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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% | 32.25 | 32.00 | 32.50 | 32.25 | 32.25 | 32.25 | 215,665 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 31.06M | 19.59M | 0.0472 | 6.83 | 133.98M |
From Apr 2019 to Apr 2024
TIDMDUKE
RNS Number : 8506V
Duke Royalty Limited
08 November 2017
8 November 2017
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
Interims Results for the period ended 30 September 2017
Duke Royalty (AIM: DUKE) is pleased to report the interim results for the period ending 30 September 2017 ("Interim 2018") which has been a time of significant positive change for the Company.
Chairman's Report
Interim 2018 is the Company's first period of revenue since the change in investing policy, having generated GBP 0.31 million of receipts due under contract and a loss for the period GBP 0.08 million. Furthermore, due to the events post the period under review as described below, I am pleased to inform shareholders that Duke Royalty is now operating at a cashflow positive run rate. The Company has also maintained its significantly reduced operational expenditure, with Board fees and other service provider costs having been voluntarily reduced in order for the Company to implement and sustain its dividend policy for Fiscal 2018. This reduced level of operational expenditure will remain in place until the Company has successfully deployed additional capital into new royalty opportunities and until the Board and respective Board Committees decide that the level of operational expenditure should be increased.
During Interim 2018, the Company announced its inaugural royalty financing agreement for Euro 8.0 million with Temarca, an established European river cruise provider. The financing, announced on 6 April 2017, has allowed Temarca to purchase one boat that was previously being leased, repay all outstanding senior debt, refurbish their fleet and boost working capital. Under the terms of the financing, Duke provided Euro 8.0 million to Temarca with an option at Duke's sole discretion to provide an additional Euro 2.0 million for a period of 12 months. The Financing, now fully deployed entitles Duke to receive distributions of over Euro 1.0 million per annum, equating to a cash-on-cash yield of approximately 13 per cent. It should be noted that the Euro 8.0 million was drawn down in several tranches during Interim 2018 with the facility only fully deployed just before the period end. As a result, the full revenue impact will not be felt until the second half of the 2018 fiscal year. The distribution will be adjusted annually with the first adjustment occurring in August 2018 based on the percentage change in Temarca's gross revenues for the fiscal year ending 31 July 2018 compared to the prior year. The annual adjustment in the distribution will be subject to a collar. The term of the financing is for a period of 25 years, will be senior secured and Duke has provided Temarca with a buyback option.
The Company announced three board changes during Interim 2018, the appointment of Justin Cochrane as an executive director, the appointment of Matthew Wrigley as a non-executive director and the resignation of Jim Ryan as a non-executive director.
I am also pleased to report that during Interim 2018 Duke Royalty approved its first two quarterly dividends both of 0.5 pence (sterling) per share. I would like to remind shareholders that the Company is targeting a minimum initial annual dividend yield of two pence per share for Fiscal 2018 and intends to continue paying quarterly dividends going forward.
Immediately following the period under review, on 6 October 2017, the Company announced that it had closed its second royalty financing with Lynx Equity (U.K.) Limited ("Lynx UK"), the UK-based subsidiary of Lynx Equity Limited ("Lynx"). Duke has committed GBP 7.0 million, with an initial tranche of GBP 4.5 million (which has already been drawn down) and an additional GBP 2.5 million to be drawn down at the completion by Lynx UK of an imminent acquisition. The financing represents the beginning of the relationship with Lynx as a Royalty Partner, as Duke has become Lynx's preferred European capital provider, with the potential to provide a further GBP 8.0 million of funding equating to a total of GBP 15.0 million over time. The financing will entitle Duke to monthly distributions beginning in November 2017 which total GBP 0.54 million per annum, based on the initial drawdown of GBP 4.5 million. The distributions will be adjusted annually with the first adjustment occurring in August 2018, based on the percentage change in Lynx UK's gross revenues for the fiscal year ending July 2018 compared to the prior year. The annual adjustment in the distributions will be subject to a collar. The term of the Company's agreement with Lynx is perpetual, and Lynx has a no-buyout clause for the first 5 years.
