities. As an early stage small investment banking enterprise with limited physical resources (a total of eleven employees) Griffin Securities operates under a clearly defined business plan and philosophy which dictates the model of business pursued by the company. A small balance sheet (reviewed below) and limited staff numbers dictate that capital and regulatory intensive activities like market making (as opposed to proprietary trading which is more lightly supervised) are both impractical and inappropriate activities for Griffin in New York - and indeed anywhere. Success in market making requires considerable liquid financial assets and staff to fulfil numerous regulatory functions. The company needs to concentrate as much of its resources as possible on front line commercial revenue accruing objectives. Consequently, there are three defined revenue streams: fee income and brokerage and proprietary trading profits, reflecting the realities and resources available. In its market segment choices, Griffin Securities Inc. has understandably chosen to provide service to and in connection with small companies; a market segment which has given Griffin enough elbow room to enter the investment market. The sub $100 million market cap sector provides plenty of good companies with attractive products and prospects capable of discovery through penetrating, value driven, sensible analysis. Griffin Securities Inc has narrowed and increased its chances of success by focussing its research and analysis on biotechnology and technology markets; sectors perceived as difficult and to which a successful research department can win clients by adding value. CEO Adrian Stecyk has made the role of company research more than a product and the means by which the company earns its reputation and as the route to the small market cap. corporate services sector as well. Investment research is in short both a mainline product service for investors and also, with quality and success in identifying companies as investments, a marketing tool in the corporate and asset management segments as well. It is not used as a primary fee earner by charges per copy as has become the convention in the last few years. Its value is instead seen as a "calling card" with which it can demonstrate Griffin's ability to bring value to potential corporate clients. By way of illustration, it has recently produced telling research on Auto Data Network (OTCBB: ADNW) a software business; Hemispherix Biopharma (AMEX:HEB) a drug development company and Point Therapeutics (NASDAQSC:POTP) etc. Griffin Securities has a well qualified (MBA and first degree in economics) and experienced (twenty years) Director of research by the name of Chrystyna Bedrij. Her department is budgeted for growth. Griffin Securities UK was established in April 2004 and is still largely, but not wholly, in the early stages of its development. The objective is to establish an indigenous UK private client broking/investment banking firm in the UK. It will broadly offer in the UK the kinds of services now offered from New York by Griffin Securities inc. to a comparable UK client base of private investors and small cap. corporate customers. These will focus largely on the AIM market and its regulatory framework which will make operations to that extent, distinct from those in the US. The difference in small cap market culture is expected will give Griffin Group something of a creative edge to its operations. The UK and US operations come under the overall management direction of Adrian Stecyk who will seek to develop each centre in relation to local resources and market opportunities but leveraging that when and where possible with trans New York/London insight and deal making opportunities as they arise. Ideally, Griffin would like to acquire an established UK private broker. Meantime the company will build its own brokerage base recruiting staff with the right kind of skills and experience. To date, Griffin Securities UK has actively pursued a policy of acquiring AIM shell companies into which selected private businesses have been reversed. It is a style of small cap corporate business that appears to make the best economic use of the AIM market. Griffin Securities UK takes significant investment in AIM listed shells and builds capital and shareholder funds by taking profits when the opportunity arises. Stephen Dean and Griffin Finance Director Vincent Nicholls FCA are the authors of these operations in the UK. Our estimate of such investments and the number of shares held in each are supplied as an addendum after the balance sheet summary at the bottom of this report. Management Arian Stecyk, established Griffin Securities Inc. in 1997. He is now the Chief Executive of the entire group with responsibility for also building up the UK company with the support of Finance Director Vincent Nicholls, a qualified and practicing UK Chartered Accountant, and the UK Chairman Stephen Dean. With a first degree in aero engineering and an MBA from Boston University, Stecyk has both US NASD approval and UK FSA recognition as an approved