Last checked at (Sharecast News) - Alternative capital solutions provider Duke Royalty announced a follow-on investment of £0.25m and a restructuring of its royalty partner Pearl & Dean Cinemas on Thursday.
The AIM-traded firm said it had restructured its investment, which now totalled £2.75m, by moving the entire royalty agreement from the Pearl & Dean Group - a UK and Ireland cinema advertising business - to its parent company Step Investments.
It described Step as a diversified investment vehicle with interests in several profitable and cash-generative UK and Ireland businesses, spanning the media and the hospitality and leisure sectors.
The restructuring would provide Duke with exposure across the broader Step portfolio, which the board said would increase the security of the investment.
Duke said the Pearl and Dean Group was the sixth royalty partner to receive a follow-on investment by Duke, and the second partner secured through the Capital Step acquisition.
The investment terms remained as a perpetual royalty, with a pro-forma cash yield of approximately 18.0% on total invested capital, and the potential for further revenue participation depending on future growth.
Step was planning to use the follow-on investment to add a new Dublin-based luxury restaurant and entertainment venue, Hyde, to its portfolio, with Pearl & Dean having successfully completed a fundraise recently to restructure its debt and to fund future growth.
The new investments into the Pearl & Dean Group and Hyde were expected to accelerate growth of those operating companies, to which Duke's revenue participation was tied.
Duke also said the restructuring of the royalty partner increased the security of its investment.
"This investment benefits all parties concerned and reinforces Duke's reputation as a flexible and long-term funding partner for business in the UK, Europe and abroad," said Duke Royalty chief executive officer Neil Johnson.
"For Duke and its shareholders, this restructuring means that our royalty receipts are poised to benefit from multiple growth opportunities as Step Investments launches its new venue, Hyde, alongside the range of planned initiatives from the Pearl & Dean Group thanks to the new funds raised through The Firmament Group.
"This deal also enhances the value of our overall security on the investment."
4 Feb 2021 14:27
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