Duke Capital Share Discussion Threads

[davidosh] 09/11/2020 02:28

That report was from Downing...

Just to mention that Judith Mackenzie of Downing who are one of the key shareholders in Duke will be interviewed by me on MelloMonday tonight. She will also be one of the panelists on the BASH session.

The Mello Monday event starts at 6pm
The full programme is available on the website. In the MelloBASH... The analysts, fund manager and well known investors on the panel will give their honest verdicts on whether four/five companies are a Buy Avoid Sell or Hold at this current juncture in the markets.



All investors welcome and if you use the code MMV5 you will get a half price ticket. Great investor content and entertainment. We had nearly 400 investors attend last month so these are very popular.

[sphere25] 02/11/2020 15:59

Indecisive first move but here's a view from an investment trust today:

Duke Royalty PLC (Duke) (3.51% of net assets)
Cost: £2.08m. Value as at 31 August 2020, £1.29m

Duke Royalty is a diversified royalty investment company providing alternative capital solutions to a range of profitable businesses

Update to the investment case

Trading update confirmed recovery in trading of Royalty Partners
Final results were positive; cash distributions from royalty partners increased by 91% and net cash inflow from operating activities up 65%
Dividend per share of 2.95p – a 5% increase
Increased revolving credit facility to £30m on improved terms
Deployed £20.4m of further capital into existing royalty partners resulting in a more balanced portfolio
The Group offers a 17.5% free-cash-flow yield at the current share price

Progress against investment case
We were encouraged by the group’s most recent trading update, issued post reporting period end, which covered its second financial quarter ending 30 September 2020. Management stated that the general upturn experienced in the underlying trading of its royalty partners had continued into Q2 FY21. Current expectations suggest that cash revenue for the quarter - cash distributions from its royalty partners and cash gains from sales of equity assets - will total £2.4 million versus £2.0 million in Q1 FY21. In context, the group reported record quarterly cash revenues in Q4 FY20, when it generated cash receipts of over £2.8m, representing a normalised pre-COVID trading environment.

Duke proactively entered into forbearance agreements in Q1 FY21 with those royalty partners which had been the most affected by the pandemic, in order to give them the flexibility to manage their way through the financial challenges that they were experiencing. These forbearance agreements initially covered the period from 1 April 2020 to 30 September 2020 and resulted in a short-term reduction in cash revenue, with the forgone revenue for the first six months of the pandemic either being accrued, capitalised or equitised. As these agreements expire, the group is cautiously optimistic that it will be able to announce a further increase in quarterly cash revenue for the period Q3 FY21. As its royalty partners return to normalised trading levels, the group aims to strengthen its portfolio through follow-on investments to existing partners who are seeing opportunity in the current environment, and in new royalty partnerships. Royalty finance businesses in North America have a proven track record of weathering economic cycles and Duke could emerge from the pandemic with an enhanced reputation in the UK market.

[sphere25] 30/10/2020 15:55

Key support test of 20p coming up. Can it hold and rally back with buying in size here or is it another plungeville type move?

(All to be revealed next week!)

[bwm2] 16/10/2020 17:45

Big volume today

[bothdavis] 16/10/2020 16:33

Not an expert in charts, but.....I can see three rising lows...does this mean anything?

Like market makers gradually raising the lowest price to pay?

On a three monthly cycle....not a washing machine, obviously!

[sphere25] 16/10/2020 16:27

Close to a bottom? Bigger buyers at 21p

All this one does is spike to 30p, fail, and then come back down to these levels before another big spike.

[rat attack] 14/10/2020 19:08

Where is the dilution?

[santos123] 13/10/2020 12:24

Another dilution of the shares in issue.
Resulting in another share price drop.

I do not know who the board of directors are representing.
Its certainly not the interests of the shareholders.

What a useless board they should ashamed of themselves.
They need kicking out, and more competent board elected.

Santos123.

[bothdavis] 13/10/2020 11:44

And its on its way down, again!

Over 50% loss so far!

[johnroger] 09/10/2020 13:19

New shares issued on Monday

Scrip Dividend Reference Price

Further to its announcement on 17 September 2020 regarding the payment of 0.5p per share to shareholders by way of a scrip dividend for the upcoming September quarter dividend, the Company announces that the scrip dividend reference price for the ordinary shares to be issued to shareholders will be 23.56p, as calculated by the trailing five-day average mid-market closing price to 30 September 2020.

Accordingly, on 12 October 2020 shareholders will receive payment in new ordinary shares based on the following formula:

(Number of ordinary shares held at the record date of 25 September X 0.5p) ÷ (23.56p)

[bothdavis] 24/9/2020 16:40

Not sure about these...I keep holding but how long will it take to recoup the losses?

Gov advice to return to WFH, not helping, again!!

