Updates

Davenham

August 2006

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Davenham, the asset-based lender, issued a trading statement ahead of full year results on 5 September. What cheered the market slightly was that there was no mention of arrears or bad debts so analysts now expect no material worsening. Separately, Davenham, which has historically operated in the North West, opened an office in London in order to target the South East region which has higher debt levels than the national average. Panmure Gordon forecasts eps of 28.7p for the year to be reported, with 34.3p for the current year. On that forecast, the shares are trading on a prospective PE of 8.8 and on a dividend yield of over 5%. We suggested selling some at 345p in March. Hold the rest. ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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