person. Opportunities/Threat Until now, small cap. investment banking has been a strictly local market affair. Realistically, it will largely remain that way. Nevertheless, Griffin Group is injecting a new trans-Atlantic dimension into capital raising and merger and acquisition advice for small cap companies. Griffin seeks to bring to the small cap. market something of the scope to be found in the international big corporate deals. For example, market equity capitalizations in the US are generally higher than in the UK and for the right kind of UK company, selected in relation to local investor criteria and presented in accordance with local market expectations, there is the possibility of achieving a higher valuation of its business. There will no doubt, also be deal opportunities of the reverse kind in both capital raising and in mergers and advisory business. They will also create an interesting small cap investment banking culture which should promote a cross fertilization of information, ideas and techniques. The US does not possess an equivalent of the UK AIM market where small cap. companies can begin their existence as publicly quoted companies with a clean new balance sheet. It the US, for reasons of regulation, cost and convention, private companies seeking publicly quoted status cannot reach that objective by being reversed into a quoted shell. Asset management activities are at this stage for proprietary purposes only and not a client based fee earning business of the familiar kind. That may come but not at this early stage of the group's development. Griffin has managed financial threats to its business model by firmly sticking to fee earning and brokerage commission business reducing capital and regulatory demands. It operates in a client and potential client segment defined as companies with a market cap. of about $100 million where there is considerable demand but less competition from larger investment banking competitors. Clearly, part of future profits will depend not only on profits from trading investments but also on the timing and availability of such profits: things over which the company has less control. Most Recent Results Griffin Group Plc has just published its first annual results as an AIM listed company. The company year ended 30 September 2004. Below, we present that giving a break down for each half year. (In pounds sterling except where otherwise stated). Accounting period 6 months to March 04 6 months to Sept .04 Year to 30 Sept 2004 Turnover 1,149,615 2,216,509 3,366,124 Gross profit 629,632 1,430,286 2,059,918 Administration costs (436,306) (1,059,046) (1,495,352) Group operating profit 140,452 318,366 458,818 Group operating margin 12.21% 14.36% Net interest (1,256) (3,920) Pre tax profit 139, 196 314,446 458,818 Taxation (696) (120,931) (121,627) Attributable profit 138,500 193,515 332,015 Basic EPS (p) 0.45 0.48 0.93 Diluted EPS (p) 0.45 0.48 0.93 Turnover for the year of £3,366,124 was reported as being 412% higher than in 2003. Second half turnover rose 92.8 % over first half. On the same bases of comparison, annual operating profit rose tenfold over 2003 and the second half rose 126.7% over the first half; Net attributable profit rose eightfold over 2003 and the second half rose 40 % over the first half attributable profit. During the year the Group raised £78 million of new equity for its clients either directly or by participation in syndicates. In relation to the latter £41 million was raised with Deutsche Bank for Cypress Biosciences and in conjunction US brokers A.G. Edwards £13 million for company 8x8. To its broking business Griffin added high margin placing transactions in relation to shares where dealing is restricted by regulation. £10 million of such equity was placed. In the second half of the year, founder share capital was found for five AIM flotations and board control obtained in connection with a sixth Aim company. Advisory fees of £5 million were earned. New AIM admissions included: Metrocapital; Techreation; Euro Capital Projects; Tower and Pearl Street Holdings. During the year, in August, Griffin Investment Management LLC was established in the US. It will manage a newly formed "crossover" fund where investments are selected at what is perceived to be a take off stage. That is the purchase of equity in public companies at an observed inflexion point that is foreseen to be a catalyst for growth. Balance Sheet & Cashflow Total assets and shareholder funds of Griffin Group Plc as at autumn 2004 were valued at £1,700, 375 (up 78.7% year on year). Current assets of £2,299,609 comprised 31% cash; 41% investments (approximately two thirds US listed shares and one third UK listed shares) and the balance in the form of debtor accounts. There was short term debt comprising £225,000 of convertible loan notes repayable 15 March 2005, and no bank overdraft. The balance were trade and government agency creditors of the usual kinds. The ratio short term assets over short term liabilities was 2.1. The ratio of cash and near cash over short creditors was 1.7. There were no long term creditor accounts or items