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It’s the impact of energy costs and interest rates + recession on their loan book that is of concern. Especially likes of manufacturers. Some impact will be unavoidable. E.g. United glass use a lot of energy, Miriad in leisure space could be deemed as risky but healthcare should fair better.
This $6m royalty deal is a good move and Duke are on top of their game but this investment is really a difficult call. Much of which could be in the SP already. I am not sure either way!
Usual caveats
Trek
New Path Fire and Security Limited - https://newpathfire.co.uk/
This seems a wise investment; recession proof and invested in a business that will improve margins with scale.
DUKE started the 2023 financial year with £5.7m and £6.8m loan headroom. Since then around £11m has been invested; £19 m raised [£20 net of expenses]; £5m paid in dividends and probably around £3.5 paid in expenses and additional interest / set aside for tax & £10m received from royalty partners.
Looking fine, but more money may be needed if opportunities arise. Dividend seems safe.
One has to be carful ,with any business registered in the Channel Islands, loose supervision
Oh,I remember it well. Bitterly dissappointed with their old boys act. Made me look for a good company with a high dividend (and found one). You are correct about the sp dropping when raising money, too.
Notice of upcoming AGM - do you remember them issuing cheap shares for themselves and a few institutional friends only - closing the public offer in a couple of hours.
This wrecked the share price which has yet to recover (served them right, but also wrecked it for us!).
For a small what it's worth I am voting against all the directors out of principal to send a message - would help if a few others would as well, or they will just treat small shareholders as dirt.
Apart from this I think they are a very interesting company with great dividend. As they pay out most of the earnings it does mean they have to raise more cash to expand, but each time they have, it's caved in the share price for a while.
The Lizard Queen has burnt the £
Don’t be, folk think it will drop more than the divi and buy sell costs. So the sell and buy back cheaper.
Same difference if it comes off.
I though planned to buy my next lot after xd.
Usual caveats
Trek
I'm amaze there are sells going on today before ex-div tomorrow
It's on now. I have just been reading it
nomlungu. I find. with most. companies it . takes a day . or. two . to show the. accounts. online. It is not . just. DUKE. who, to me, appear. to. e a very well managed company.
Picked up a few today ahead of mini budget. Change in corp tax and anything on energy will help duke.
SP has held up well since placing.
May get more later but I like to buy in tranches as timing these things is near impossible!
Usual caveats
Trek
I wanted to read the accounts... Still not online despite the RNS from this morning stating:
An electronic copy of the Annual Report and Accounts will shortly be available to view on the Company's website, www.dukeroyalty.com
Not good enough...
Still not convinced re passing on inflationary costs.
E.g who will pay £10 for a pint of beer?
Whilst it’s a different customer mix. That’s still the point.
High annual increases in healthcare is more the norm and it’s often non discretionary. However, some manufacturing like glass which is also energy intensive their customers may delay purchases of big ticket items.
I like the model here and I think the more appropriate question is how much uncertainty is in the price. Sub 35p may still be good value but I don’t see it running to the 40’s against the economic cycle.
Of course I could be wrong though. Still on the sidelines.
Usual caveats
Trek
Simon's update after market close with a buy recommendation.
https://www.investorschronicle.co.uk/ideas/2022/09/08/on-the-financial-results-beat/
GLA
From the accounts released today - it should provide some comfort:
'One of the core benefits of the Duke business model is that it provides shareholders with a degree of inflation hedging as higher costs being incurred by its royalty partners translate into them charging higher pricing (and therefore generating higher revenues) which in turn should lead to an increase in Duke's cash receipts via the annual reset mechanism. I am happy to report that Duke's average returns increased during FY22, validating this thesis, and we expect this trend to continue while inflationary pressures persist.'
I don't agree- at least at present. Perhaps you are being affected. by all the doom and gloom in the press . Recession- what recession? Interest rates. will. go. up - then - they will come. down. Hold. The. company is. doing well and can afford. dividends .
Sold half my holding today for a tiny loss. Should have done tis a whole lot sooner, but DUKE is now looking vulnerable, with a likely div cut to come, probably some time next year. If the sp falls through 30p we could be looking at 26p for the next hurdle.
It's notable that the sp is now some 14% below the open offer placement price last May, when the directors forked out biggish sums at 35p/sh. They must be starting to wonder whether they were wise to do that.
My. apologies - due. to. stress - I will try. harder.
kentio, could you please refrain from adding a full stop after every word of your posts in future?
Trek, whilst I respect. your. (and everyone else's) opinion I think. that whilst. the. energy price increase is a. possible. minus, companies. employ managers. who are . well paid. to. solve. whatever . problems . come. along. I. have. worked in. industry in many countries. and that's what. you have. to do - find a solution - whether it is. increasing prices. to the. consumer or. reducing. your input. costs. you have to. do it , that is what. you are paid. for.And. we did. do it! To me, Dukes cash. flow looks perfectly. capable. of financing present. and. future. dividends and. I am adding Moreland will then have 60,000 value. about. 21K. I think we can. all be affected by the. doom and gloom merchants in the. press and elsewhere but. they are. frequently. wrong. I am always optimistic. and (mostly<9it pays off! (famous. last. words!). ..
Thanks Trek........... Yes Airtell on the FTSE 100 in an uptrend and tecnically a good buy in time just bouncing of the 200 SMA Imm in at 1.42
Your Dec at 107 excellent price well done and hope you still have them.... Ive been succsessfuly in and out of Dec this year and my last purchase was at 119 then sold at 130. Which i was happy with at the time.
GL a
Good move imo Optimus, AAF have been on my radar for ages.
I managed to bag some DEC at 107.
Duke is high risk now given the potential impact of higher energy costs on smaller business balance sheets. Some but not all will be able to pass prices on IMO.
Will take a mamouth task to work out a risk profile so better off out atm. Can always buy back in.
Real shame as such a good well run innovative Co. Actually pleased to see the SP hold up so well and if it continues I will likely buy back later.
Good luck with your investments
Usual caveats
Trek
Took it to Aitrell AAF
GL all
patience depleted so out of here holding in cash and waiting for something to come along
Current numbers more than support the current dividend rate.