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DUKE Duke Royalty Limited

-0.30 (-0.94%)
Last Updated: 08:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Duke Royalty Limited LSE:DUKE London Ordinary Share GG00BYZSSY63 ORDS NPV
  Price Change % Change Share Price Shares Traded Last Trade
  -0.30 -0.94% 31.50 39,783 08:00:00
Bid Price Offer Price High Price Low Price Open Price
31.00 32.00 31.50 31.50 31.50
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 31.06M 19.59M 0.0480 6.56 128.45M
Last Trade Time Trade Type Trade Size Trade Price Currency
09:29:58 O 5 32.00 GBX

Duke Royalty (DUKE) Latest News

Duke Royalty (DUKE) Discussions and Chat

Duke Royalty (DUKE) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type

Duke Royalty (DUKE) Top Chat Posts

Top Posts
Posted at 01/12/2023 08:20 by Duke Royalty Daily Update
Duke Royalty Limited is listed in the Unit Inv Tr, Closed-end Mgmt sector of the London Stock Exchange with ticker DUKE. The last closing price for Duke Royalty was 31.80p.
Duke Royalty currently has 407,762,000 shares in issue. The market capitalisation of Duke Royalty is £128,445,030.
Duke Royalty has a price to earnings ratio (PE ratio) of 6.56.
This morning DUKE shares opened at 31.50p
Posted at 22/11/2023 12:43 by rogerrail
Is that capital appreciation of the net assets or the share price ? does the share price really matter if earnings of 1.95p per share exceed the dividends of 1.4p per share?
Posted at 13/7/2023 10:22 by clive7878
Future pe of 9 with a 8% divi to support the share price.
But will the share price get back up to the dizzy heights of 45p per share?
The write up in the IC last week was encouraging,
but then so have others that have not moved the share price upwards.
Posted at 14/4/2023 08:50 by melody9999
Disagree BTG. Carcosa is putting forward a reasoned argument which is very credible - unlike many you see on ADVFN. And even then the final comment "share price for Duke seems well below that of what even the most realistic pessimist could justify".

Cfro talks about the wider picture. Since 2017 - when I think DUKE commenced operations, the world has gone through some tumultuous times. But DUKE has navigated this OK - even when travel stopped after COVID they exited Temarca, a river cruise operation with just -2% IRR. Other exits have been positive.

So 6 years later, could they suffer what I think would be their first partner that goes into liquidation - of course. But that would just be a bump in the road. Alternatively DUKE may go another 6 years without such an event.

In the meantime their revenues are growing rather quickly - from £3.9M in Q3 22 to £5.6M in Q3 23.

Based on what is actually happening, rather than what may or may not happen, I think there is plenty to like wrt DUKE.

As an aside, it seems a trend now for News programmes - especially BBC News - to report what might, or could possibly, happen in the future. Alternatively some special report or analysis on some far flung destination based on happenings in previous months or years. Sometimes these are even the headline story.
Actually I only want to know what has happened today - that is todays news!
Posted at 12/4/2023 05:12 by carcosa
Just because a company has profitable operations does not mean it cannot go bankrupt.

High debt: Even if a company is profitable, it may still have a significant amount of debt which unsurprisingly tends to be a feature of Duke's business. If the company is unable to service its debt obligations, it may go out of business.

Poor cash flow management: Again, a company may have profitable operations, but if it doesn't manage its cash flow effectively, it may run out of money to pay its bills and employees . This can ultimately lead to bankruptcy.

There are other somewhat less likely issues such as if a company is facing a costly legal battle or lawsuit, it can deplete its resources and ultimately lead to bankruptcy, even if it has profitable operations.

Market conditions: Changes in the market or industry can lead to decreased demand or increased competition, which can cause a decline in profits and eventually lead to bankruptcy. i.e. a declining profitable business.

Mismanagement: Poor management decisions, such as expanding too quickly or investing in unprofitable ventures, can lead to financial difficulties and ultimately result in bankruptcy, despite having profitable operations in the past.

In a similar vein is Lynx Equity (UK). After Duke handed out another 1.5m (Total 15m) follow on to keep the lights on in March 2022 by July 2022 the company only had 0.27m in cash. Now that would be fine if they had spent most of it on aquiring something but in actual fact their investment interests went from 13m to 11.7m.

So in reality that was a loss of 1.3m + 1.5m = 2.8m which roughly concurs with an increase in their profit and loss reserve; now standing at 9.2m

However they also have 10.6m in debtors - They often appear to have a very large debtor book so its a relatively stable figure fwiw. This leads to a positive and healthy positive 11.2m in net assets (down from 16.7m the year before on a current basis. However factoring in the 15.2m owed longer term (mostly to Duke I assume) it results in a negative equity of 4m.