payable beyond one year. Shareholder funds of £1,700,375 was net a profit and loss account deficit of £831,778 - down 28.5% from the previous year's deficit of £1,162,637. Balance sheet assets attributable to shareholders were worth 4.3p a share over the 39,483,629 (5p nominal) shares in issue as at 30 September 2004. During the year to 30 September 2004 net cash inflow from operating activities was £35,374. Net cash flow before financial activities was £23,316. Finance brought in £642,962 net and there was a post finance cash inflow of £666,278. Cash in the balance sheet stood at £711,500. Since the year end, on January 5th, the company has raised another 77,000 by issuing 1.19 million shares at 5p. Profits - Forecasts Period Year to Sept 30 04 (A) Year to Sept 30 05(E) Year to Sept 30 06(E) Revenue 3,310,000 7,500,000 8,000,000 Gross margin 62% 60% 60% Gross profit 2,060,000 4,500,000 4,800,000 Administration costs 1,607,000 3,850,000 3,950,000 Operating profit 453,000 650,000 850,000 Net interest - - - Pre tax profit 453,000 650,000 850,000 Taxation at 40% 122,000 260,000 340,000 Attributable net profit 333,000 390,000 510,000 EPS 0.93p 0.96p* 1.27p* *Based on shares in issue of 40.5 million Shareholders As at 1 December 2004 the three largest holders of Griffin Group equity were: Shareholder. Number of shares Percentage of total Adrian Steyck 9,862,349 24.35% Global Investments (Stephen Dean) 6,460,294 15.95% Vincent Nicholls 1,100,000 2.72% Valuation Our profit forecasts are based on organic growth of the existing business. Any acquisition in the UK will of course alter prospects. A key assumption underpinning our earnings estimates is that as Griffin Group expands revenue it will be able to fulfil its stated intention to hold administration costs under firm control in both absolute terms and in relation to revenue. Consequently, our forecasts reflect that, allowing for only a small increase in administration costs next year in relation to this current year. We also assume a continuation of a 60% gross margin throughout the forecast period and a tax charge of 40%. We think that the assumed gross margin and tax charge are a little on the conservative side. At the current market share price of 5.5p the shares sell on 5.7 times our estimated earnings for this year and 4.3 times our estimates for next. Griffin is a small company operating on a large international stage in cyclical markets which offer both dangers as well as opportunities. A prospective price to earnings ratio of 5.7 falling to 4.3 allows scope for share price appreciation from this level as the company demonstrates that it is able to achieve its strategic and financial goals over the next twenty one months to 30 September 2006. We show the last balance sheet as at 30 September 2004, below. That gives shareholder funds valued at £1.7 million and includes UK investments valued at £323,983. The market value of those same holdings as at 30 December 2004 appears to be close to £560,000. Except that Pearl Street Holdings was sold for a trading profit, at 4p a share. Making an adjustment for that fact, increases the notional value of those balance sheet investments by £119,000 to an adjusted value of £679,000. Investments as we estimate them to be at year end 2004, are included at an addendum to the balance sheet summary below. Detailed Financials Profit & Loss Account Year to 30 September 2002(A) 2003(A) 2004(A) Turnover 383,829 657,535 3,310569 Operating profit (186,752) 41,574 458,818 Profit (loss) on ordinary activities (1,619,.082) 41,737 453,642 Taxation 21,709 nil (121,627) Net retained profits (1,597,373) 41,737 332,015 Cashflow Statement Year to 30 Sept 2002(A) 2003(A) 2004(A) Cash from operations 311,708 59,852 35,374 After investment and finance costs 298,835 60,015 30,198 Capital expenditure and investment (10,782) (2,057) (6,882) Acquisitions/disposa Net cash inflow/(outflow) before financing (16,232) (305,014) 23,316 Net cash from financing 2,500 332,412 642,962 Increase in cash (13,732) 27,398 666,278 Balance Sheet Year to 30 Sept 2002(A) 2003(A) 2004(A) Intangible fixed assets 789,952 684,204 578,456 Tangible fixed assets 13,456 11,183 6,281 Total fixed assets 803,408 695,387 584,737 Investments - 365,245 946,428* Debtors 136,370 82,059 641,681 Cash at bank and in hand 17,824 48,673 711,500 Total current assets 154,194 495,977 2,299,609 Amounts due within one year: a) Convertible loans - - (225.000) b) Other (380,197) (239,810) (958,971) Net assets 577,405 951,554 1,700,375 CAPITAL & RESERVES a) Called up share capital 966,769 1,299,181 1,974,181 b) Share premium account 815,010 815,010 557,972 c) Profit & loss (1,204,374) (1,162,637) (831,778) SHAREHOLDER FUNDS 577,405 951,554 1,700,375 *UK investments, itemized, as we believed them to be 30 December 2004. Investment by name. Number of ordinary shares held by Griffin Group. Elite Strategies (ETS) AIM 170,000,000 Euro Capital Project (ECR) AIM 363,000 Libertas Capital Group (LBR) AIM 290,000 Interbulk Investments 5,000,000 City Financial Associates (CFA) AIM 60,000,000 |
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