The Remuneration Committee approved the Company's long-term incentive plan (LTIP) as described in Part 5 of the Admission Document. Shareholders should also note the following in regard to the issuance of 1,500,000 bonus Ordinary Shares in the Company which are a component of the Support Services agreement with Abingdon Capital Corporation ("Abingdon") as described in Part 1 of the Admission Document. Whilst none of the 1,500,000 shares have been issued to date, 859,614 have been accounted for during Interim 2018 in relation to the full drawdown of the Temarca financing. The non-cash cost of issuing these 859,614 shares equates to GBP 0.34m has been booked to the Consolidated Statement of Comprehensive Income as a Support service fee expense.
On 8 November 2017, the Company announced that it had also entered into an Advisory Agreement with Partners Value Investments LP ("PVI"), the Company's second largest shareholder, and approved the grant of 2,000,000 5-year warrants to PVI, exercisable at GBP0.42, in consideration for the provision of certain services provided by PVI to the Company under the terms of the Agreement. Under the Advisory Agreement, PVI will provide input on transaction sourcing and capital raising activities.
We look forward to reporting further progress during Fiscal 2018 in growing Europe's first listed diversified royalty company.
Nigel Birrell
Chairman
About Duke Royalty
Headquartered in Guernsey, Duke Royalty Limited has been established to provide alternative financing solutions to a diversified range of 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. For more information, visit dukeroyalty.com.
For further information:
Hot Features
Premium
Duke Royalty Limited Neil Johnson / Charlie Cannon-Brookes
+44 (0) 1481 741 240
Grant Thornton UK LLP Colin Aaronson / Samantha
(Nominated Adviser) Harrison / Carolyn Sansom
+44 (0) 20 7383 5100
Mirabaud Securities Peter Krens / Edward Haig-Thomas
LLP (Joint Broker)
+44 (0) 20 3167 7222
Cenkos Securities plc Julian Morse/ Michael Johnson
(Joint Broker)
+44 (0) 207 397 8900
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.
Interim Consolidated Statement of Comprehensive Income
For the period ended 30 September 2017
Period ended
Period ended 30 September
30 September 2017 2016
Unaudited Unaudited
Notes GBP GBP
Income
Cash received and receivable on royalty debt instruments 3 312,200 -
Effective interest adjustment on royalty debt instrument 3 88,128 -
------------------- --------------
Interest income from royalty debt instruments 400,328 -
------------------- --------------
Fair value movement on royalty debt instruments 3 53,645 -
Foreign currency gain 100,700 2
Net investment gain 554,673 2
------------------- --------------
Expenses
Support services fees 10 (451,439) (188,103)
Directors' fees 10 (54,500) (109,000)
Legal and professional fees (51,167) (124,628)
Consultancy fees 38,537 (38,125)
Restructuring costs - (15,071)
Other expenses (12,832) (23,222)
Administration fees (18,000) (28,500)
Audit fees (10,000) (15,500)
Travel & entertainment 10 (21,664) (73,700)
Registrar fees (6,718) (5,941)
Broker fees (18,329) -
Nomad fees (12,500) (15,083)
Foreign currency loss - -
Investment advisory fees 10 (12,500) (38,406)
Total expenses (631,112) (675,279)
------------------- --------------
Operating loss (76,439) (675,277)
Finance income - 72,496
Finance costs (1,700) (1,002)
Loss for the financial year end (78,139) (603,473)
Other comprehensive income - -
=================== ==============
Total comprehensive loss for the period (78,139) (603,783)
=================== ==============
Basic and diluted deficit per share (pence) (0.01) (7.66)
=================== ==============
All activities derive from continuing operations.
All income is attributable to the holders of the Ordinary Shares of the Company.
The notes form an integral part of these Interim Financial Statements.