[egrid1] 20/9/2020 10:18

Mr Waterloo: "I think the reason they keep the scrip dividend is it allows institutional income investors to sell extra shares to replicate a cash dividend"
I guess you are right... but if they do so, that in itself will likely lead to a share price fall.

[mrwaterloo] 20/9/2020 09:09

I think the reason they keep the scrip dividend is it allows institutional income investors to sell extra shares to replicate a cash dividend and track performance despite the fact they would be slightly diluted

[piedro] 20/9/2020 08:52

santos123,

Thank you for your comments.

I also have held these shares for some time though I consider it short term.

For me, the BoD is still on trial and I have become more wary as the information regarding financing has become less informative than it was at the outset.

No doubt the market in general feels similarly which is reflected in the share price

AIMHO, BWDIK,

Piedro

[egrid1] 19/9/2020 16:50

The balance sheet does not change, money is not paid out, and so shareholder funds do not change.

The company has a book value of exactly the same before and after the scrip dividend, but now that book value is divided by an increased number of shares.

All shareholder now hold more shares. But the share price is likely to fall, to reflect more shares in issue v's book value of company.

The EPS will fall, because of more shares in issue but same number of shares, and so for the P/E to remain the same, the share price must fall.

BWM2 - that assumes the 0.75p dividend is:
1. Not reduced, because of more shares to pay to with scrip
2. Would not have been higher due to fewer shares to pay to without Scrip

[dsct] 19/9/2020 16:22

I've been trying to work out if cash or scrip divi is better for me, and VERY simplistically came up with the following - I'm no expert, so welcome corrections.

If a company IPO'd 1,000 shares at £1 each
Share cap = £1,000
Cash in Bank = £1,000

I purchase 100 shares for £100

If they pay a 10% divi :

Option 1 - Cash divi of 10p per share (Total cost £100) :
Share Cap = £1,000
Cash in Bank = £900
S/P now 90p

I receive £10 divi and my 100 shares are worth £90 = £100 total


Option 2 - Scrip divi of 1 share per 10 held (Total cost £0) :
Share Cap = £1,100
Cash in Bank = £1,000
S/P now 90.91p

I receive 10 extra shares so my total holding is (110 x 90.91p) = £100

[bwm2] 19/9/2020 14:22

Egrid1
I suppose that the only benefit will occur when the quarterly 0.75p cash divi recommences as we will receive that on the new shares as well. Seems to me to be prudent to accumulate cash until the uncertainty is over. I am likewise a contented holder pleased with the results

[egrid1] 19/9/2020 13:56

Can somebody explain to me why a scrip dividend is not the same as no dividend?
No money changes hands, the sares in issue increase, and, assuming the market cap remains the same, each share that you hold devalues pro rata.
It seems to be a little sleight of hand - giving the impression that you have gained something, when in fact you have not...
unless somebody can tell me of a tangible benefit.
I say this as a holder, who is happy with the results.

[santos123] 19/9/2020 13:01

"The real kicker is, they said they are going to increased the divi, after the good results."

I would have ignored that comment santos123 but you got 2 thumbs-up.
Please indicate where they said that

Hi Piedro.

Its from the trading update issued on 16 Sept


However, as these agreements expire, Duke is cautiously optimistic that it will be able to announce a further increase in quarterly cash revenue for the period Q3 FY21

If you look at the news section on the top of this page you can see it there, 3rd one from the top.

Piedro, I do lots of research into companies, I have held shares in this company for a long time, but now I,m doubting the company executives and, non executives commitment to the ordinary shareholders.
I will not go into why a share distribution instead of divi payment is not in the interests of ordinary shareholders, but I expect you are already aware of share dilution and its effects on share price, that's why companies buy back shares, not issue them.

Good luck in your investing Piedro. D.Y.O.R.

Santos123.

[parsons4] 19/9/2020 07:51

I bought in last week and then increased my holding this week. I think this is a very well run company investing in GOOD businesses and will be yielding over 10% when this COVID thing is over !!! GLA

[piedro] 18/9/2020 10:07

"The real kicker is, they said they are going to increased the divi, after the good results."

I would have ignored that comment santos123 but you got 2 thumbs-up.
Please indicate where they said that

[bwm2] 18/9/2020 06:48

I think that the relatively minor resultant impairment following covid is a huge management success. The reduced scrip divi is entirely logical. Well done

[bothdavis] 17/9/2020 22:06

Quite happy with a scrip dividend, thank you.

I always reinvest the dividends, it is the proven long term investment winner.

[santos123] 17/9/2020 20:17

Share price tanked again today, even after the F.Y. results were good.

It's down to the scrip divi again.
The real kicker is, they said they are going to increased the divi, after the good results.

This is a kick in the teeth for the long suffering shareholders.

Vote down every resolution in the A.G.M. proxy form.
The directors all need to kicked out, and a more shareholder friendly board put in there place.

Santos123.