Duke Capital Share Discussion Threads

[boystown] 03/12/2021 08:26

Thanks Carcosa, that's kind of what I thought (albeit less articulately in my head!). On that basis, it's one to forget about for the very long-term I suppose, but there's still an element of paying a premium for the expertise of those making the decisions on our behalf n'est-ce-pas?

[carcosa] 03/12/2021 08:15

BT, There is an argument to be made that DUKE has historically been valued between NAV and NAV+40%.

I would say that a premium is warranted because DUKE is showing the market that their finance model is working and working very well. It's not that long ago royalty financing was an unknown quantity to UK investors. The business model seems to be stable, has longevity and there is no practical limit on expanding the business. The more companies they get on their books the less risk of something going horribly wrong. So perhaps investors are seeing Duke for future and growing income and dividend flows with decreasing risk; thus deserving a premium.

How much of a premium is up for discussion.

IMO

EDIT: Cenkos note out: hxxps://www.cenkos.com/research-portal#/portal/cenkos-securities

[boystown] 03/12/2021 07:37

Superb results all round and with an optimistic outlook to boot. But why does DUKE deserve to be valued at a premium to its NAV (£122.3m vs £158m)? Does royalty income deserve a P/E multiple in addition to the NAV?

This is a genuine question as I don't understand enough about the business model to understand why it warrants such a premium - but am still a very happy holder having followed Simon Thompson's tip at 24p in May 2020.

[joe say] 03/12/2021 07:36

Agreed - revenue/profit/EPS/dividend growth - what's not to like?

[mr hangman] 03/12/2021 07:27

Cannot complain about that, no wonder the shares s moved up late yesterday afternoon, one of ST bargain shares of 2021, so when he gets back from his break, I'm sure he will give them a decent write up, price target moved from 50p-60p perhaps

[metis20] 03/12/2021 07:21

Interim Results for the six months ended 30 September 2021

Duke Royalty Limited (AIM: DUKE), a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, is pleased to announce its interim results for the six-month ended 30 September 2021.

Financial Highlights

· Cash revenue of £7.8 million, up 78% from the prior period (Interim 2021: £4.4 million)

· Net cash inflow from operations of £5.2 million, a 46% increase (Interim 2021: £3.6 million)

· Net profit generated of £6.2 million, a 50% increase (Interim 2021: £4.1 million)

· Free cash flow of £4.6 million, up 58% from Interim 2021 (£2.9 million)

· Adjusted earnings of 1.39 pence per share, a 60% increase (Interim 2021: 0.87 pence per share)

· Cash dividends of 1.10 pence per share paid to shareholders

Operational Highlights

· Raised £35 million of new equity capital in April 2021

· Deployed over £23 million of capital into three new royalty partners

· Realised exits from two investments

· Over £55 million of available liquidity for future deployments

· Current deal pipeline is at historic levels in deal value and number

Neil Johnson, CEO of Duke Royalty, said:

"This has been a very successful half year, characterised by substantial cashflow growth and accelerating investment deployment. Cash revenue is up 78% from the prior period to £7.8 million, and we have delivered a 58% increase in free cashflow to £4.6 million. This positive performance has been driven mainly by our team's rapid execution of new royalty agreements which has seen us invest over £23 million into three new royalty partners during the period.

"This strong trading performance makes me confident that Duke will exceed the market's expectations for the 12 months ended 31 March 2022. Since the resumption of its cash dividend, Duke has increased its dividend payment from 0.50 pence per share to 0.55 pence per share, with the prospect of higher dividend payments for shareholders in the future. This growth will be supported by entering into new royalty agreements and I am pleased to report that our pipeline is the strongest in our history. We expect to announce a range of new deployments in the coming weeks and months."

[bwm2] 03/12/2021 07:20

Good to start the day with a warning that profits will be ahead of market expectation

[johnroger] 02/12/2021 17:21

Interim Results for the six months ended 30 September 2021 ("Interim 2022") on Friday 3 December 2021.

[btgman] 15/10/2021 14:14

Post dividend drift this is looking very cheap at current levels AGM next Friday may provide a boot to share price
AIMHO
GLA
BTG

[melody9999] 20/9/2021 18:18

Thanks to Egrid for drawing my attention to Intec. Having looked again at this, I think I am comfortable.

1 The Jul21 RNS suggested Intec had been trading for 5 years - so not a start up.
2 The initial funding was based on known revenues / profitability etc from Intec's investments.
3 The follow on funding is based on Intec investing in a business trading since 1996, and DUKE must have seen a proposal from Intec based on the financials of the business to be acquired.