Consolidated Statement of Changes in Equity
For the period ended 30 September 2017
Shares Shares to be Warrants Share Option
Issued issued Issued Reserve Retained Losses Total Equity
Notes GBP GBP GBP GBP GBP
At 1 April 2017 40,905,094 - - 124,412 (26,523,494) 14,506,012
Total
comprehensive
loss for the
period - - - - (78,139) (78,139)
Transactions
with owners
Shares to be
issued 7 - 341,439 - - - 341,439
Dividends 6 - - - - (226,887) (226,887)
Total
transactions
with owners - 341,439 - - (226,887) 114,552
----------- ---------------- --------- ---------------- ---------------- -------------
At 30 September
2017 40,905,094 341,439 - 124,412 (26,828,520) 14,542,425
=========== ================ ========= ================ ================ =============
At 1 April 2016 27,064,815 - 72,454 124,412 (25,191,366) 2,070,315
Total
comprehensive
expense for the
year - - - - (603,783) (603,783)
Transactions
with owners
Warrants
cancelled - - (72,454) - - (72,454)
Total
transactions
with owners - - (72,454) - - (72,454)
----------- ---------------- --------- ---------------- ---------------- -------------
At 30 September
2016 27,064,815 - - 124,412 (25,795,149) 1,394,078
=========== ================ ========= ================ ================ =============
The notes form an integral part of these Interim Financial Statements
Consolidated Statement of Financial Position
As at 30 September 2017
31 March
30 September 2017 2017
Unaudited Audited
Notes GBP GBP
ASSETS
Royalty debt instruments 3 7,255,099 -
Equity investments at fair value through profit and loss 4 - -
Total non-current assets 7,255,099 -
Trade and other receivables 8 15,253 381,467
Cash and cash equivalents 7,323,409 14,350,154
Total current assets 7,338,662 14,731,621
14,593,761 14,731,621
================== ===========
EQUITY AND LIABILITIES
Equity
Shares issued 7 40,905,094 40,905,094
Shares to be issued 7 341,439 -
Share option reserve 124,412 124,412
Retained losses (26,828,520) (26,523,494)
Total Equity 14,542,425 14,506,012
Current Liabilities
Trade and other payables 9 51,336 225,609
Total current liabilities 51,336 225,609
Total equity and liabilities 14,593,761 14,731,621
============= =============
Net asset value per Ordinary Share (excluding
shares held in Treasury) 0.32 0.32
----- -----
The notes form an integral part of these Interim Financial Statements
Consolidated Statement of Cash Flows
For the period ended 30 September 2017
Period ended Period ended
30 September 2017 30 September 2016
Notes GBP GBP
Cash flows from operating activities
Royalty instrument advanced (7,046,200)
Receipts on royalty debt instrument 3 245,074 -
Finance costs paid (1,699)
Other interest - 42
Proceeds from the sale of equity investments - 516,535
Operating expenses paid (370,733) (760,115)
Net cash outflow from operating activities (7,173,558) (243,538)
Cash flows from financing activities
Net proceeds from share issue 273,000 -
Dividends paid 6 (226,887) -
Net cash inflow from financing activities 46,113 -
Net change in cash and cash equivalents (7,127,445) (243,538)
Cash and cash equivalents at beginning of period 14,350,154 1,625,749
Effect of foreign exchange on cash 100,700 -
Cash and cash equivalents at end of period 7,323,409 1,382,211
=================== ===================
The notes form an integral part of these Interim Financial Statements
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
Duke Royalty Limited ("Duke Royalty" or the "Company") is a closed-ended investment company with limited liability formed under the Companies (Guernsey) Law, 2008. The Company was incorporated in Guernsey on 22 February 2012 and its shares were admitted to trading on the London Stock Exchange's AIM on 9 July 2012. The Company's registered office is shown on page 23.
The Company's investing policy is to invest in a diversified portfolio of royalty finance and related opportunities.
The Company's shares are traded on AIM, a market operated by the London Stock Exchange.
