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
  1.00 2.25% 45.50 197,428 08:31:40
Bid Price Offer Price High Price Low Price Open Price
45.00 46.00 45.50 44.50 44.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 16.06 5.75 7.9 163
Last Trade Time Trade Type Trade Size Trade Price Currency
13:19:44 O 1,101 45.41 GBX

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Duke Royalty Daily Update: Duke Royalty Limited is listed in the General Financial sector of the London Stock Exchange with ticker DUKE. The last closing price for Duke Royalty was 44.50p.
Duke Royalty Limited has a 4 week average price of 43.50p and a 12 week average price of 38.50p.
The 1 year high share price is 47.75p while the 1 year low share price is currently 19.70p.
There are currently 358,011,485 shares in issue and the average daily traded volume is 529,230 shares. The market capitalisation of Duke Royalty Limited is £162,895,225.68.
piedro: FY2021 Financial Results Presentation September 2021 hTTps://www.dukeroyalty.com/wp-content/uploads/2021/09/FY21-Duke-Results-Presentation.pdf Recording of todays' web conference ... hTTps://presentations.investormeetcompany.com/investor-meet-company/DUKE-ROYALTY-LIMITED-Results-for-the-year-ending-30-June-2021?bmid=38b37123bfe8
egrid1: 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.
egrid1: 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?
johnroger: Simon Thompson Duke Royalty (DUKE:40p), an Aim-traded company that makes its money by providing capital to companies in exchange for rights to a small percentage of their future revenues, is putting to good use the £35m proceeds from April’s oversubscribed equity placing (at 35p a share) and an increased revolving credit facility of £35m. A new €10m (£8.6m) royalty agreement with Fairmed Healthcare gives Duke exposure to a company operating in well-established markets that have strong underlying demographic growth prospects. Fairmed is a provider of high quality generic prescription medicines, over-the-counter pharmaceuticals, and dietary supplements in various EU countries. It is majority owned by a subsidiary of Strides Pharma Science (STAR:NSI), a £681m market capitalisation Indian listed pharmaceutical company. Structured as a senior secured loan, the 30-year royalty agreement sits within Duke’s typical investment terms (12 to 15 per cent annual royalty) as well as diversifying Duke’s portfolio. House broker Cenkos Securities is maintaining adjusted pre-tax profit estimates of £8.6m for the financial year to 31 March 2022, up from £5.2m in 2020/21, but analyst James Fletcher notes that Fairmed is “an additional investment above and beyond those we expected….and should further deployments [into new royalty partners] occur as expected, we would upwardly revise forecasts.” To put the scale of potential upgrades into perspective, Duke’s pipeline of deals includes an £11m investment in an IT managed solutions business, £7.5m funding to a Canadian engineering and construction business, and £3.8m of funding to an existing royalty partner to facilitate the acquisition of a profitable company. Cumulatively, these three deals alone could generate £3m of annualised cash receipts in addition to £1.1m from the Fairmed deal, a hefty sum in relation to Cenkos’ £12.7m cash receipt forecast for the 2021/22 financial year. Moreover, with Duke’s cash receipts increasing from £2.5m to £2.8m in the last quarter, so more than covering annual operating costs of £2.3m, then a significant amount of incremental cash receipts is now being converted into operating profit. Expect Cenkos to push through material earnings upgrades in due course. Improving cash flow is good news for the quarterly dividend of 0.55p a share, too. Trading on a price-to-book value ratio of 1.3 times, offering a dividend yield of 5.5 per cent and a prospective yield of 6.75 per cent, I feel the 38 per cent re-rating since I included the shares in my 2021 Bargain Shares Portfolio has further to run. That’s because based on full deployment of Duke’s available liquidity, my financial models suggest the company could be generating annualised cash receipts of £22m and free cash flow of £12.2m (3.4p a share) in the 2022/23 financial year to support a 3.1p annual dividend. A target price of 50p is not unreasonable given that upward resets of royalty payments from existing partners and a reversal of last year’s Covid-19 induced asset impairments should drive up NAV sharply. Buy.
