Duke Royalty Share Discussion Threads

[johnroger] 14/1/2021 13:23

More cash coming in ! Duke's funds have been used by Step, in part, to acquire a majority equity stake in the Dublin-based private education subsidiary City Education Group ("CEG"), a long standing, profitable business with a strong balance sheet which will provide the foundation for Duke's future monthly royalty payments from Step -- Additionally, Duke's funds have been used in part to facilitate a further acquisition by a Step subsidiary of a majority interest in Adtower Digital Media ("Adtower"), a profitable Irish business within the digital out of home advertising sector, which has demonstrated resilience through the Covid-19 pandemic through their focus on supermarkets, petrol stations and convenience stores. This acquisition diversifies Step's revenues further and increases its EBITDA -- Now that this transaction has completed, Step will immediately resume monthly royalty payments to Duke including all catch up payments from 1 October 2020

[johnroger] 11/1/2021 15:18

In light of the Company's growing pipeline of opportunities driven by business owners' desires turn to long-term capital solutions, Mr. Madouros' appointment provides Duke Royalty's Investment team with additional expertise, particularly in the European non-bank credit sector and increases capacity for origination and execution of new transactions. Formerly a senior member of the investment team at Pollen Street Capital, Duke Royalty's debt provider, Mr. Madouros has a strong track record of working closely with UK SMEs to assess their needs and structure appropriate capital solutions. He will be responsible for conducting the due diligence and negotiations on prospective investment opportunities, directing the execution of royalty transactions approved by the Duke Royalty board and monitoring royalty investments made by the Company.

[energeticbacker] 22/12/2020 17:53

Investor's Champion has concerns about the business model. FRom the latets Investor's Champion update "For the year ending December 2019, Slake Holdings Ltd, the parent company of Miriad and associated companies, generated revenue of £22.2m and a pre-tax loss of £671k, after interest charges of £1.5m. The balance sheet was negative to the tune of £888k with long term creditors (which include Duke’s £10m) of £14m."

[thirty fifty twenty] 22/12/2020 13:03

hi Stevie B - at first, i was thinking similarly when i read the RNS. however this has always been stated as a part of their business model, and the attraction is now the NAV but the income stream - whilst they hold they get very high income returns which pay the high dividend. so yes maybe the strongest companies will re-finance and then DUKE make an immediate profit. the biggest for me though is that the chart rectangle base is now pretty clear IMHO All IMHO, DYOR + BoL DUKE is in my portfolio

[johnroger] 22/12/2020 12:57

" Proceeds from this exit will leave Duke in a positive net cash position, thereby providing significant liquidity of over GBP30 million for new deployments with several new and follow-on investment opportunities currently at a late stage of due diligence" More good news to come?

[stevie blunder] 22/12/2020 09:31

The two exits Duke have made point out a weakness in the business model. I knew that the agreements had an exit clause that could be triggered by the Partner, but I had not expected such exits to be common. The worry is that Duke loses Partners as soon as they achieve enough success to get a better offer from lenders, or in the case of Weltel, Private Equity. In the current easy money environment we may see more, leaving Duke with the less successful Partners. On the other hand the NAV has had a boost of about 3% and the market seems to like it, so maybe it is all in the price.

[peter27] 22/12/2020 07:47

Will today's news break the 30p ceiling?

[johnroger] 09/12/2020 19:53

After Investor's Champion posted their negative view on DUKE in November the share price increased by 20%. Here's hoping for the same again!

[energeticbacker] 09/12/2020 15:45

Cash revenue in the period of £4.4m and net cash inflows from operations of £3.6m were, according to management, just 8% below the comparative period in 2019, “despite the structuring of five forbearance agreements to support royalty partners through the pandemic”. Investor's Champions wonders if they might be missing something, but this seems to ignore the fact that Duke has made a further £16m of advances since the comparative period to 30 September 2019 and also raised £20m of new funding in October 2019. Therefore, cash flows should realistically have been significantly higher than the comparative period, based on the substantially larger pile of capital at work, unless of course that 8% is on a like for like basis, stripping out the impact of new advances. More on their website.

