Share Name Share Symbol Market Type Share ISIN Share Description
Griffin Group LSE:GFF London Ordinary Share GB0009530188 ORD 0.1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 0.625p 0.00p 0.00p - - - 0 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
- - - - 0.68

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Date Time Title Posts
24/12/200815:33The next 300% share? Griffin PLC P/E of 5!176
15/3/200612:00Griffin Group Garotted-
21/12/200509:12Griffin Group34
18/12/200507:32The Dean factor, why you should avoid this stock2
30/11/200521:30Griffin Group44

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DateSubject
26/9/2016
09:20
Griffin Daily Update: Griffin Group is listed in the sector of the London Stock Exchange with ticker GFF. The last closing price for Griffin was 0.63p.
Griffin Group has a 4 week average price of - and a 12 week average price of -.
The 1 year high share price is - while the 1 year low share price is currently -.
There are currently 109,191,573 shares in issue and the average daily traded volume is 0 shares. The market capitalisation of Griffin Group is £682,447.33.
09/9/2007
16:06
markt: JakNife do you think that the placings....is a way for the dirs. to increase their stake in the company....in 1 go... and then jiggle the numbers to get the share price up....ie. load up with shares before pumping up the share price ?? Any views ?
06/3/2007
13:09
25cent: Griffin Group (LSE: GFF) Griffin Group at first sight is the best value share on the market: Historic PE = 2.1 Discount to tangible net assets = 61% Earnings per share (EPS) up 135% in the year to 30-9-2006 Directors own 25% of company Four years of profitability The FD bought 1m shares at 3.25p in November The company creates investment companies and floats them on Plus Markets (was Ofex). What can possibly be so bad that I haven't bought a shed-load? The answer lies in the directors' remuneration in the Annual Accounts. The most recent (2005) show that the Chairman, Stephen Dean earned £84,000 and the FD Vince Nicholls £48,000. However their bonuses were £2.7m and £591,000 respectively. Total directors' remuneration was £3.6m. This was more than six times pre-tax profits and 34% of turnover. The company will not reveal the bonus formula, but it's been approved by the remuneration committee, so it must be OK, right? This brings us to my favourite sentence in the Accounts. 'The Remuneration Committee currently consists of Stephen Dean, Chairman.' Turnover fell by 2% in 2006, and gross profit by 12%, so how did EPS rise 135%? Administrative expenses fell by £0.65m. The bonuses are not revealed in the preliminary results, so we'll have to wait for the 2006 Accounts to see why. There is no broker forecast for 2007 and since the bonus plan is a secret, visibility of earnings is rock bottom. Even its paid-for analyst, Growth Equities & Company Research, says: 'The credibility of this company's management is not high.' I still keep looking at the PE and asset discount. They are at crazy levels even with the unsatisfactory director payments. The directors could make the share price jump if they wanted to by cutting their bonuses. However, capitalisation of Griffin Group is a tiny £0.9m, so Dean and Nicholl's holdings are worth only 7% of their 2005 pay-packet. A rise in the share price is small beer compared to their bonuses. (From m.f)
03/1/2007
14:42
jaknife: Take a look at the history of other Stephen Dean companies and you will probably change your mind. The main operating entity in the UK was known as Cater Barnard, and had net assets of circa 10p a share. Then one day Deano suddenly announced a hugely dilutive share issue to himself at a price of a mere 1p, the share price collapsed over 90%. Leopards do not change their spots.
23/11/2006
18:10
markt: In reply to QS9 ..they control the company...and can do what they want when they want.... if they have over charged for own services/labour then that cash is in their pockets so they have not lost out.... ..and they could decide to concentrate on increasing the share price at the time that suits them best..... (in my view it does look underpriced, being at 50% of NAV......but the director doubts are not a good factor...) ----- But then many companies or directors do questionable things... -Arlington (honesty of MD changing warrants exercising conditions for his millions of warrants, linked/timed to large payments at same time to 2 other directors, esp. 1, 500K pnds....a sweetner ??) - false accounts from many companies which caused share price falls or collapses. Shell (oil reserves), Regent Inns, SFI Group - payments to directors and ex-directors. eg. Marks and Spencers The LSE and AIM are owned by brokers, so inherently will never be that zealous on regulating or punishing themselves. They make money from the flow of stocks and shares; as long as shares keep moving then they make money. If companies die and new ones appear...or any false accounts..it is not a big deal for them as long as there is enough confidence that people are willing to buy and sell shares. (and the FSA etc probably play squash at the same London clubs as the brokers.....FSA never has had many teeth..... pensions miselling fraud, Maxwell Pension fund, split funds fraud, Equitable Life collapse etc etc Daily Mail share pump/dump (editor not punished).....they always seem to arrive AFTER the problem happens and people lose their savings, ie. the FSA does not work)
19/11/2006
19:36
qs9: Have heard that......... surely with their shares it would be better to take a big pay cut (which is taxed at 40%) and lower the bonuses, get the profits really motoring and therefore the share price, have a share price nearer 20p and a market cap that then reflected the underlying value of the company....they would be able to entertain corporate activity and possibly offload some stock as the supporters came in.....offloading at a 10% taper relief tax rate........ must have cotton wool between the ears....