2. SIGNIFICANT ACCOUNTING POLICIES a) Basis of preparation
The Unaudited Condensed Financial Statements ("Interim Statements") have been prepared in accordance with International Financial Reporting Standards ("IFRS"). The Interim Statements do not include all the information and disclosures required in annual financial statements, and should be read in conjunction with the Company's Annual Report and Consolidated Financial Statements for the year ended 31 March 2017 (2017 "Annual Report"), which were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and applicable Guernsey law.
In addition to the same accounting policies, presentation and methods of computation followed in these Interim Statements as were followed in the preparation of the 2017 Annual Report; the directors have made an early adoption of IFRS 9 in these Interim Statements. Trade and other receivables comprise prepaid expenses and are assessed using the simplified approach in respect of expected credit losses any such impact would be immaterial to the financial statements given the carrying value of trade and other receivables.
The early adoption of IFRS 9 was performed after a high-level assessment of the three aspects of IFRS 9 following its first investment in Royalty Debt Instrument. The preliminary assessment is based on currently available information and may be subject to changes arising from additional reasonable and supportable information being made available to the Company in the future.
Early adoption of IFRS 9 does not have any impact on the comparatives in these Interim Statements.
b) New and amended standards and interpretations
At the date of authorisation of these Interim Statements, the following standards and interpretations, which will become relevant to the Company but have not been applied in these Interim Statements, were in issue but not yet effective:
IFRS 7, Financial Instruments Disclosures - Amendments regarding initial application of IFRS 9* - effective for when IFRS 9 is applied.
IFRS 15, Revenue from contracts with customers - effective for periods commencing after 1 January 2018.
These standards will be adopted by the Company and its subsidiary when they become effective. The Directors anticipate that the adoption of these standards and interpretations in future periods will require additional disclosures but are not expected to have a material impact on the Financial Statements of the Company and its subsidiary.
The Company has early adopted only IFRS 9 and no other standard, interpretation or amendment that has been issued but is not yet effective.
c) Foreign currency
Items included in the Interim Statements are measured using the currency of the primary economic environment in which the entity operated ("the functional currency"). The Company's capital is disclosed using the currency of its primary economic environment as is for all fund-raising activities. The Interim Statements are presented in Pounds Sterling (GBP).
Transactions in currencies other than Sterling are translated at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the Interim Statement of Financial Position are retranslated into Sterling at the rate of exchange ruling at that date.
Foreign exchange differences arising on retranslation are recognised in the Interim Statement of Comprehensive Income.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the rate of exchange at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated into Sterling at foreign exchange rates ruling at the dates the fair value was determined.
d) Financial instruments
Financial assets and financial liabilities are recognised in the Interim Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are only offset and the net amount reported in the Interim Statement of Financial Position and Interim Statement of Comprehensive Income when there is a currently enforceable legal right to offset the recognised amounts and the Company intends to settle on a net basis or realise the asset and liability simultaneously.
Financial assets
The classification of financial assets at initial recognition depends on the purpose for which the financial asset was acquired and its characteristics. All financial assets are initially recognised at fair value. All purchases of financial assets are recorded at trade date, being the date on which the Company became party to the contractual requirements of the financial assets.
Receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These comprise assets that meet the business model test of holding to collect contractual cashflows and the contractual characteristics are solely repayments of principal and interest test. They are initially recognised at fair value on acquisition, and subsequently carried at amortised cost using the effective interest rate method less provisions for impairment. The simplified approach is adopted in respect of measurement of expected credit losses with life long expected credit losses recognised on inception where appropriate. Such losses are recognised in the statement of comprehensive income. The effect of discounting on these financial instruments is not considered to be material.
Fair value hierarchy
IFRS 13 requires disclosure of fair value measurements by level of the following fair value hierarchy.
Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can readily observe.
Level 2 - inputs are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.
Level 3 - inputs that are not based on observable market date (unobservable inputs).