Now if Lynx get to a profitable state then the long term nature of Duke's loan is nothing to be overly concerned about. However, that is a big 'if'

Within the accounts they state that the company is dependent on the company's ultimate parent undertaken and that they believe finances will be available if required to maintain the going concern basis.

So overall yet another (long term) poor business Duke are involved with which again makes me question their screening process in the early days of the company.

However...whilst Lynx appears to be much worse state than even Trimate, Lynx is a subsidiary of a huge company based in the US called Lynx Equity hxxps:// which in itself is a very very interesting company. With such a thriving parent company we don't know what (if any) guarantees they may have provided for Duke, or if it suits them to have an overseas subsidiary to be making a loss. It just gets more complicated and us shareholders will never be in a position to evaluate the risk of Lynx Equity (UK) being in Duke's portfolio.

But lets not get carried away. Even if Trimate was to collapse (and I am not saying it will) the overall thrust of my concern is why did Duke enter into such partners to begin with. Was Trimate seriously the best they could find at the time? As a consequence Duke is now a significant equity holder which is not what us investors signed up for. It raises concern as to the quality of the portfolio. The latter partners, from what I can tell, are worlds above in terms of quality businesses than the early ones.

I reckon current run rate is 6m up from Dukes last reported 5.6. It's one thing to invoice for that amount it's quite another to get it paid. On that front it was very pleasing to see a reduction in receivables of 10m reduce to 3m in the last accounts. Should be remembered that a further 2.2m cash is scheduled to be received before before 30 June 2023 from the Riverboat sale. So it appears Duke are doing a great job of getting paid.

The 6% collar sounded a great idea before inflation became a household word again. Without new business the most Duke's revenue can increase is significantly below the current inflation rate. Profitability could decline in having to pay increased interest of Duke's debt.

Having said all of that, the current share price for Duke seems well below that of what even the most realistic pessimist could justify and over the long term inflation/interest rates are forecast to decline anyway.

You have to start asking whether or not todays share price is offering exceptional value.

BTG. I meant 2021 not 2011. Typo. Sorry. Imagine what would happen if you went through Duke's business with such an eye on their figures as opposed to mine!

podgyted: Yes I moved away from Stocko a few years ago. Have reduced by forum postings considerably over the last few years. Occasionally post on TLF & Twitter. Still miss the TMF days lol!
Posted at 05/4/2023 07:01 by carcosa

I have spoken to the company and have always received a professional replies. Some things I have got right and some things I have got wrong.

That is not to say I don't question their rationale or do my 'DYOR'.

I have been invested since 2011 so am quite happy with returns to date.

I had previously addressed your concern regarding company's results timescales in my second to last paragraph in my prior post.

At a Duke level the business is relatively easy to understand but investors should also question the board, question assumptions, question risks. That is in some part the responsibility of investors.

Should an investee company go bankrupt then retail investors should be prepared. i.e. not be entirely surprised (and recognise that Duke themselves have discussed this very point), consider the effect on Duke - whilst a 'blow' it's far from a death knell for Duke - although as with bank runs etc., investors will bail out questioning (rightly or wrongly) the quality of their investees.

The question is why is the share price so low? My view is that it is being seen as a Venture Capital type company; which does provide a large potential upside.

If I was so negative with Duke I would not be invested; but that does not preclude me from examining the negative side of the story instead of burying my head in the ground lol!
Posted at 05/4/2023 06:01 by carcosa
"so other than this Trimite company that is not paying its dues, our other partners are all in the black, right?"

If you go through the accounts of those available in Companies House (see post #896) many of those companies are struggling and those that are not are more or less breaking even. There does not seem to be any outstandingly profitable companies in the visible portfolio.

Many detractors have indicated that the terms of a Duke loan are very onerous and ask why would these companies not go through traditional lending facilities.

Duke have addressed these concerns in the past and in practically all of their presentations. It's up to investors to determine the quality of those rebuttals.

It is perhaps surprising Duke do not have profitable any high-tech companies in their portfolio.

Given Duke claim they do a lot of due diligence, albeit via a third party, the companies do not appear to be of high quality and several depend on Duke to remain in business. Recent investments however eg New Path Fire and Security Ltd do seem to be a step up in quality. So perhaps after DUKE have made a land grab to get them started they are becoming less risk tolerant which may explain why so few deals have been made in the last year or so.

