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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Duke Capital Limited | LSE:DUKE | London | Ordinary Share | GG00BYZSSY63 | ORDS NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 31.75 | 31.00 | 32.00 | 0.00 | 07:30:09 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Unit Inv Tr, Closed-end Mgmt | 31.06M | 19.59M | 0.0472 | 6.73 | 131.9M |
TIDMDUKE
RNS Number : 6117G
Duke Royalty Limited
05 March 2018
5 March 2018
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
New Royalty Agreement with Birmingham-based Specialist Coatings Manufacturer
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 that it has entered into a GBP9 million royalty financing agreement (the "Financing") with Trimite Global Coatings Limited ("Trimite"), a Birmingham-based specialist coatings manufacturer established in the 1940s.
In addition, the Company is pleased to announce that it has entered into non-binding terms with a fourth Royalty Partner and is also pleased to publish an updated unaudited balance sheet to better reflect its current financial position following its GBP20 million equity financing completed in December 2017.
Highlights
-- Duke has committed GBP9.0 million to Trimite, its third royalty financing agreement in Europe, providing it with the necessary funds to buy-out a minority shareholder, to fund a small bolt-on acquisition and to provide the additional working capital required to fund its anticipated future organic sales growth
-- Initial cash-on-cash yield of over 13 per cent. via monthly payments
-- 30 year secured financing - distributions to be adjusted annually to reflect Trimite revenue growth
-- 2.5 per cent. equity interest in Trimite granted at no additional consideration -- Trimite is a profitable supplier of industrial coatings to global brands and organisations -- 120 employees across four UK plants and a highly experienced management team
-- The Financing meets Duke's strategy to replicate the proven North American royalty model to create long term value for shareholders in the form of predictable, robust dividend streams
-- Non-binding terms signed with a fourth Royalty Partner, a long established and profitable UK-based glass processing business
Neil Johnson, CEO of Duke Royalty, said:
"We have been working closely with Trimite for some time to execute this Financing. With a solid sales pipeline and a high-quality management team who are also investing their capital in the business, we feel that Trimite represents a textbook deal for Duke.
"In addition, we are pleased with the progress we are experiencing in terms of our future pipeline of deal opportunities and are confident that royalty financing will become increasingly understood as a highly competitive form of growth capital across our preferred sectors."
David Roberts, Chairman and majority shareholder of Trimite, said:
"Trimite investigated a number of different financing alternatives and decided upon the Duke proposal as a result of the long term, participating nature of the investment, which removes any short term refinancing risk. Trimite looks forward to a long and positive partnership with Duke as we grow our business."
New Royalty Partner - Trimite Global Coatings Limited
www.trimite.com
As detailed on 4 December 2017 at the time of its GBP20 million equity fundraising, Duke has been working on an investment opportunity to provide royalty financing to a speciality coating manufacturer. This investment, which has been entered into with Trimite, has now completed, utilising the proceeds of the Company's equity financing in December.
Trimite is a 70-year-old UK private company that formulates and manufactures high performance and technologically superior coatings and paints for speciality industrial markets. It has more than 120 employees in four UK plants based in Birmingham, the Midlands and West London.
Trimite is a key supplier of industrial coatings to several global brands and organisations in sectors including defence and aerospace, agricultural and construction equipment, and automotive. Trimite has a history of profitable operations in highly technical applications, has low debt and enjoys robust gross margins relative to the overall paint industry.
Trimite is majority-owned by Chairman David Roberts and led by a highly experienced team of executives who have spent their careers in the UK manufacturing sector and in senior management positions in global coatings suppliers like Akzo Nobel. With this in mind, Trimite is well-positioned to expand its market presence and take advantage of its strong and growing sales pipeline.
About the Financing
Duke has committed GBP9.0 million, providing it with the necessary funds to buy-out a minority shareholder, to fund a small bolt-on acquisition and to provide the additional working capital required to fund its anticipated future organic sales growth.