Derecognition of financial assets
A financial asset (in whole or in part) is derecognised either (i) when the Company has transferred substantially all the risks and rewards of ownership; or (ii) when it has neither transferred nor retained substantially all the risks and rewards and when it no longer has control over the assets or a portion of the asset; or (iii) when the contractual right to receive cash flow has expired. Any gain or loss on derecognition is taken to the Interim Statement of Comprehensive Income as appropriate.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments with an original maturity of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Investments at fair value through profit or loss
Royalty instruments
Royalty debt instruments are recognised or derecognised on completion where a purchase or sale of the royalty is under a contract. Depending on the characteristics of the contract of the royalty debt instrument, the contract will be classified as a royalty debt instrument or a royalty equity instrument.
Royalty debt instrument
Due to the nature of the royalty debt instrument, in accordance to IFRS 9, they are classified as debt instruments carried at fair value. Whilst the business model of the Company is to collect the contractual cashflows, the product fails the solely repayment of principal and interest test. This is on the basis that the return is linked to a fluctuation revenue stream of the Investee and so such instruments are recognised at fair value through profit or loss. Upon initial recognition an effective interest rate is computed based on the estimated future cashflows under the contract. Fixed effective interest income determined based in the original effective rate is recognised in the income statement with royalty interest receipts reducing the carrying value of the instrument. At each reporting date the instrument is fair valued with movements in the fair value recognised as movement in fair value through profit or loss.
Royalty equity instruments
Similar to debt instruments, equity instruments are carried at fair value at each reporting date, based on the estimated future cash flows from the underlying investee. All valuation movements are recognised at fair value through profit or loss. Royalty dividends receipts are recognised in the income statement as they are due.
Financial liabilities
The classification of financial liabilities at initial recognition depends on the purpose for which the financial liability was issued and its characteristics.
All financial liabilities are initially recognised at fair value. All purchases of financial liabilities are recorded on trade date, being the date on which the Company becomes party to the contractual requirements of the financial liability. Unless otherwise indicated the carrying amounts of the Company's financial liabilities approximate to their fair values.
The Company's financial liabilities consist of any financial liability measured at amortised cost.
Financial liabilities measured at amortised cost
These include loans and borrowings, payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method.
Derecognition of financial liabilities
A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires or is cancelled. Any gain or loss on derecognition is taken to the Interim Statement of Comprehensive Income.
Capital
Financial instruments issued by the Company are treated as equity if the holder has only a residual interest in the assets of the Company after the deduction of all liabilities. The Company's Ordinary Shares and Warrants are classified as equity instruments.
The Company considers its capital to comprise its Ordinary Share Capital, Warrants and retained losses.
Equity instruments
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from proceeds.
Share based payments
The Company operates an equity settled Share Option Plan for its directors and key advisers. As the shares issued vest immediately the Company recognises the full expense within the Statement of Comprehensive Income with the corresponding amount recognised in a share option reserve. There were no additional share options awarded during the period.
The Company also settles a portion of expenses by way of share based payments. These expenses are settled based on the fair value of the service received as an expense with the corresponding amount increasing equity. During the period there were no expenses paid by way of share based payments.
e) Expenses
Expenses are accounted for on an accrual basis.
f) Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, as a whole. The key measure of performance used by the Board to assess the Company's performance and to allocate resources is the total return on the Company's net asset value, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in these Interim Financial Statements.
For management purposes, the Company's new investment objective now is to focus on one main operating segment, which is to invest in a diversified portfolio of royalty finance and related opportunities. At the end of the period the Company has one investment into this segment and has derived income from it. Due to the Company's nature it has no customers.
3. ROYALTY DEBT INSTRUMENTS
Period ended Period ended
30 September 2017 30 September 2016
Unaudited Unaudited
GBP GBP
Brought forward
Debt instrument amounts advanced 7,046,200 -
Net effective interest 400,328 -
Royalty debt payment received and receivable (312,200) -
------------------- -------------------
Sub total 7,134,328 -
Royalty debt payment receivable 67,126 -
------------------- -------------------
Carried forward 7,201,454 -
------------------- -------------------
Unrealised gain 53,645 -
Brought forward - -
Movement - -
Carried forward - -
Fair value
Brought forward - -
------------------- -------------------
Carried forward 7,255,099 -
=================== ===================
A 1% increase or decrease in the growth rate would increase/(decrease) net assets attributable to shareholders by GBP31,385.
