Companies on the rebound

Duke Royalty (DUKE:23p), an Aim-traded 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 issued results for the 12 months to 31 March 2020. They reveal the short-term financial hit from the Covid-19 pandemic on the portfolio, and the opportunity, too.

Royalty Finance provides the key to becoming the master of your own business destiny

The global pandemic has dealt yet another blow to business in general, and Small and Medium Enterprises (SMEs) in particular.

Even at the beginning of the year, the level of indebtedness across this community was untenable. To make matters worse, recent research has highlighted that a quarter of a million companies are at risk of collapsing under £35bn ($44bn) of unsustainable debt taken on during the COVID-19 pandemic. This is foreboding, to say the least.

Duke Royalty plans paper dividend

Duke Royalty plans paper dividend – Duke Royalty has been reviewing the situation with its business in light of COVID-19. It says “Through its diversified portfolio, Duke naturally has exposure to a range of sectors, some of which are impacted to a greater extent by Covid than others, such as hospitality & leisure. In certain situations where Covid-19 has had the greatest impact, Duke has elected to either accrue, capitalise or equitise its monthly cash payments in the short term with the intention of alleviating the negative cashflow impacts for its royalty partners during this time of unprecedented financial stress.”

Investor’s Chronicle – Hunting down undervalued small-cap buys

Duke Royalty, an Aim-traded 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, is being priced a hefty 38 per cent below proforma book value of £90.3m (37.7p a share) after factoring in last October’s £17.45m equity raise, at 44p a share. It’s a value opportunity worth exploiting.