Last checked at 4 Aug 2022 07:00
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 or contact:
Duke Royalty Limited | Neil Johnson / Charles Cannon Brookes / Hugo Evans
| +44 (0) 1481 730 613 |
Cenkos Securities plc (Nominated Adviser and Joint Broker)
| Stephen Keys / Callum Davidson / Michael Johnson
| +44 (0) 207 397 8900
|
Canaccord Genuity (Joint Broker)
| Adam James / Georgina McCooke | +44 (0) 207 523 8000 |
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.