Duke Capital Share Discussion Threads

[f15jcm] 15/8/2019 22:30

Nice post mikkydhu, I think there are some parallels that can be drawn between DUKE and Burford Capital, which your post has highlighted. Let's hope no one comes along and does a hatchet job anytime soon. Paying a nice divi. so we know the cash is real!

[petewy] 15/8/2019 13:47

Their update on site is a lesson in either arrogance or confidence

[mikkydhu] 15/8/2019 10:51

The success of this company depends very much on the skill of its management in identifying potential Royalty Partners, assessing the strength of each business and its future and in making perceptive judgements about its management.

Since ALL annual adjustment factors have been revised upwards, it is clear that so far Duke management have demonstrated these skills.

Duke also have the necessary communication skills as they have persuaded their lenders to give them better terms...presumably because they have demonstrated their skills in a very tangible way.

All this gives one confidence in investing in DUKE.

[martindjzz] 15/8/2019 09:21

I’ve been onboard about 5 months and like what I am seeing. But it is a unique company and for the time the market has to rely on management’s view of the value of its investments. It will good to get more clarity in September.

[melody9999] 14/8/2019 12:21

Added too today - and more good news to come shortly it seems:

The improved terms of the debt refinancing to increase both its size and to reduce the cost have now been formally agreed with Duke's existing debt provider, with completion of the refinancing expected by the end of August

[gary1966] 14/8/2019 08:34

Seem very confident of increasing an already very good yield as well.

[f15jcm] 14/8/2019 08:17

Super update, bought more.

[mikkydhu] 14/8/2019 07:41

"All annual adjustment factors for Royalty Partners revised upwards."
means more money coming in.

"The improved terms of the debt refinancing both to increase its size and to reduce its cost."
means less money per amount borrowed going out.

Excellent.

[cheshire man] 14/8/2019 07:26

I'd say very decent owenski happy to be a holder here

[owenski] 14/8/2019 07:19

Some decent highlights in that TU

[masurenguy] 28/6/2019 11:27

Went XD yesterday.

[rustle2] 27/6/2019 07:11

and remember the two of them were encouraged to disagree for the video!

[bageo] 26/6/2019 20:01

Thanks for the link

I also think the point on the "expensive" issue is that the 13-14ish (variable) payment is not an interest payment or rate but an interest and captial repayment.

The 'interest' rate is therefore lower.

I don't disagree on the default risk, it exists but the management via payment cover and it being high ranking if there is a default so potential to claim on assets before others helps manage this. But as the company have made clear they aim to diversify and grow the portfolio and this will continue to reduce risk.

[melody9999] 26/6/2019 14:11

Yes I listened to this. I think Graham should have made the following points.

The benefit to royalty partners is that they retain control of their business compared to the private equity route. And compared with increasing debt there is no refinancing risk, heavy covenants or FCF issues. ... and they can buyback if they wish at any time during the term.

In terms of partner default, DUKE have a rigorous process before accepting a new partner. No start ups, no oil and gas, mining, biotech. 10 years of operating history, strong management, competitive advantage, senior security over assets.Far from being 'high-risk' companies that could not achieve finance elsewhere as Boxall suggests, DUKE criteria ensures that only high quality companies are accepted.

My comments above are taken from a DUKE presentation made in May 19. Shame Boxall did not get it and a shame Neary was not given the chance to clarify.

[rndm355] 25/6/2019 18:50

Duke debated at 12:38 of this:

[owenski] 24/6/2019 13:45

Nice income stock, keeps creeping up too, didn't buy this for capital gain but seem to be sitting on one atm

[melody9999] 21/6/2019 23:15

My largest holding - with a divi of 6%+ its easy to wait for the share price to slowly appreciate!

[danielinnes74] 19/6/2019 10:23

In for a while now as one of my ‘safer ‘ options. Got nice growth - ticking along nicely

[masurenguy] 19/6/2019 08:02

Quarterly dividend @0.7p for the 4th consecutive quarter takes to annual yield up to 6% at last nights closing Offer price. Also reflects a 40% increase on the trailing quarterly dividend in the prior year.

[dr know] 10/6/2019 16:28

Nice little tick up to the all time high which is always a welcome sign to holders.

[swiss paul] 18/5/2019 12:34

Toe dipped in

[bageo] 14/5/2019 18:31

Interesting conversion to the Duke model, wondering if others from Capital steps may follow the same path.

[masurenguy] 14/5/2019 07:58

14 May 2019
Duke Royalty Limited

Modification of Terms with Recently Acquired Royalty Partners

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 modifications to the terms of the following agreements which will increase near term revenues for the Company.

The Company has reached agreements with royalty partners Welltel (Ireland) Limited ("Welltel"), a telecommunications services company, media company Pearl & Dean Cinemas Limited ("the Pearl & Dean Group"), and Xtremepush Limited ("Xtremepush"), a technology solutions company, all of which were acquired via the recent Capital Step acquisition, to modify the terms of existing agreements. This is expected to increase gross revenues to Duke by at least £3.7m in aggregate over the next 5 years.

Capital Step was acquired by Duke Royalty in February 2019, prior to which it offered a 'unitranche' solution, which is a perpetual royalty paired with a senior secured loan, which amortises over a three to five year term. Pursuant to the existing arrangements with these three royalty partners, a total of £5.5m of capital deployed amongst them was due to begin repayments in various instalments starting from December 2018, with the entire £5.5m of capital expected to be repaid by 31 March 2022.

Modifications of terms have now been agreed; for Welltel and Xtremepush, the maturity dates of the senior loan facilities have been extended until 30 April 2024, when the full repayment of principal will be due. For the Pearl and Dean Group, the original agreement saw half of the royalty amortising over three years, and the other half as a perpetual term. The parties have agreed to make the entire amount a perpetual royalty, with the return calculated as a fixed percentage of gross revenues, subject to a floor and a cap. All other terms of the agreements remain the same.

As a result of removing the capital repayments, Duke has increased the gross revenues that it expects to receive, assuming the agreements are in place until 30 April 2024, by at least £3.7m. By extending the royalty agreement in perpetuity, the actual revenue could exceed this figure depending on future revenue growth of the Pearl & Dean Group, as £3.7m only includes the minimum contractual royalties (ie. the 'floor') due in the next 5 years. These modifications represent an increase of more than 25% to the Capital Step portfolio's expected revenues per year for the next five years and need no additional overhead costs. Importantly, these contract modifications are excluded from the 'performance related milestones for the period ended 31 March 2021' which the Capital Step portfolio needs to deliver in order to receive a deferred payment from Duke Royalty, as announced by the Company on 4(th) February.

Neil Johnson, CEO of Duke Royalty, said:"We are pleased to agree these modifications, which means that our royalty partners can increase short term cash flow and Duke can maximise near term revenues. We recognised the strength and credit quality of the acquired royalty partners and the Board identified this as a way of unlocking value of the Capital Step royalty agreements for Duke Royalty shareholders. We are also looking at the opportunity to deploy further capital at accretive returns via follow-on investments into the acquired royalty partners and look forward to updating the market in due course."

[masurenguy] 13/5/2019 08:21

Citywire states both Cenkos & Berenberg rate DUKE a ‘buy’, with the latter issuing a 56p price target.