15/3/2006
12:00
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 http://boards.fool.co.uk/Message.asp?mid=9722324 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: http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=396298 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: http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=396298 http://www.thisismoney.co.uk/news/columnists/article.html?&in_article_id=397988 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: http://www.companyannouncements.net/cgi-bin/articles/200312120800101823T.html 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: http://www.companyannouncements.net/cgi-bin/articles/200512161529248212V.html 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
17/12/2005
23:11
jaknife: 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: http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=396298 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: http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=396298 http://www.thisismoney.co.uk/news/columnists/article.html?&in_article_id=397988 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: http://www.companyannouncements.net/cgi-bin/articles/200312120800101823T.html 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: http://www.companyannouncements.net/cgi-bin/articles/200512161529248212V.html 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 using: Jak dot nife at virgin dot net and I will endeavour to make whatever corrections are necessary. regards JakNife
16/12/2005
16:12
rarther: Final Results RNS Number:8212V Griffin Group PLC 16 December 2005 GRIFFIN GROUP plc ("Griffin" or the "Company") PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 Financial highlights: * Turnover up 220% to #10.58m (2004: #3.31m) * Net Profit before exceptional items up 107% to #938,597 (2004: #453,642) * Goodwill impairment write off amounting to #372,712 treated as exceptional item * Earnings per share before exceptional items up 48% to 1.38p (2004: 0.93p) * Net current assets #2,557,016 (2004: #1,115,638) including cash at bank of #904,451 and publicly tradable investments of #925,152 * Net assets #1,913,909 (2004: #1,700,375) equivalent to 4.71p per share (2004: 4.3p) * UK operations continued to be buoyant achieving six new AIM admissions and completed a number of corporate transactions * US operations have continued to struggle in difficult market conditions in their sector resulting in a trading loss of #65,591 before goodwill amortisation of #105,744 and the exceptional goodwill impairment write off of #372,712 * Disposal of the US operations to the US management team completed shortly after the year end date CHAIRMAN'S STATEMENT I am pleased to be able to report another year of record results for the Group reflecting a further significant improvement in the performance of the Group during this last financial year. In the year ended 30 September 2005, turnover increased 220 per cent. to #10,585,325 (2004: #3,310,569) as a result of an increase in completed transactions in the period. Administrative costs rose as a result of the additional business at #4,426,320 (2004: #1,495,352). Net profit before taxation and the exceptional goodwill write off amounted to #938,597 (2004: #453,642) and earnings per share (excluding the exceptional goodwill write off) amounted to 1.38p (2004: 0.93p). Shareholders' funds increased to #1,913,909 (2004: #1,700,375) equivalent to 4.71p per share. The Directors do not propose to declare a dividend (2004: nil). At the end of the year, the Company had cash on hand of #904,451 and investments held as short term stock of #925,152. Griffin Corporate Finance Limited ("Griffin UK") Griffin UK has undertaken ten corporate transactions in the year and established six new AIM flotations and one Ofex flotation. The corporate transactions and publicly floated companies cover various industry sectors. The corporate finance fee income amounted to #3.16 million and trading of investments totalled #5.8 million. The new AIM and Ofex admissions promoted by Griffin UK are as follows: Interbulk Investments plc Initial investment into an intermodal transport business Ionian Estates plc Initial investment into a Croatia property development business Process Handling plc Initial investment into an international pneumatic conveying solutions business Euro Investment Fund plc Initial investment into a specialist packaging business providing a Child Resistant Senior Friendly solution to the pharmaceutical industry Croatia Ventures plc Under new management Nanotech Energy plc Under new management Firenze Ventures plc Just admitted to Ofex at the year end Griffin UK's policy is not to maintain large long-term holdings in these companies and, whilst a management agreement exists whereby Griffin provides administrative support to these new AIM companies, Griffin UK looks to input appropriate new executives into these companies at an early opportunity, once the strategic direction of each company is determined. Griffin Securities Inc ("Griffin US") Your Company has today completed the disposal of the US subsidiaries and trading operations to the US management team. The disposal is effective from 1 October 2005 and the disposal proceeds were $825,885 all payable in cash on completion. The disposal proceeds represent the net assets disposed of plus $200,000 goodwill. Trading performance in the US operations has been disappointing and lacks the growth potential that your Board is seeking for the Group. The results of the US operations in recent years are set out below: 2005 2004 2003 # # # Turnover 1,563,826 1,681,627 396,452 (Loss)/Profit before taxation and goodwill amortisation (65,591) 140,600 (222,212) Goodwill amortisation (105,744) (105,748) (105,748) Goodwill impairment write down (372,712) - - (Loss)/Profit before taxation (544,047) 34,852 (327,960) The board has decided that it was in the best interests of the Company to dispose of the US operations