REG - Duke Royalty Limited - Trading Update

Duke CapitalAnnouncement

01/06/2023 07:00

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RNS Number : 2549B  Duke Royalty Limited  01 June 2023

1 June 2023

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 and operational update
for its fourth financial quarter ending 31 March 2023 ("Q4 FY23") as well as
guidance on trading for its first quarter of financial year 2024, ending 30
June 2023 ("Q1 FY24").

 

Financial Highlights:

 

·        Recurring cash revenue for Q4 FY23 reached a new record
of £5.7 million, an increase of 21% over Q4 FY22, and an increase on the
prior quarter Q3 FY23

·        Q4 FY23 total cash revenue was £5.8 million

·        0.70p interim dividend paid out in January 2023

Overview of quarterly revenue growth:

          Recurring Cash Revenue*  Total Cash Revenue**
 Q4 FY22  £4.7 million             £6.7 million
 Q1 FY23  £5.1 million             £5.1 million
 Q2 FY23  £5.3 million             £5.3 million
 Q3 FY23  £5.6 million             £5.6 million
 Q4 FY23  £5.7 million             £5.8 million

 

* Recurring cash revenue excludes buyback 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 buyback
premiums

 

 

Operational Highlights:

·        During the quarter, Duke closed and drew down on the credit
facility with Fairfax Financial Holdings Limited. The new credit facility is a
225 bps improvement in interest cost alongside an increase in the facility
size to £100 million, replacing Duke's previous £55 million term and
revolving facilities

·        In Q4 FY23 Duke completed a new US$8.75 million royalty
investment into Instor Solutions, Inc. a California-based product reseller and
service provider for work related to the build-out and migration of data
centres

·        Duke also made a follow-on investment of £1.75 million into
its existing royalty partner, InTec Business Solutions Limited ("Intec"), to
facilitate InTec's acquisition of Frog IT Services Limited, a profitable
specialist provider of IT support and cloud-based services to small and medium
sized customer

 

Financial Forecast for Q1 FY24:

 

·     Based on current trading, Duke expects to achieve recurring cash
revenue of £6.0 million in Q1 FY24, delivering an average monthly revenue of
£2.0 million for the first time in the Company's history, a significant
milestone

·     The £6.0 million of cash revenue would represent an 18% year on
year increase (Q1 FY23: £5.1 million) and an increase on Q4 FY23

 

Neil Johnson, CEO of Duke Royalty, said:

"We are pleased to announce yet another quarter of strong financial
performance and another interim dividend for our shareholders, despite the
macroeconomic uncertainties. We continue to maintain a close relationship with
our portfolio companies and are reassured of their resilience to trading in
challenging market conditions.

"With the forthcoming quarter looking robust in terms of recurring cash
revenue, we have confidence in continuing to deliver in the months to come and
our pipeline remains strong. The current climate serves to accentuate the
attractive qualities of royalty finance, and our supportive model has
demonstrated its ability to help partners weather macroeconomic turbulence."

 

***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 / Harry Rees                             +44 (0) 207 523 8000

 (Joint Broker)

 SEC Newgate (PR)         Elisabeth Cowell / Alice Cho / Matthew Elliott      +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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