Duke Royalty posts strong quarter, makes follow-on investment

Duke Royalty reported a strong set of third-quarter results on Friday, as well as a follow-on investment in its existing royalty partner, Creō-Tech Industrial Group.

The AIM-traded company said it anticipated achieving recurring cash revenue of £6.3m in the period, signifying a noteworthy 12% increase compared to the prior year's £5.6m.

It also showed growth compared to the second quarter, which saw Duke Royalty deliver record recurring cash revenue of £6.2m.

In December, Duke further solidified its partnership with Creō-Tech by investing an additional CAD 8.6m (£5.1m), resulting in a total exposure of CAD 27.1m/

The investment was earmarked to facilitate the refinancing of Creō-Tech's existing senior lender.

During the quarter, Duke also expanded its investment team by welcoming two new associate hires.

The board said the move positioned the company to seize opportunities in the current market environment.

Additionally, Duke Royalty embarked on a comprehensive review of its branding and positioning during the quarter.

Although the review was still in progress, the board said it expected to share changes on its completion in the next quarter.

“We are pleased to report that despite the ongoing macroeconomic uncertainties, we continue to deliver revenue growth, with the third quarter FY24 on course to maintain this upward trend, underpinning our stable dividend which at the current share price, represents an approximate 9% yield,” said chief executive officer Neil Johnson.

“We believe the company's rebrand, alongside our expanded investment team, will position Duke to take advantage of the abundance of new opportunities in the private credit market, which has become increasingly mainstream in the SME lending space.”

Reporting by Josh White for Sharecast.com.