Last checked at 11 Apr 2022 07:00
11 April 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 fourth financial quarter ended 31 March 2022 ("Q4 FY22"), and to provide guidance on trading for the first quarter of the Company's 2023 financial year, ending 30 June 2022 ("Q1 FY23").
Financial Highlights:
Q4 FY22 represented a record quarter of cash generation in the Company's five-year operating history, both in terms of total cash revenue* and normalised cash revenue** Total cash revenue was £6.7 million, representing a 37% increase over the previous record quarterly flows in Q2 FY22 of £4.9 million Normalised cash revenue totalled £4.7 million, an increase of 21% on the previous quarter and an 88% increase over Q4 FY21 Following the Company's £5.3 million follow-on investment into Miriad Products ("Miriad") in December 2021, Miriad completed its shareholder restructure in Q4 FY22, realising £1.9 million of cash proceeds to Duke whilst still retaining its 30% equity stake in the business Duke Royalty's last four quarters of Normalised Cash Revenue and Total Cash Revenue are as follows:- | 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 |
* 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
** Normalised cash revenue excludes redemption premium receipts and cash gains from equity sales
Based on current trading, Duke expects Q1 FY23 normalised cash revenue to be £5.0 million
Capital Deployments:
During Q4 FY22, Duke committed a further £13.3m of investment to support the "buy and build" strategies of four of its current royalty partners. This was made up of five separate follow-on transactions as follows:- | Two investments into InTec Business Solutions Limited of £2.45 million in January and £1.65 million in February to finance the acquisitions of Provident Technology Limited, Firefly Enterprises Limited and Opal IT Limited, respectively |
- | A £1.5 million investment into Lynx Equity (UK) Ltd to facilitate their acquisition of Obel-P Automation A/S |
- | A £1.55 million investment into Tristone Healthcare Limited to finance its acquisition of Seaside Care Homes Limited |
- | A CA$10.3 million (£6.2 million) investment into Creō-Tech Industrial Group Inc, facilitating the purchase of California-based MD Stainless Services |
Other Q4 Highlights
A second consecutive quarterly dividend rise, increasing 17% from 0.60 pence per quarter to 0.70 pence Drew down the £20 million accordion facility with Honeycomb Investment Trust, unlocking additional liquidity Cash receipt of €4 million from the early repayment of the 2nd tranche of deferred consideration relating to the sale of Duke's three European river cruise vessels. This amount had originally been due for repayment by 30 September 2022. Currently only €2.6 million remains outstanding and due for repayment on or before 30 June 2023Neil Johnson, CEO of Duke Royalty, said:
"It is pleasing to report that normalised cash revenue has continued to grow, with Q4 FY22 representing the sixth consecutive quarterly cash revenue increase since the initial impact of Covid. Given Duke's largely fixed cost base, the recent acceleration in deployments has led to a material increase in cashflow per share and we are delighted to be able to share this operational leverage with our shareholders through increasing the quarterly dividend which has risen 27% in the last year.
"We continue to see a strong pipeline of royalty opportunities to service both existing and new companies. Despite the macroeconomic and geopolitical headwinds, our portfolio as a whole continues to perform well. The resilience demonstrated is a benefit of our exposure to a range of underlying companies across diverse geographies and sectors."
***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.