A reduction/increase to the discount rate by 25 basis points would increase/(decrease) net assets attributable by GBP1,746,413 and (GBP1,230,151) respectively.
During the period the Company identified an investment opportunity and entered into a Loan Agreement with Temarca B.V. The Company has advanced an amount totalling EUR8 million for a duration of 25 years which generates monthly income of EUR85,333 less any Adjustment Factor. The Adjustment Factor is based mainly on Temarca B.V.'s gross revenue. Income recognised for the period in the Statement of Comprehensive Income is computed on a Cash on Cash Yield of 12.80% applied for the duration of the loan.
Given the characteristics of the instrument it is classified as a royalty debt instrument and fair valued at Level 3 as it is based on unobservable inputs.
The royalty debt instrument is modelled based on the expected cashflows receivable under the contract using an effective interest rate that exactly discounts the estimated cashflows over the future life of the contract. Given the final draw down on Temarca B.V. closed in September 2017 there have been no movements in the fair value since initial recognition.
4. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
The Company still holds three unlisted investments in mining entities from its previous investment objectives. The Board do not consider there to be any future cash flows from these investments and were fully written down to nil value.
The fair value of investments in the three unlisted entities is derived by applying a discount rate, as deemed appropriate by the Board. All of the Company's investments held at fair value through profit or loss are valued at Level 3 as are based on unobservable inputs.
The three investments were regarded as immaterial for the purpose of these interim financial statements therefore no sensitivity analysis has been performed.
5. TAXATION
The Company is resident for tax purposes in Guernsey where it is subject to taxation. The current taxation rate applicable to the Company is 0%.
6. DIVIDS
The Board has declared interim dividends of GBP226,887 on 22 June 2017 and GBP226,887 on 21 September 2017 for the period ended 30 September 2017 (period ended 30 September 2016: GBPnil). As at 30 September 2017, the dividends totalling GBP226,887 declared on 22 June 2017 were paid to the shareholders and recognised in the Interim Statements. The dividends declared on 21 September 2017 were paid in October 2017 and will be recognised in the next accounting period.
7. SHARES ISSUED
Number of ordinary Shares in issue
Number of ordinary Shares in issue GBP
Authorised
Unlimited number of shares of no
par value - -
----------------------------------- ------------------------------------
Allotted, called up and fully
paid:
As at 1 April 2017 45,377,459 40,905,094
Share issued - -
As at 30 September 2017 45,377,459 40,905,094
=================================== ====================================
859,614 shares are due to be issued for the period ended 30 September 2017. The 859,614 shares relate to shares payable under the support services agreement on completion of sourcing a royalty instrument as disclosed in note 10 and will be allocated to Arlington and Abingdon equally at a total cost of GBP341,439.
This amount has been recognised within the statement of comprehensive income.
8. TRADE AND OTHER RECEIVABLES
31 March
30 September 2017 2017
GBP GBP
Prepayments and accrued income 15,253 6,967
Investments costs incurred - 31,500
Proceeds due from share issuance - 343,000
15,253 381,467
================== =========
9. TRADE AND OTHER PAYABLES
31 March
30 September 2017 2017
GBP GBP
Broker fees 10,830 -
Audit fees 12,500 25,000
Directors fees and expenses 3,235 35,616
Investment costs incurred - 31,500
Consultancy fees - 133,493
Legal fees 23,750 -
Other creditors 1,021 -
51,336 225,609
================== =========
10. RELATED PARTIES
Directors were entitled to the following remuneration during the period;
Charge for period Outstanding at Outstanding at
Charge for period to period end period end
to 30/09/2017 30/09/2016 30/09/2017 30/09/2016
GBP GBP GBP GBP
Neil Johnson 25,000 50,000 - -
Charles
Cannon-Brookes 17,500 35,000 - -
Nigel Birrell 6,000 12,000 - -
James Ryan 6,000 12,000 - -
Mark Le Tissier - - - -
54,500 109,000 - -
------------------- ------------------- ------------------- --------------------
Directors were also reimbursed for GBP8,040 (30 September 2016: GBP61,347) for expenses incurred on business on behalf of the Company.