red ninja: Latest Downing Strategic I.T. comment :- Duke Royalty PLC (Duke) (3.30% of net assets) Cost: £2.02m. Value as at 28 February 2021, £1.41m Background Duke Royalty provides alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and North America. Duke Royalty's royalty investments are intended to provide robust, stable, long term returns to its shareholders and has the benefit of having first mover advantage in the European Royalty Finance market. Update to the investment case Positive trading update Follow-on investments into existing Royalty Partners Successful exit from Royalty Partner Appointment of new CIO Reinstated cash dividend Progress against investment case The challenges of the last 12 months have been well navigated by Duke, with the period acting as a good test of the resilience of the business model. The royalty partner that gave the most cause for concern during the pandemic for us as investors was the River Boat Cruise operator Temarca. On 31 March 2021 Duke announced that this position had been exited for negative IRR of only -2%. This has been very reassuring for us and demonstrates management’s ability to step in and rescue value under extreme circumstances. Duke raised a further £32 million to continue deploying its strategy on 1 April 2021. This was well supported and has acted as a positive catalyst for the share price. The volatile macro environment presented by the pandemic has created opportunity for Duke. Banks have tightened SME lending criteria whilst business cashflows have been put under more pressure, and demand for more flexible, alternative sources of capital remains very strong. As a first mover and leader in the UK and European corporate royalty space, the group has a significant opportunity to build and further diversify its portfolio. Importantly, it has significant liquidity available for new deployments, which adds to management’s high level of confidence for 2021. Https://www.investegate.co.uk/downing-strategic-micro-cap-in--dsm-/gnw/final-results-and-notice-of-investor-presentation/20210510070000H3815/
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 AIMHO GLA BTG
btgman: Interesting podcast Twin Pete's. I think the debate around Duke underling quarterly Royalty of £2.5m which appears to be increasing and the likely impact this will have on the dividend. I will be surprised if we do not see an increase in the April dividend. The share price is currently at circa 14 times dividend as are the 2 Canadian Royal companies that I looked at. Assuming the dividend increases one would expect the share price to follow. Covid aside Duke appears to have been sat at over 40p for most of the last 4 years and quite significantly higher, I don't really see any reason that is isn't back above these levels in the near term. AIMHO GLA BTG
johnroger: Those readers looking for an AIM share tip which would seem to have significant recovery potential could do worse than invest in DUKE ROYALTY. It will probably come as no surprise to readers to learn that the share price has more than halved this year, falling from a high of over 50p at the start of the year to a low of 17.5p in April. Although the share price has rallied subsequently, it still stands at just over 50% of the 2020 high, and the positive trading statement released last Thursday indicates that better times may lie ahead. Duke Royalty is an unusual company operating in an interesting niche market, providing royalty finance to companies in the UK and Europe. The business of royalty finance is well-established in North America, notably Canada, and the founders of the business decided that the business model could be replicated over here. Essentially, the business provides finance to SME’s in exchange for a percentage of the latter’s future revenues. This allows the business owners to retain control over their company as Duke does not take an equity stake whilst also providing the business owners with another source of capital. There is also no refinancing risk as the royalty payments made by the borrower include both principal and interest and these repayments are made over the long term. Last week, the group issued a trading statement including the news that it intends to pay a dividend of 0.5p per share foe the upcoming quarter, which covers the three month period to 31 December. The group had 12 royalty partners at the start of the pandemic and seven of these have maintained their monthly cash payments to Duke throughout the period. Four of the five royalty partners who entered into forbearance agreements have now resumed payments and in some cases this has resulted in Duke taking equity stakes in the businesses in lieu of the payments that were not made. In last week’s statement, the company also confirmed that it has substantial capital to deploy and, with the current outlook for SME’s being challenging, this is expected to provide significant investment opportunities going forward. BUY
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.
johnroger: This is the article referred to in the above posts. The analysis seems a little superficial. Duke is one of my largest holdings but thought I would copy the article [free to read]in the hope it might encourage a little more discussion. Bazzer1000 thank you for your research. This royalty financing group now has considerable equity exposure to numerous companies of questionable worth and that’s even before one factors in the considerable impact of the pandemic. There are far too many red flags for us! Duke Royalty (LON: DUKE), the finance provider adopting a royalty lending model, issued what at first glance appeared to be an encouraging update for its 3rd quarter ending 31 December, with the reinstatement of a 0.5p quarterly dividend. However, delve deeper and it appears far from rosy. Cash revenue for the period, being cash distributions from its Royalty Partners and cash gains from sales of equity assets, is anticipated to increase to £2.5m, compared to £2.0m in Q1 FY21 and £2.4 m in Q2 FY21. Of Duke's 12 Royalty Partners at the start of the pandemic, seven of them maintained their monthly cash payments throughout with 5 granted forbearance. Duke also provided additional capital to certain Partners in support of growth opportunities and achieved a first cash exit from one, returning more than 1.5x the capital lent. That was the good news! Four out of the five royalty partners which entered into forbearance agreements have now come out of forbearance and Duke has assumed equity positions in 3 of these of c. 30% in lieu of foregone cash revenues. The equity investments may compromise Duke’s qualification for Inheritance Tax planning purposes. You can use our AIMsearch facility here to check on this. The net debt position is currently £14.0m. Management considers that at the current share price of 27.80p Duke trades at a substantial discount to its underlying net asset value per share, which stood at approximately 30.9p per share at 31 March 2020. While the shares rose 10% on the day of the announcement the discount doesn’t look terribly substantial to us. Furthermore, it is very difficult to value its Partner assets with any confidence given the uncertain operating environment for many of them. Duke may also need to make a further significant impairment to many of these claimed royalty investments to add to the charge applied in the year ending March. It currently has significant (30%) equity stakes in numerous private companies which could be extremely difficult to realise, given the royalty lending arrangements in place with Duke i.e. Duke is now the only viable buyer of these businesses. One of its equity positions is in a well-known business called Trimite Global Coatings (Trimite Top Co), whose balance sheet at 31 March 2019 (note, well before the pandemic hit) reveals that it was effectively insolvent. Duke has £9m exposure to Trimite, equivalent to 12% of Duke’s NAV. It’s a similar situation with other partners United Glass Group and MRDB Holdings/Slake Holdings. In the case of another partner. Temarca, Duke has been forced to take ownership of its 3 river cruise vessels. It all looks very flakey to us and the reinstatement of a cash dividend is at odds with the precarious position of several of its Partners, five of whom appear to be based in Ireland. Many of these Partners need a proper equity injection of capital not another layer of high cost debt. There could be trouble brewing here!
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