Duke Capital Regulatory News (DUKE)

25 November 2022

Duke Royalty Limited

("Duke Royalty" or "Duke")

New Royalty Agreement with Fire and Security Services Business

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 announce that it has entered into a £5.0 million royalty financing agreement (the "Financing") with New Path Fire and Security Limited ("New Path"), further diversifying Duke's revenue base.

New Path has to date executed a buy and build strategy of synergistic companies within the fire and security services sector in the United Kingdom.

Highlights:

· New Path has completed seven acquisitions of long-standing, profitable companies which have operated an average of 20 years, geographically spread across southern England

· New Path's underlying businesses have good visibility of revenue, with a significant recurring portion and highly predictable maintenance income across a very broad customer base

· Duke's initial £5.0 million royalty financing will be used to acquire two complementary businesses under exclusivity and refinance the existing senior debt in the business, with attractive pro forma credit metrics

· Duke has agreed a total funding commitment of up to £20 million to support New Path's buy-and-build strategy to acquire profitable fire and securities services businesses across the UK

· Agreement on typical Duke terms: 30-year secured financing, monthly cash payments starting in typical range, distributions commence immediately and to be adjusted annually to reflect New Path's consolidated revenue growth

· Duke will also become a 15% equity shareholder in New Path, building strong alignment with our Royalty Partner

Neil Johnson, CEO of Duke Royalty, said:

"Duke is excited to be partnering with New Path Fire and Security to support their buy and build strategy. The fire and security sector is both admirable in its principal cause to protect assets and lives, as well as highly attractive with regards to its antirecessionary attributes. New Path has acquired a group of quality operating businesses and we look forward to helping them to continue consolidating a mission-critical sector."

Andrew Hill, CEO of New Path Fire and Security, said:

"Duke is an ideal partner and shareholder for us at this point in our life cycle. Their capital will allow us to assert ourselves in a sector that we understand well and to gain scale via acquisition. We are excited about the opportunities that lie ahead and to work with the Duke team to achieve our strategic objectives."

Further information regarding New Path Fire and Security

New Path Fire and Security is a growing and acquisitive platform, buying independent regional fire safety and security companies throughout southern England. New Path predominantly serves business customers, helping them to protect their premises, assets, and most importantly their people.

New Path group companies cover all aspects of fire safety, including the installation, maintenance, and servicing of fire alarms, extinguishers, and emergency lighting and their security services extend to CCTV, access control, intruder alarms, door entry systems and beyond. New Path's growing raft of competencies also allows it to undertake ancillary electrical works required, giving customers a hassle-free single point of contact.

About the Financing

Duke has committed £5.5 million of total capital (£5.0 million of royalty financing and £0.5 million of equity capital) to enable New Path's acquisition of two new targets and the refinancing of the company's existing senior debt. Duke and New Path have agreed in principle to increase Duke's investment in future tranches of capital up to £20 million and New Path's stated acquisition criteria align extremely closely with Duke's own.

The terms of the Financing are in line with Duke's typical investment criteria. The Financing is provided through a combination of a secured loan and preference shares and Duke will be entitled to monthly distributions (the "Distribution") beginning in December 2022.

In line with Duke's other investments, and reflective of the participating nature of Duke's business model, the Distribution will be adjusted annually based on the percentage change in total combined gross revenues of the Group for the 12 months to 31 December 2023, compared to the prior financial (calendar) year. The first adjustment will occur from December 2023. The annual adjustment in the Distribution will be subject to an agreed collar.

The Financing is for a period of 30 years, with the Distribution payable to Duke throughout the duration of this term, unless New Path utilises an early buyback option which will trigger an early buyout payment to Duke.

Duke Royalty Portfolio

A full list of Duke's current Royalty Partners is included for reference on the Partners page of our website: www.dukeroyalty.com/partners

***ENDS***

For further information, please visit www.dukeroyalty.com or contact:

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.