Mark Le Tissier, a Director of Trident Trust (Guernsey) Limited waived his entitlement to a fee for his directorship.
The Investment Committee assists the Company in analysing and recommending potential royalty transactions. Along with Neil Johnson, the Investment Committee is made up of David Campbell, Andrew Carragher, John Romeo, Andrew Chadwick-Jones, Justin Cochrane, and Jim Webster. During the period GBP12,500 (30 September 2016: GBP20,000) was paid. There was no outstanding balance payable to the committee members at the end of the period (30 September 2016: GBP5,000). Only Jim Webster earns a fee for his role as chief investment officer of the Company. Those fees paid were as follows:
Charge for Charge for Outstanding at Outstanding at
Entitlement per period to period to period end period end
annum 30/09/2017 30/09/2016 30/09/2017 30/09/2016
GBP GBP GBP GBP GBP
A Carragher - - 10,000 - 5,000
J Webster 25,000 12,500 10,000 - -
12,500 20,000 - 5,000
----------------- ----------------- ---------------- ----------------
The related parties' interests in the share capital of the Company are as follows:
Holding Holding
at Additional at Percentage
31 March shareholdings 30 September of share
Name 2017 in period 2017 capital
Charles Cannon-Brookes 1,408,517 - 1,408,517 3.10%
Arlington Group
Asset Management
Limited 1,357,365 - 1,357,365 2.99%
N Johnson 1,160,000 - 1,160,000 2.56%
J Cochrane 690,000 - 690,000 1.52%
J Ryan 650,000 - 650,000 1.43%
N Birrell 525,000 - 525,000 1.16%
Abinvest Corporation 500,000 - 500,000 1.10%
Charles Cannon-Brookes is a Director and shareholder of Arlington Group Asset Management Limited ("Arlington") which owns 1,357,365 Ordinary Shares and is therefore interested in 2,765,882 Ordinary Shares representing 6.10 per cent of the total voting rights.
Neil Johnson is a Director of Abinvest Corporation and Abingdon Capital Corporation. Abinvest Corporation is a wholly owned subsidiary of Abingdon Capital Corporation. He owns 500,000 Ordinary Shares through Abinvest Corporation and 10,000 Ordinary Shares through RBK&C Trust and therefore has an overall interest in the Ordinary Shares of the Company of 1,660,000 Ordinary Shares representing 3.66 per cent of the total voting rights.
Justin Cochrane, a current member of the Company's Investment Committee is also a full time Executive Vice President at Abingdon Capital Corporation ("Abingdon"). Mr Cochrane overall interest in the Ordinary Shares of the Company is 690,000 Ordinary Shares representing 1.52 per cent of the total voting rights.
The Company has a share option scheme ("the Scheme") to incentivise Directors, staff and certain key advisers and consultants to deliver long-term value creation for shareholders. The Company operates an equity based scheme for directors and specified consultants.
The related parties' interest in the share options of the Company are as follows:
5 year
option,
vesting
immediately
granted Exercise
Name on Total options price GBP
Nigel Birrell 4 Sep 2015 85,000 0.75
Arlington Group
Asset Management 4 Sep
Limited 2015 85,000 0.75
Neil Johnson 4 Sep 2015 85,000 0.75
James Ryan 4 Sep 2015 85,000 0.75
J Cochrane 4 Sep 2015 70,000 0.75
Abingdon is entitled to an annual service fee of GBP196,000 and Arlington is entitled to an annual service fee of GBP24,000 per annum. An amount totalling GBP110,000 was paid to Abingdon and Arlington during the period (30 September 2016: GBP188,103).