Assuming that the realisable NAVs are lower than accounting standards (which is not uncommon) and that profitable company disposals are like a venture capital company's exit via an IPO. There are certainly significant differences, but overall, it's not too far off the mark.

it would be reasonable for investors to view Duke as a venture capital company (especially given their high equity ownership to the extent they are the majority shareholder in Trimate). Perhaps that could explain why Duke trade well below NAV.

Given companies' house have results that are relatively old for the companies they are to some extent reflecting businesses exiting the COVID era so maybe things are not so bad; but many of those businesses performed poorly prior to COVID.

Fortunately investors have free access to Companies House and therefore can DYOR.
Posted at 12/12/2022 08:05 by cwa1
Refinance and Upsize of Credit Facility to £100 million on
Improved Terms with Fairfax Financial

Duke Royalty, a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and North America , is pleased to announce that it has entered into a new £100 million credit facility agreement (the "New Credit Facility") with Fairfax Financial Holdings Limited and certain of its subsidiaries ("Fairfax").

The material terms of the New Credit Facility are as follows:

· Term facility of up to £100 million to replace Duke's existing £55 million term and revolving facilities

· Five-year term, expiring in January 2028 with a bullet repayment on expiry and no amortisation payments during the five-year term

· Interest rate equal to SONIA plus 5.00% per annum, which represents an improvement of 225bps on Duke's existing rate of SONIA plus 7.25%

· As part of the deal, Duke will issue 41,615,134 warrants to Fairfax with a five-year maturity and strike price of 45 pence reflecting the strategic nature of the deal

· Initial drawdown of the New Credit Facility expected to occur in mid/late January 2023 coinciding with the expiry of the non-call period enshrined in Duke's existing credit facilities

The New Credit Facility will provide Duke with a significant amount of additional liquidity and will push out the Company's requirement for additional equity capital. Furthermore, the New Credit Facility comes at a lower cost to the Company's existing credit facility thereby having an immediate and material impact on the free cash flow of the Company.

Neil Johnson, CEO of Duke Royalty, said:

"I am delighted to announce this upsized credit facility with Fairfax on improved terms for Duke shareholders. Fairfax is an internationally recognised and well respected company. Both Duke and Fairfax have similar philosophies of investing in a supportive way over the long term and I believe that this is the start of a long standing and mutually beneficial relationship.

"The upsizing of the New Credit Facility will allow Duke to accelerate its growth and deployment schedule without any near-term equity dilution. More strategically, Fairfax and Duke believe our partnership can benefit more businesses looking for long-term, flexible capital solutions by increasing Duke's capital base and diversification, as well as benefit Duke's shareholders through higher free cash flow per share."

Prem Watsa, Chairman and CEO of Fairfax, said:

"We are impressed with the degree to which Duke's investing philosophy aligns with our own - focusing on lending to established, profitable, cash-generating, well-managed companies, with incentivised management teams. We are delighted to be partnering with Duke and believe that there is a large group of companies that can benefit from Duke's long-term flexible support."
Posted at 17/7/2022 09:09 by btgman
Looking at the current yield at 8% I still have a view that share price is undervalued but where should it be?

Duke Share price at varying yields
6.5% 43.07p

There are many things to consider and to compare against but all of the above are higher than the FTSE 100 average:-

Average FTSE 100 yield is under 4%
Highest is circa 7.5% tobacco companies
Lowest 2% with a small number paying nothing

There are stocks around in the FTSE 250 paying 9%+ but I would argue the share price is likely to be more volatile than Duke in the current climate.

Duke have 30 year contracts in place with over 20 Royalty Partners linked to turnover across multiple sectors and countries with positive royalty kickers likely in September 2022 results announcement.

Hidden benefits also exist with potential for over £30m of exit fees as Royalty partners exit at some point. Recycling of this cash and the compounding effect is powerful as highlighted previously.

Finally we have many equity stakes in our Royalty partners valued in accounts at circa £3.5m upside for this is quite significant.

So back to original question where should share price be I think 6% would be a decent rate of dividend return and given the 6% kickers and equity stakes I don't feel that would be challenging which puts Duke share price target at 46.67p v the current 32.5p

Posted at 27/4/2021 14:46 by btgman
Really disappointed to have missed the IC Forum just had something else on. Once the funds are re-invested Duke share price should kick on. I suspect we should be hearing news fairly soon

Posted at 16/11/2020 13:30 by red ninja
Yep looks like Duke share price has still got legs.

According to lse website Duke Royalty has no shorters.

As previously stated Investor Champion tip site do not appear to be backers, but Downings and other investment houses appear to like them.
Duke Royalty share price data is direct from the London Stock Exchange

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