[swiss paul] 24/11/2020 20:32

Nice update in C this week

[melody9999] 24/11/2020 08:20

Having dipped out in March, I'm back in again today. Business (and dividend) as usual.

[johnroger] 19/11/2020 11:51

Thanks, may be in this weeks paper copy.

[kadvfn1] 18/11/2020 22:18

Last ST update on Duke was on 16th Nov. He set target range of 32.25-41

[johnroger] 18/11/2020 20:01

Has ST commented since the recent Trading Update?

[kadvfn1] 18/11/2020 17:34

Nice article. Total opposite and in line with ST's view which is nice. I hope we can get to 35 soon

[johnroger] 18/11/2020 17:10

Those readers looking for an AIM share tip which would seem to have significant recovery potential could do worse than invest in DUKE ROYALTY. It will probably come as no surprise to readers to learn that the share price has more than halved this year, falling from a high of over 50p at the start of the year to a low of 17.5p in April. Although the share price has rallied subsequently, it still stands at just over 50% of the 2020 high, and the positive trading statement released last Thursday indicates that better times may lie ahead. Duke Royalty is an unusual company operating in an interesting niche market, providing royalty finance to companies in the UK and Europe. The business of royalty finance is well-established in North America, notably Canada, and the founders of the business decided that the business model could be replicated over here. Essentially, the business provides finance to SME’s in exchange for a percentage of the latter’s future revenues. This allows the business owners to retain control over their company as Duke does not take an equity stake whilst also providing the business owners with another source of capital. There is also no refinancing risk as the royalty payments made by the borrower include both principal and interest and these repayments are made over the long term. Last week, the group issued a trading statement including the news that it intends to pay a dividend of 0.5p per share foe the upcoming quarter, which covers the three month period to 31 December. The group had 12 royalty partners at the start of the pandemic and seven of these have maintained their monthly cash payments to Duke throughout the period. Four of the five royalty partners who entered into forbearance agreements have now resumed payments and in some cases this has resulted in Duke taking equity stakes in the businesses in lieu of the payments that were not made. In last week’s statement, the company also confirmed that it has substantial capital to deploy and, with the current outlook for SME’s being challenging, this is expected to provide significant investment opportunities going forward. BUY

[kadvfn1] 18/11/2020 16:49

Do you mind posting the article please

[johnroger] 18/11/2020 16:36

Thanks sharetips Complete contrast to Investors Champions and yet based on exactly the same information! You pays yer money ----

[swiss paul] 17/11/2020 12:45

That is if we have not ended up owning the assets which was being alluded

[waterfall city] 16/11/2020 19:46

The cylical companies it holds must offer recovery potential when the covid situation improves,leading to a reversal to the write down in asset values.

[red ninja] 16/11/2020 13:30

Yep looks like Duke share price has still got legs. According to lse website Duke Royalty has no shorters. As previously stated Investor Champion tip site do not appear to be backers, but Downings and other investment houses appear to like them.

[tonytyke2] 16/11/2020 13:21

Perhaps some of the shorters have got stung in the past couple of hours.

[red ninja] 16/11/2020 09:54

If I'm reading that chart then the cycle has already turned earlier than the last one and is heading back down to circa 20p. Just my view.

[brileyloucan] 13/11/2020 13:46

I've looked at Duke for at least two years but never managed to get comfortable on valuation grounds. At the end of the day this is a finance company so I can't see why I would pay 90% of Tangible book value, when I can buy solid banks and other finance companies in the 50% to 60% range. They do have some positives which might make me push it higher than competitors but it also has plenty of negatives - concentration, exposure to higher risk entities, lower down capital structure. Therefore the "right" price in the current market seems to be in the low 20's.

[owenski] 13/11/2020 13:34

Taking 'paper' - equity - instead of cash says it all. If a company cant pay it's agreed obligations, then there's a problem, taken it's paper instead is risky and could turn out to be worthless paper. Not a great business model under the current situation.