The terms of the Financing are in line with Duke's typical investment criteria. The Financing is provided through a secured loan and preference shares and Duke will be entitled to monthly distributions (the "Distribution") beginning in March 2018. On an annual basis, the initial Distribution is expected to total approximately GBP1.2 million, equating to a cash-on-cash yield of over 13 per cent.
The Distribution will be adjusted annually with the first adjustment occurring in April 2019 based on the percentage change in Trimite's gross revenues for the year to 31 March 2019 compared to the prior financial year. The annual adjustment in the Distribution will be subject to a collar. The Financing is for a period of 30 years, with the Distribution payable to Duke throughout the duration of this term, unless Trimite utilises an early buyback option.
Concurrent to the Financing, Trimite has secured an investment from its Chairman for GBP2 million at an indicative pre-money valuation of GBP15 million and Trimite has agreed to issue Duke, for no additional consideration, with an equity interest of 2.5 per cent. of the ordinary shares of the enlarged group.
Update on identified near term investment opportunity
As detailed on 4 December 2017, Duke has been actively progressing a potential fourth investment into a long established and profitable UK glass processing business.
Duke is pleased to report that non-binding terms have now been agreed and are in line with Duke's typical deal structure, which includes senior security, an over 13 per cent. initial cash-on-cash yield, an annual adjustment factor based on revenue performance, and a 30-year term.
While the transaction is subject to due diligence and final documentation, Duke is confident that it will be able to complete the transaction by April 2018 as previously announced.
Duke Royalty portfolio
Further to the completion of the Trimite Financing the Company's portfolio of royalty investments is as follows with over GBP23 million of capital deployed to date:
Royalty Partner Royalty investment Date of Royalty amount Agreement ------------------ ------------------- ---------------- Temarca B.V Euro 8,000,000 April 2017 ------------------ ------------------- ---------------- Lynx Equity (UK) GBP 7,000,000 October 2017 Limited ------------------ ------------------- ---------------- Trimite Global GBP 9,000,000 March 2018 Coatings Limited ------------------ ------------------- ----------------
Unaudited Company balance sheet as at 31 January 2018
To more accurately reflect the financial position of Duke following the fundraising in December 2017, the Company reports its latest unaudited balance sheet as at 31 January 2018.
CONSOLIDATED BALANCE SHEET AS AT 31 JANUARY 2018 GBP ASSETS Royalty debt instruments 14,556,739 Equity investments at fair value through profit and loss - ----------------------- Total non-current assets 14,556,739 Trade and other receivables 308,963 Cash and cash equivalents 18,233,882 ----------------------- Total current assets 18,542,845 33,099,584 ======================= EQUITY AND LIABILITIES Equity Shares issued 60,391,300 Shares to be issued - Share option reserve 124,412 Retained losses (27,464,244) ----------------------- Total equity 33,051,468 Current liabilities Trade and other payables 48,116 ----------------------- Total current liabilities 48,116 Total equity and liabilities 33,099,584 =======================
**S**
For further information, please contact www.dukeroyalty.com, or contact:
Duke Royalty Neil Johnson / Charlie +44 (0) 1481 Limited Cannon-Brookes 741 240 ------------------------ ------------------------ ---------------- Colin Aaronson / Grant Thornton Samantha UK LLP Harrison / Carolyn +44 (0) 20 7383 (Nominated Adviser) Sansom 5100 ------------------------ ------------------------ ---------------- Cenkos Securities plc Julian Morse / Michael +44 (0) 207 (Joint Broker) Johnson 397 8900 ------------------------ ------------------------ ---------------- Mirabaud Securities Limited Peter Krens / Edward +44 (0) 20 3167 (Joint Broker) Haig-Thomas 7222 ------------------------ ------------------------ ---------------- Elisabeth Cowell/ Redleaf Communications Robin Tozer/ Ian +44 (0) 20 3757 (PR) Silvera 6880 ------------------------ ------------------------ ----------------
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 and exclusive partnership 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.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGREAKDLEFAPEFF
(END) Dow Jones Newswires
March 05, 2018 02:00 ET (07:00 GMT)
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