REG - Duke Royalty Limited - Trading Update

Duke CapitalAnnouncement

11/04/2022 07:00

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RNS Number : 8761H  Duke Royalty Limited  11 April 2022

11 April 2022

Duke Royalty Limited

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

Trading Update

 

Duke Royalty, a provider of alternative capital solutions to a diversified
range of profitable and long-established businesses in Europe and North
America, is pleased to provide the following trading update for its fourth
financial quarter ended 31 March 2022 ("Q4 FY22"), and to provide guidance on
trading for the first quarter of the Company's 2023 financial year, ending 30
June 2022 ("Q1 FY23").

Financial Highlights:

 * Q4 FY22 represented a record quarter of cash generation in the Company's
five-year operating history, both in terms of total cash revenue* and
normalised cash revenue**

 

 *  Total cash revenue was £6.7 million, representing a 37% increase over the
previous record quarterly flows in Q2 FY22 of £4.9 million

 

 * Normalised cash revenue totalled £4.7 million, an increase of 21% on the
previous quarter and an 88% increase over Q4 FY21

 

 * Following the Company's £5.3 million follow-on investment into Miriad
Products ("Miriad") in December 2021, Miriad completed its shareholder
restructure in Q4 FY22, realising £1.9 million of cash proceeds to Duke
whilst still retaining its 30% equity stake in the business

 

 * Duke Royalty's last four quarters of Normalised Cash Revenue and Total Cash
Revenue are as follows:

 

 -                      Normalised Cash Revenue**  Total Cash Revenue*
 Q1 FY22                £2.9 million               £2.9 million
 Q2 FY22                £3.3 million               £4.9 million
 Q3 FY22                £3.9 million               £3.9 million
 Q4 FY22                £4.7 million               £6.7 million

 

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

** Normalised cash revenue excludes redemption premium receipts and cash gains
from equity sales

 

 * Based on current trading, Duke expects Q1 FY23 normalised cash revenue to
be £5.0 million

 

Capital Deployments:

 * During Q4 FY22, Duke committed a further £13.3m of investment to support the
"buy and build" strategies of four of its current royalty partners. This was
made up of five separate follow-on transactions as follows:

 

  -   Two investments into InTec Business Solutions Limited of £2.45 million in
      January and £1.65 million in February to finance the acquisitions of
      Provident Technology Limited, Firefly Enterprises Limited and Opal IT Limited,
      respectively
  -   A £1.5 million investment into Lynx Equity (UK) Ltd to facilitate their
      acquisition of Obel-P Automation A/S
  -   A £1.55 million investment into Tristone Healthcare Limited to finance its
      acquisition of Seaside Care Homes Limited
  -   A CA$10.3 million (£6.2 million) investment into Creō-Tech Industrial Group
      Inc, facilitating the purchase of California-based MD Stainless Services

 Other Q4 Highlights

 * A second consecutive quarterly dividend rise, increasing 17% from 0.60 pence
per quarter to 0.70 pence

 

 * Drew down the £20 million accordion facility with Honeycomb Investment Trust,
unlocking additional liquidity

 

 * Cash receipt of €4 million from the early repayment of the 2(nd) tranche of
deferred consideration relating to the sale of Duke's three European river
cruise vessels.  This amount had originally been due for repayment by 30
September 2022. Currently only €2.6 million remains outstanding and due for
repayment on or before 30 June 2023

 

Neil Johnson, CEO of Duke Royalty, said:

"It is pleasing to report that normalised cash revenue has continued to grow,
with Q4 FY22 representing the sixth consecutive quarterly cash revenue
increase since the initial impact of Covid. Given Duke's largely fixed cost
base, the recent acceleration in deployments has led to a material increase in
cashflow per share and we are delighted to be able to share this operational
leverage with our shareholders through increasing the quarterly dividend which
has risen 27% in the last year.

"We continue to see a strong pipeline of royalty opportunities to service both
existing and new companies. Despite the macroeconomic and geopolitical
headwinds, our portfolio as a whole continues to perform well. The resilience
demonstrated is a benefit of our exposure to a range of underlying companies
across diverse geographies and sectors."

***ENDS***

 

For further information, please visit www.dukeroyalty.com
(http://www.dukeroyalty.com) or contact:

 

 

 Duke Royalty Limited     Neil Johnson / Charles Cannon Brookes / Hugo Evans    +44 (0) 1481 730 613

 Cenkos Securities plc    Stephen Keys / Callum Davidson / Michael Johnson      +44 (0) 207 397 8900
 (Nominated Adviser
 

 and Joint Broker)

 Canaccord Genuity        Adam James / Georgina McCooke                         +44 (0) 207 523 8000

 (Joint Broker)

 SEC Newgate (PR)         Elisabeth Cowell / Richard Bicknell / Max Richardson  +44 (0) 20 3757 6882 dukeroyalty@secnewgate.co.uk

 

About Duke Royalty

 

Duke Royalty Limited provides alternative capital solutions to a diversified
range of profitable and long-established businesses in Europe and abroad.
Duke Royalty's experienced team provide financing solutions to private
companies that are in need of capital but whose owners wish to maintain equity
control of their business. Duke Royalty's royalty investments are intended to
provide robust, stable, long term returns to its shareholders. Duke Royalty is
listed on the AIM market under the ticker DUKE and is headquartered
in Guernsey.

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