Duke puts another £2.9m into media investor Step Investments

Duke Capital announced a follow-on investment of £2.9 million into its existing capital partner, Step Investments, on Monday.

The AIM-traded firm said the additional funding would allow Step to acquire existing loan notes and increase its equity shareholding in Bay Broadcasting through the buyout of certain minority investors.

It described Step Investments as a diversified group with significant interests in education, cinema advertising, outdoor digital advertising, and radio sectors across the UK and Ireland.

The firm’s portfolio included Pearl and Dean Cinemas, Pearl and Dean Ireland, Wide Eye Media, City Education & Learning Group, and Adtower Limited.

It said the investment would enable Step to boost its shareholding in Bay Broadcasting from 34% to a controlling 75% stake.

Bay Broadcasting, based in Dublin, operates three profitable and popular radio stations - Choice Broadcasting, airing as Ireland’s Classic Hits; Classic Rock Broadcasting, known as Radio Nova; and Star Broadcasting, branded Sunshine 106.8.

Radio Nova and Sunshine 106.8 are ranked as the second and third most popular radio stations in Dublin, respectively.

In addition to increasing its stake, Step would refinance Bay's loan notes on favourable terms, enhancing its security package.

The financing would elevate Duke’s total investment in Step to £11.5m, adhering to Duke's typical cost of capital, including a plus-or-minus-6% annual revenue adjustment factor for payments due.

Duke said it had supported Step for over six years with various forms of follow-on capital.

The enlarged group now operates extensively across the UK and Ireland, employing more than 400 people.

“We are pleased to continue our longstanding partnership with Step through this strategic transaction which adds additional, stable profitability to the group, and enhances Duke's senior security position,” said chief executive officer Neil Johnson.

“Since 2018, Step has continued to diversify its operations while adding profitable companies to the group, which is a typical use of proceeds for Duke's long term patient capital.”

At 1104 BST, shares in Duke Capital were up 2.04% at 34.19p.

Reporting by Josh White for Sharecast.com.