These are notes taken during a Q&A session with Neil Johnson, CEO of Duke Royalty (DUKE), which was attended by Graham Neary and a Cube.Investments member.
Duke Royalty, a company that makes its money by providing capital to companies in exchange for rights to a small percentage of their future revenues over a typical term of 25-40 years, has made two smart announcements in the past few weeks.
Duke Royalty, a UK-quoted royalty financing company, is set to increase its portfolio in Ireland following the acquisition of British financier Capital Step in February.
Duke Royalty may operate in an area of finance that is under the radar, but it’s a company well worth getting acquainted with given that the directors have made smart progress investing the £79m proceeds from three equity raises (placings at 40p to 44p) to create a portfolio of sound royalty partners since listing its shares on London’s junior market in March 2017.
Downing bought a position in Duke Royalty (DUKE) in 2018. James elicits the key investment attractions of DUKE, and Neil gives a great overview of DUKE, royalty finance, the market place, risk management and much more, to answer all the questions investors may have.
For this podcast, Graham was pleased to be joined by Neil Johnson, Executive Director and CEO of Duke Royalty (DUKE) (latest share price 41.4p, market cap £83 million).
The European royalty financing market is starting to gain traction and this firm has spotted the opportunity to replicate a business model that has a proven track record in North America (where the market for royalty financing is worth £50bn).
The odds are that if you live in the UK and rest of Europe you have never heard of royalty finance. However, more than a decade after the 2008 financial crisis and on the back of a recent sell-off in global equity markets, the word around royalty financing is inevitably spreading rapidly.
Despite all the uncertainty created by Brexit the latest reading from the Quoted Companies Alliance/YouGov Small & Mid-Cap Sentiment index suggests most small and medium-sized companies in the UK are optimistic about 2019.