In addition to the service fee, Abingdon shall have the right from time to time to be issued and allotted up to 1,500,000 ordinary shares of no par value in the Company following the conditions noted below.
-- each time an investment originating from Abingdon is completed, Abingdon shall be entitled to be issued such number of Incentive Shares (rounded down to the nearest whole number) as is equal to 5% x A/B
-- to the extent that an investment does not originate from Abingdon but Abingdon assists the Company in the negotiation and completion of such investment, Abingdon shall be entitled, upon completion of such investment, to be issued such number of Incentive Shares (rounded down to the nearest whole number) as is equal to 2.5% x A/B.
For the purposes of the calculation "A" is the gross value of the investment and "B" is either: (i) if the investment is financed (in whole or in part) through an offering of ordinary shares of no par value in the capital of the Company, the price per share at which such ordinary shares are offered, or (ii) if the Investment is financed by any other means, the weighted average closing price on AIM of the ordinary shares for the 20 Business Days immediately preceding the completion of the Investment.
859,614 shares for a total cost of GBP341,439 are due to be issued as at the end of the period following the successful completion of the first royalty debt instrument of the Company.
The 859,614 shares relate to shares payable under the support services agreement on completion of sourcing a royalty instrument as disclosed in note 10 and will be allocated at the discretion of Abingdon, who have indicated that they will request the allocation to be made to Arlington and Abingdon equally to reflect the collective efforts of both companies to date.
The total charge to the Interim Consolidated Statement of Comprehensive Income for Abingdon was GBP276,413 of which GBP7,693 comprises disbursed costs which are included in travel and entertainment expenses (2016: GBP181,198) and GBP170,719 in relation to shares to be issued upon successful completion of the first royalty debt instrument (2016: GBPnil) There were no outstanding amounts at the end of the period (2016: GBPnil).
The Company has a Support Service Agreement with Arlington whereby the services to be provided by Arlington include global deal origination and on-going investment management, including preparation of investment reports, performance data and compliance with the Company's investing policy.
The total charge to the Interim Consolidated Statement of Comprehensive Income for Arlington was GBP191,230 of which GBP8,511 comprises of disbursed costs which are included in travel and entertainment costs (2016: GBP53,163) and GBP170,719 in relation to shares to be issued upon successful completion of the first royalty debt instrument (2016: GBPnil). An amount of GBP3,235 was outstanding for travel and entertainment expenses at the end of the period (2016: GBPnil).
The Directors are not aware of any ultimate controlling party.
11. CONTINGENT LIABILITIES
At 30 September 2017 there were no contingent liabilities (2016: GBPnil).
12. POST BALANCE SHEET EVENTS
On 6 October 2017 the Company announced that it had entered into its second royalty financing agreement with Lynx Equity (U.K.) Limited ("Lynx UK"), the UK-based subsidiary of Lynx Equity Limited ("Lynx"). The Company has committed GBP 7.0 million, with an initial tranche of GBP 4.5 million to be drawn down immediately, with the additional GBP 2.5 million being drawn down at the completion by Lynx UK of an imminent acquisition.
The Financing represents the beginning of the relationship with Lynx as a Royalty Partner, as Duke has become Lynx's preferred European capital provider, with the potential to provide a further GBP 8 million of funding equating to GBP 15 million over time.
The Remuneration Committee approved the Company's long-term incentive plan (LTIP) as described in Part 5 of the Admission Document.
The Company also entered into an Advisory Agreement with Partners Value Investments LP ("PVI"), and approved the grant of 2,000,000 5-year warrants to PVI, exercisable at GBP0.42, in consideration for the provision of certain services provided by PVI to the Company under the terms of the Agreement.
Dividends amounting to GBP 226,887 declared in September 2017 were paid in October 2017.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KDLFBDFFZFBE
(END) Dow Jones Newswires
November 08, 2017 02:05 ET (07:05 GMT)
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