REG - Duke Royalty Limited - Trading Update

Duke CapitalAnnouncement

04/08/2022 07:15

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RNS Number : 8533U  Duke Royalty Limited  04 August 2022

4 August 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 first
financial quarter ended 30 June 2022 ("Q1 FY23"), and to provide guidance on
trading for the second quarter of the Company's 2023 financial year, ending 30
September 2022 ("Q2 FY23").

 

Financial Highlights:

·     Normalised cash revenue* for Q1 FY23 reached a new record of £5.1
million, an increase of 9% on the previous quarter and an 78% increase over Q1
FY22, exceeding the Company's expectations of £5.0 million

·     Q1 FY23 total cash revenue** also totalled £5.1 million,
reflecting the fact that no buyouts or equity sales occurred during the
quarter

          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
 Q1 FY23  £5.1 million              £5.1 million

 

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

** 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

 

·        Based on current trading, Duke expects Q2 FY23 normalised
cash revenue to increase to £5.2 million

Operational Highlights:

·      Completed a £2.3m follow-on investment into specialist
residential and domiciliary care provider Tristone Healthcare Limited to fund
the acquisition of Beyond Limits (Plymouth) Limited, a profitable operator of
specialist care homes predominantly in the Southwest of England.  The
financing increases Duke's total investment into Tristone to £14.4 million.

·     Completed a £3.1m follow-on investment into the IT managed services
provider, InTec Business Solutions Limited to fund the acquisition of Astec
Computing (UK), a profitable I.T. managed services business with a 30 year
trading history. The financing increases Duke's total investment into InTec to
£17.1 million.

·        £20m equity fundraising completed in May 2022. The proceeds
of the equity raise enable the temporary pay down of existing debt, reducing
interest costs and cash drag, in turn increasing total liquidity available to
the Company for additional investments into existing Royalty Partners
deploying a buy and build acquisition strategy, and new opportunities.

·        Paid a dividend of 0.70p per share paid for the quarter,
representing an annualised yield of over 8% at the current share price with
the dividend well covered by operating cashflow.

Neil Johnson, CEO of Duke Royalty, said:

"Despite the headwinds prevalent in the world economy and the volatility seen
in global stock markets, it was business as usual for Duke in the quarter. I
am pleased to report that the Company produced another record of normalised
cash revenue in Q1 FY23 and I expect this growth trend to continue into Q2
FY23 by virtue of Duke's annual yield adjustments linked to underlying
companies' revenue performance in this inflationary macro-environment. Duke's
secured position and exposure to 48 different underlying operating companies
provides investors with exposure to a diverse portfolio of profitable,
long-established businesses in low-risk sectors which are well managed to
navigate through challenging environments.

The Company's flexible model continues to be attractive to SMEs operating 'buy
and build' acquisition strategies and management buy-out opportunities, as
such we continue to review a healthy number of new investment opportunities.
While we have increased total liquidity available, we will continue to deploy
capital prudently through our rigorous due diligence and evaluation process in
light of the changing macro-economic conditions.  We look forward to updating
our shareholders on our progress in the near future."

***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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