money-2724241

Duke Royalty

LN: DUKE

£90.8m market cap

43.7p last close

Duke Royalty is a financial services company providing royalty-based finance to small and growing businesses in selected sectors and with specific criteria. The royalty payments are either for a fixed term (typically 30 years) or perpetual.

Investment summary

Royalty investing is a profitable and significant form of alternative finance in North America. However, it is still a nascent industry in Europe and Duke Royalty was set up in 2015 by an experienced team to change this. Its current portfolio is now close to £80m and it aims to add £45–100m in deals a year in the coming years. Duke has just announced a fund-raising of up to £20m, of which £16.1m has already been placed in an institutional offering at 44p per share. This will allow it to invest another £45m in the next 12 months. We estimate a sustainable ROE of 14% for Duke and we see the current fair value range at 50–58p per share.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 1.8 N/A 0.2 0.4 109.3 172.1
2019A 6.1 N/A 3.1 1.8 24.3 21.3
2020E 12.1 N/A 6.2 2.8 15.6 12.6
2021E 18.7 N/A 10.2 3.7 11.8 9.2
Last updated on 21/10/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.8) (3.7) 1.2
Relative* (8.1) (0.5) (1.3)
52-week high/low 48.8p/40.0p
*% relative to local index
Key management
Neil Johnson CEO
Charlie Cannon-Brookes Director