17 December 2018
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
GBP 1.0 million follow-on contribution to existing royalty partner Brownhills Glass Co Limited ("Brownhills")
Duke Royalty Limited (AIM: DUKE), a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, is pleased to announce a further contribution of GBP 1.0 million into its royalty partner Brownhills. Brownhills is one of three subsidiary companies of United Glass Group Limited (formerly Brownhills Investments Limited) (the "Group"), a UK based group which represents one of the UK's leading independent glass merchants and processors and was established in the 1970s.
As previously announced on 24 April 2018, Duke originally invested GBP 6.5 million into the Group with an option to increase (at Duke's sole option) its investment by a further GBP 1.0 million at any time prior to 31 December 2019. In this regard, Duke is pleased to announce that, in support of Brownhills' growth plans, it has now decided to exercise its right and invest the additional GBP 1.0 million with this additional investment being made on the same initial cash-on-cash yield of more than 13% and the same duration of 30 years. Post this additional investment, Duke's aggregate exposure to Brownhills has increased to GBP 7.5 million.
Duke is also pleased to report that the first adjustment factor period for Brownhills on the initial GBP 6.5 million investment ended on 30 November 2018 and that the turnover growth for the consolidated Brownhills group year-on-year exceeded the maximum possible adjustment factor of +6%. As such, the payments due to Duke will increase from April 2019 on a cash basis by 6%. Following this positive adjustment on the original GBP 6.5 million, as well as the initial cash-on-cash yield on new GBP 1.0 million investment, Brownhill's increased payments to Duke will now total approximately GBP 1.06 million per annum (starting April 2019).
Use of proceeds for the additional GBP 1.0 million investment includes acquiring the freehold property from which one of Brownhill's key operating subsidiaries operates as well as buying additional toughening and processing equipment to enable Brownhills to satisfy the high level of demand that it is currently experiencing throughout the group.
Neil Johnson, CEO of Duke Royalty, said:
"We are very pleased to make this additional investment into our existing partner Brownhills. Brownhills has experienced strong year on year turnover growth which has resulted in Duke benefitting from its third consecutive maximum adjustment factor reset. Given that this additional investment is primarily being used to fund growth initiatives within Brownhills we are hopeful that this turnover growth will be continued into the future."
For further information, please contact www.dukeroyalty.com, or contact:
Duke Royalty Limited
Neil Johnson/ Charlie Cannon-Brookes
+44 (0) 1481 741 240
Grant Thornton UK LLP
Colin Aaronson/ Samantha
+44 (0) 20 7383 5100
Cenkos Securities plc
Julian Morse/ Michael Johnson
+44 (0) 207 397 8900
Mirabaud Securities Limited
Peter Krens/ Edward Haig-Thomas
+44 (0) 20 3167 7222
Elisabeth Cowell/ Ian Silvera / Tom Carnegie
+44 (0) 20 3757 6880
About Duke Royalty
Duke Royalty Limited provides alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad. Duke Royalty's experienced team provide financing solutions to private companies that are in need of capital but whose owners wish to maintain equity control of their business. Duke Royalty's royalty investments are intended to provide robust, stable, long term returns to its shareholders. Duke Royalty is listed on the AIM market under the ticker DUKE and is headquartered in Guernsey.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Brownhills is one of three operating subsidiaries of holding company United Glass Group ltd, formerly Brownhills Investment Ltd.
The other two subsidiaries are Tufwell and Peterlee Glass. As a group it is one of the UK's leading independent glass merchants and processors.
For further information, please see the websites for the group:
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