Trading and Operational Update

Duke Capital Limited

28 March 2024

 

28 March 2024

Duke Capital Limited

("Duke Capital", "Duke" or the "Company")

Trading and Operational Update

Duke Capital Limited (AIM: DUKE), a leading provider of hybrid capital solutions for SME business owners in Europe and North America, is pleased to provide the following trading update for its third quarter of the financial year ending 31 December 2023 ("Q3 FY24"), and to provide guidance on trading for its fourth quarter ending 31 March 2024 ("Q4 FY24").

Q3 FY24 Trading Update

·        Recurring revenue for Q3 FY24 reached a record of £6.3 million, an increase of 12% over Q3 FY23. Total cash revenue was also £6.3 million.

·        Q3 FY24 represents over three continuous years of increasing quarterly recurring cash revenue, with total growth of 350% from the £1.8 million in the quarter ending September 2020 to £6.3 million for the last quarter ending December 2023.

Q4 FY24 Trading Guidance

·        Duke forecasts total cash revenue of £10.2 million in Q4 FY24, a record quarter marking the first time Duke has generated more than £10 million in a single quarter. This represents a material 30% increase over the Company's previous record of £7.8 million which was achieved in Q1 FY24.

·        During the quarter, Duke delivered two material and profitable buyouts, that have returned over £19 million which the Company will use for near-term deployments in new and existing partners.

·        Duke expects to achieve recurring cash revenue of £5.8 million in Q4 FY24, a small decrease versus the previous quarter. While the recent buyouts have resulted in increased total cash revenue, until this capital is redeployed, there is a temporary impact of reduced recurring cash revenue. 

Overview of quarterly revenue growth:

	Recurring Cash Revenue*	Total Cash Revenue**
Q3 FY23	£5.6 million	£5.6 million
Q4 FY23	£5.7 million	£5.8 million
Q1 FY24	£6.0 million	£7.8 million
Q2 FY24	£6.2 million	£6.2 million
Q3 FY24	£6.3 million	£6.3 million

* Recurring cash revenue excludes exit premium receipts and cash gains from equity sales

** Total cash revenue is monthly cash distributions from Duke's partners plus cash gains received from the sales of equity assets and exit premiums

Operational Update

·        In February, Duke completed a £2.9 million secondary share purchase from existing shareholders in United Glass Group, increasing its equity stake from 30% to 74%, in line with Duke Capital's vision to deepen its engagement with its high performing partners.

·        In March, Duke delivered two highly profitable exits from Fabrikat and Fairmed Healthcare, which has significantly bolstered Duke's liquidity which currently stands at approximately £44 million.

·        The Company has a strong pipeline of both new and follow-on opportunities for capital partners to deploy additional liquidity.

·        During the quarter, Duke also completed its change of name and renewed messaging. The review has focused on ensuring that Duke's unique offering is communicated to business owners and stakeholders in a way which provides greater clarity and improves comparison when evaluating a broad array of financing options.

Neil Johnson, CEO of Duke Capital, said:

"We are delighted to show a record quarter of total cash revenue following the successful exits of two of our investments. Fabrikat particularly highlighted the value of Duke's capital, having financed an MBO by three executives in 2021, facilitating an exit three years later at a 36% IRR. We look forward to redeploying the capital from these exits into our pipeline of immediate and longer-term opportunities, driving a return in the short-term to delivering record quarterly recurring cash revenues.

Following the completion of our name change and corporate re-branding, Duke Capital is looking forward to FY25 with renewed optimism. With a strengthened liquidity position and strong pipeline, we are well-equipped to navigate the challenges and opportunities that lie ahead, while remaining cautious of the economic backdrop."

***ENDS***

For further information, please visit https://dukecapital.com/ or contact:

Duke Capital Limited	Neil Johnson / Charles Cannon Brookes / Hugo Evans	[phone]
Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker)	Stephen Keys / Callum Davidson / Michael Johnson	[phone]
Canaccord Genuity Limited (Joint Broker)	Adam James / Harry Rees	[phone]
SEC Newgate (Financial Communications)	Elisabeth Cowell / Alice Cho / Matthew Elliott	+ [phone] [e-mail]

About Duke Capital

Duke is a leading provider of hybrid capital solutions for SME business owners in Europe and North America, combining the best features of both equity and debt.

Since 2017, Duke has provided unique long-term financing which eliminates re-financing risk and necessity for a short-term exit by providing a unique 'corporate mortgage' while also aligning its returns to grow with the success of the business.

Duke is focused on generating attractive risk-adjusted returns for shareholders and has a track record of achieving this across market cycles. It's three investment pillars are capital preservation, attractive dividend yield, and to provide upside upon exits.

Duke is listed on the AIM market under the ticker DUKE and is headquartered in Guernsey.

 

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