due to the lack of potential growth and profits from the US business, to ensure management time remained focused on the profitable operations in the UK and to obtain an inflow of funds from the disposal of the US operations by converting the US balance sheet assets into cash. At the same time as the disposal the US directors on the Group board, Adrian Stecyk and Chrystyna Bedrij, resigned as directors of the Company to concentrate on the management of the US operations. Your board wishes to thank them for their hard work over recent years and wishes them every success with the future trading of the US operations. No remaining members of the Group board have any interest in the US operations disposed of. Under the AIM Rules, as Adrian Stecyk and Chrystyna Bedrij are both directors of the Company and interested in this disposal, the transaction is to a related party. Accordingly the terms of the disposal have been reviewed by Stephen Dean and Vince Nicholls, the independent directors, who after consultation with the Company's Nominated Adviser, believe the terms of the disposal to be fair and reasonable insofar as the shareholders of the Company are concerned. Directors' Share Dealings and Shareholdings In relation to the disposal of the US operations, as set out above, Adrian Stecyk and Chrystyna Bedrij have today disposed of 1,305,113 ordinary shares of 5p each at 3.25p per share and no longer hold any shares in their personal names in the Company. First Financial Securities Limited, a company in which Adrian Stecyk holds a beneficial interest, has today disposed of 3,134,593 ordinary shares of 5p each at 3.25p per share and now holds 5,422,643 ordinary shares of 5p each (13.33%). Global Investments Limited, a company in which Stephen Dean holds a discretionary beneficial interest, has today acquired 1,539,706 ordinary shares of 5p each at 3.25p per share and now holds 8,000,000 ordinary shares of 5p each (19.67%). Vince Nicholls has today acquired 2,900,000 ordinary shares of 5p each at 3.25p per share and now holds 4,000,000 ordinary shares of 5p each (9.83%). Group Financial Overview During the year, the Group has achieved pre tax profits (excluding the exceptional goodwill impairment write off) of #938,597. Due to the disposal of the US operations after the year end, the goodwill in the group's balance sheet has been written down to #100,000 representing the excess over net assets achieved from the disposal. The Group's net assets as at 30 September 2005 amounted to #1,913,909 equivalent to 4.71p per share. Earnings per share (excluding the exceptional goodwill write off) have increased by 48% to 1.38p (2004: 0.93p) which, based on the current share price of 6.13p, puts the shares at a p/e of around 4.44. As at 30 September 2005, the Group's cash balances were #904,451 and the Group also held investments (publicly tradeable on markets in London and New York) at book values totalling #925,152, all held for short term disposal. The Group's only debts are the convertible loan notes totalling #925,000. #175,000 of these loans is due for repayment or conversion in March 2006. The new loans of #750,000 were entered into just before the year end date and are repayable or convertible by 28 September 2007. The cash balances at 30 September 2005 do not reflect the receipt of the new loans of #750,000 as the funds were in transit at the year end date. The Directors consider that the Group's financial position and its trading position are very satisfactory. We believe the Group's financial performance for 2005 supports the Directors' belief that the economic climate is conducive to the smaller company markets in which we operate in the UK. The Directors are actively seeking strategic opportunities for the Company. In the last year, we have increased the Group's profile, developed the UK operating business and increased shareholder value substantially. The Directors believe the current year will present substantial opportunities for the Group's future success. The employees and advisers of the Group have worked hard to achieve these record results and the Board would like to thank all of them for their continuing support and loyalty. Stephen Dean Chairman
17/1/2005
14:17
grevis: 17 January 2005 Griffin 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.com 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.griffinsecurities.com). Griffin Group Plc is largely the creation of an enterprising individual with a background of UK industrial business experience. In this case Stephen Dean who is now Chairman of Griffin Group. He has worked with the CEO Adrian Stecyk and Vince Nicholls in building up the business over recent years. Central and crucial to that development has been the building of the firm's investment research capacity and reputation, under its Director of Investment Research, Chrystyna Bedrij. 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/Threats 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/disposals (303,285) (362,972) - 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
17/1/2005
14:11
grevis: 17 January 2005 Griffin 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.com 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.griffinsecurities.com). Griffin Group Plc is largely the creation of an enterprising individual with a background of UK industrial business experience. In this case Stephen Dean who is now Chairman of Griffin Group. He has worked with the CEO Adrian Stecyk and Vince Nicholls in building up the business over recent years. Central and crucial to that development has been the building of the firm's investment research capacity and reputation, under its Director of Investment Research, Chrystyna Bedrij. 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/Threats 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/disposals (303,285) (362,972) - 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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