REG - Duke Capital - Trading and Operational Update

Duke CapitalAnnouncement

28/03/2024 07:00

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RNS Number : 6028I  Duke Capital Limited  28 March 2024

28 March 2024

Duke Capital Limited

 

("Duke Capital", "Duke" or the "Company")

 

Trading and Operational Update

 

Duke Capital Limited (AIM: DUKE), a leading provider of hybrid capital
solutions for SME business owners in Europe and North America, is pleased to
provide the following trading update for its third quarter of the financial
year ending 31 December 2023 ("Q3 FY24"), and to provide guidance on trading
for its fourth quarter ending 31 March 2024 ("Q4 FY24").

 

Q3 FY24 Trading Update

 

·        Recurring revenue for Q3 FY24 reached a record of £6.3
million, an increase of 12% over Q3 FY23. Total cash revenue was also £6.3
million.

 

·        Q3 FY24 represents over three continuous years of increasing
quarterly recurring cash revenue, with total growth of 350% from the £1.8
million in the quarter ending September 2020 to £6.3 million for the last
quarter ending December 2023.

 

Q4 FY24 Trading Guidance

 

·        Duke forecasts total cash revenue of £10.2 million in Q4
FY24, a record quarter marking the first time Duke has generated more than
£10 million in a single quarter. This represents a material 30% increase over
the Company's previous record of £7.8 million which was achieved in Q1 FY24.

 

·        During the quarter, Duke delivered two material and
profitable buyouts, that have returned over £19 million which the Company
will use for near-term deployments in new and existing partners.

 

·        Duke expects to achieve recurring cash revenue of £5.8
million in Q4 FY24, a small decrease versus the previous quarter. While the
recent buyouts have resulted in increased total cash revenue, until this
capital is redeployed, there is a temporary impact of reduced recurring cash
revenue.

 

Overview of quarterly revenue growth:

 

          Recurring Cash Revenue*  Total Cash Revenue**
 Q3 FY23  £5.6 million             £5.6 million
 Q4 FY23  £5.7 million             £5.8 million
 Q1 FY24  £6.0 million             £7.8 million
 Q2 FY24  £6.2 million             £6.2 million
 Q3 FY24  £6.3 million             £6.3 million

 

* Recurring cash revenue excludes exit premium receipts and cash gains from
equity sales

** Total cash revenue is monthly cash distributions from Duke's partners plus
cash gains received from the sales of equity assets and exit premiums

 

 

Operational Update

 

·        In February, Duke completed a £2.9 million secondary share
purchase from existing shareholders in United Glass Group, increasing its
equity stake from 30% to 74%, in line with Duke Capital's vision to deepen its
engagement with its high performing partners.

·        In March, Duke delivered two highly profitable exits from
Fabrikat and Fairmed Healthcare, which has significantly bolstered Duke's
liquidity which currently stands at approximately £44 million.

·        The Company has a strong pipeline of both new and follow-on
opportunities for capital partners to deploy additional liquidity.

·        During the quarter, Duke also completed its change of name
and renewed messaging. The review has focused on ensuring that Duke's unique
offering is communicated to business owners and stakeholders in a way which
provides greater clarity and improves comparison when evaluating a broad array
of financing options.

 

Neil Johnson, CEO of Duke Capital, said:

 

"We are delighted to show a record quarter of total cash revenue following the
successful exits of two of our investments. Fabrikat particularly highlighted
the value of Duke's capital, having financed an MBO by three executives in
2021, facilitating an exit three years later at a 36% IRR. We look forward to
redeploying the capital from these exits into our pipeline of immediate and
longer-term opportunities, driving a return in the short-term to delivering
record quarterly recurring cash revenues.

 

Following the completion of our name change and corporate re-branding, Duke
Capital is looking forward to FY25 with renewed optimism. With a strengthened
liquidity position and strong pipeline, we are well-equipped to navigate the
challenges and opportunities that lie ahead, while remaining cautious of the
economic backdrop."

 

 

***ENDS***

 

For further information, please visit https://dukecapital.com/
(https://dukecapital.com/) or contact:

 

 Duke Capital Limited                                                    Neil Johnson / Charles Cannon Brookes / Hugo Evans  +44 (0) 1481 231 816

 Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker)  Stephen Keys / Callum Davidson / Michael Johnson    +44 (0) 207 220 0500

 Canaccord Genuity Limited                                               Adam James / Harry Rees                             +44 (0) 207 523 8000

 (Joint Broker)

 SEC Newgate (Financial Communications)                                  Elisabeth Cowell / Alice Cho / Matthew Elliott      + +44 (0) 20 3757 6882 dukecapital@secnewgate.co.uk

 

 

About Duke Capital

 

Duke is a leading provider of hybrid capital solutions for SME business owners
in Europe and North America, combining the best features of both equity and
debt.

 

Since 2017, Duke has provided unique long-term financing which eliminates
re-financing risk and necessity for a short-term exit by providing a unique
'corporate mortgage' while also aligning its returns to grow with the success
of the business.

 

Duke is focused on generating attractive risk-adjusted returns for
shareholders and has a track record of achieving this across market cycles.
It's three investment pillars are capital preservation, attractive dividend
yield, and to provide upside upon exits.

 

Duke is listed on the AIM market under the ticker DUKE and is headquartered in
Guernsey.

 

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