So I'm OK - but if you do not trust the DUKE management I can understand you would exit. GLAH

[piedro] 17/9/2021 16:27

FY2021 Financial Results Presentation
September 2021


Recording of todays' web conference ...

[kadvfn1] 17/9/2021 08:50

Another article from ST

[piedro] 16/9/2021 09:56

No, but there is another one tomorrow by 'Investor Meet Company'

- sorry no link

[kadvfn1] 16/9/2021 09:16

anyone got link to the webinar?

[piedro] 15/9/2021 10:55

A reminder ...

RNS Number : 0742I
Duke Royalty Limited
10 August 2021

Notice of Results and Analyst Presentation
Duke Royalty, a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, will announce its audited results for the year ending 30 June 2021 ("FY21") on Thursday 16 September 2021.

Details of webinar for equity analysts
There will be a webinar for equity analysts at 09:30am BST on Thursday 16 September 2021, hosted by Neil Johnson, CEO, and Hugo Evans, FD. Any equity analysts wishing to register should contact SEC Newgate at [e-mail] where further details will be provided.

[piedro] 07/9/2021 10:32

egrid1, sorry to see you go.

In cases of disagreement I like ​to make contact with someone on the Board to get their point of view.

We are part owners and should act accordingly.

[egrid1] 07/9/2021 09:20

More investment into InTec (in my last post I spoke of CreoTec - has it changed its name or did I use the wrong name last time?)
Well I was not too happy about the last deal, and I am not too happy about a further 2.2M going into this new "follow on investment" - it appears that Duke has become the funding provider of a start up closed investment fund. With the partners in the investment fund taking a good deal of the profits and Duke taking the tisk on the funding of them.
Who does the due diligence on the subsequent purchases by InTec as it requests funding for these deals from Duke?
If both Duke and InTec then it seems that the job is being duplicated and an expensive way for Duke shareholders to invest in companies.
I also don't like the lack of a track record for InTec - which is not in accordance with a key part of Dukes mission statement "Duke Royalty provides profitable, well-established SMEs with a long-term and flexible source of growth capital."
InTec is not "well established".
I had made a reasonable profit on Duke in the 14 months of ownership, but have sold out today.

[johnroger] 23/8/2021 16:48

A bit more excitement today with buyers paying up to 48p

[kadvfn1] 12/8/2021 09:20

ST just post about Duke so hopefully we'll see more action higher today

[piedro] 11/8/2021 16:11

carcosa, perhaps you would be good enough to explain.

TIA

[carcosa] 11/8/2021 12:36

FCS it's not ambiguous. It's clear as day.

[piedro] 11/8/2021 12:12

I'm back looking for clarity.

The statement ...

"At closing, Duke received back net cash of £6.9 million, delivering an IRR of 29.4%"

... is ambiguous. Do they mean that on exit they have been paid £6.9m or that the £6.9m includes the monthly payments (which I calculate at c.£1.7m) ?

[melody9999] 02/8/2021 22:46

egrid - yeah I think we need more clarity on aspects of the deal. Whilst I am confident DUKE will have covered the ground, it is a slightly different arrangement. The 18.75% equity stake could prove valuable on top of the monthly royalty payments.

[piedro] 02/8/2021 13:36

Hello,
I am trying to get my spreadsheet of monthly payments up to date.

In May 2020 forbearance agreements were made with 5 of companies. Of these we have been updated for Temarca, United Glass and Pearl & Dean but I have no information for the situation of neither Trimite nor Interhealth Canada.

Can anyone help?

TIA.

Piedro

[egrid1] 02/8/2021 11:27

As a holder of Duke, I am struggling to understand this latest deal.
It seems to me that effectively, Duke has delegated the role they play, to a third party.
The money has been provided to Creō-Tech for them to go out and find their own deals in the way that Duke is supposed to do. Ok, so we know what the first two deals are, and no doubt due diligence could be carried out against those two companies... is the loan ring-fenced against those deals, or can Creō-Tech borrow from third parties and invest in further deals, affectively diluting the relevance of the first two deals?
If, as stated above, Canadians invented the model, why did they need to come to the UK to arrange such financing? Has Duke stole the business from under the noses of the Canadians, or did the Canadians turn their noses up to such a deal?
While the companies that have been invested in by Creō-Tech are established, the holding company and its management is not. How can it be shown that the managers of the holding company have the ability and strategy to perform and manage the holdings in their company long term?
It seems to me that in lending to a company with no track record, Duke has gone against the first point that they note in their mission statement:
"Duke Royalty provides profitable, well-established SMEs with a long-term and flexible source of growth capital."
Have I misunderstood this deal?