Source - LSE Regulatory
RNS Number : 4118Q
Duke Royalty Limited
19 February 2019


19 February 2019

Duke Royalty Limited

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


New Royalty Agreement with a Leading UK RV Parts Wholesale Business


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 that it has provided a GBP10 million royalty financing (the "Financing") into the MRDB Holdings Limited Group, which undertakes business as Miriad Products ("Miriad"). Formed in 1977, Miriad is the largest privately-owned recreational vehicle ("RV") parts wholesale company in the UK.



·     Represents Duke's twelfth royalty partner, further diversifying Duke's revenue base

·   Initial cash-on-cash yield of more than 13 per cent. per annum via monthly payments, immediately payable post the closing of the investment

·     30-year secured financing - distributions to be adjusted annually to reflect Miriad's consolidated revenue growth

·    Miriad has very low customer concentration risk and a long history of turnover growth and profitability, providing over 15,000 parts from a variety of suppliers, many of which are on a UK-exclusive basis

·     Miriad is led by four owner - managers who have successfully grown sales since their Management Buy Out ("MBO") from GBP900,000 in 1999 to GBP23 million in 2018

·    Alongside Duke's Financing, two new directors are being appointed who will provide strategic and M&A advice to Miriad as well as also becoming shareholders.  Duke's financing structure also provides the shareholder group with the flexibility to incentivise other members of the wider management team in due course 

·   Duke still retains sufficient liquidity via its existing cash holdings and debt facility to make additional royalty investments


Neil Johnson, CEO of Duke Royalty, said:

"Miriad is a very well-managed business and a market leader in its sector, making it an ideal royalty partner for Duke. The business' long history of growing profitability and its ability to withstand, and in fact grow during previous economic downturns, makes us excited about the Company's future.


"As the Company's twelfth core holding, this deal builds on the diversification we have recently achieved through the acquisition of Capital Step. Importantly, Duke's existing cash holdings and acquired debt facility mean that we are well positioned to make more investments in the coming months. 


"Duke's pipeline remains strong and I look forward to updating shareholders on new investments in due course."


Michael Ham, Group Managing Director of Miriad, said:

"Duke's capital was a perfect fit for our objectives. Being owners for 20 years, the nature and flexibility of Duke's capital means we can continue to be involved in the future of the business, while receiving value for what we have built to date.  Duke provides us with a key stepping stone in our long-term succession planning, and enables us to offer the right sort of incentivisation to attract new members to our shareholder team.


"Our enhanced ownership team can now concentrate on implementing its ambitious business plan, with Duke Royalty as our long-term funding partner."


New Royalty Partner - MRDB Holdings Limited Group (the "Group", doing business as Miriad Products "Miriad")

Miriad has more than 40 years of trading history and is the largest privately-owned recreational vehicle (RV) parts wholesale company in the UK.  Headquartered in Foston, Derbyshire, the Company has developed a strong reputation for its large range of quality products, industry knowledge and customer-focus. It has exclusive supplier contracts and long-standing relationships with key brands in the industry, and is seen as a reliable and valued partner which has supported the growth of its customers.


With the UK being one of the fastest growing European RV markets for caravans and motor-vehicles, Miriad is well-positioned to take advantage of this. It currently supplies over 15,000 individual products and accessories in the motorhome, caravan, and converter market to approximately 1,700 end business customers and operates out of a 35,000 sq ft facility.  


Miriad operates a business-to-business model which services customers through two distinct sales divisions. The first sales division supplies parts to the OEM market (Original Equipment Manufacturer) and targets motorhome manufacturers, van converters, caravan manufacturers as well as manufacturers of other specialised vehicles such as horseboxes and trailers.  The second division supplies parts to the retail market and targets motorhome and caravan dealerships in the secondary aftermarket. 


The company's owner-Directors are all long-serving employees with a combined total of more than 80 years' experience with the company. For the 12 months ended 31 December 2017, the Group generated audited sales and profit before tax of approximately GBP21.2 million and GBP0.9 million respectively.  Upon completion of the Financing and transaction, the Group's underlying profitability is consistent with Duke's covenant requirements on a trailing and forecasted basis.


About the Financing

Duke has committed GBP10 million of its capital in a transaction which enables the existing owners to partially realise their investment in Miriad, and to underpin the exciting growth plans that the team has identified.  As importantly, Duke's capital is a key part in enabling equity to become available to attract more depth to the Board and, in time, to incentivise a strong second tier team to continue to grow the business and be properly rewarded for it.  Critically, there is no change to the day to day operations of Miriad at all, and Mike and his team continue to run and grow the business as they have successfully done over the last 20 years.


The terms of the Financing are in line with Duke's typical investment criteria. The Financing is provided through a combination of a secured loan and preference shares and Duke will be entitled to monthly distributions (the "Distribution") beginning in March 2019.


In line with Duke's other investments and reflective of the participating nature of the Duke investment, the Distribution will be adjusted annually based on the percentage change in total combined gross revenues of the Group for the 12 months to 31 December 2019 compared to the prior financial (calendar) year with the first adjustment occurring from February 2020. The annual adjustment in the Distribution will be subject to an agreed collar.


The Financing is for a period of 30 years, with the Distribution payable to Duke throughout the duration of this term, unless Miriad utilises an early buyback option which will trigger an early redemption payment to Duke.  In addition, Duke has received 12% of the fully diluted ordinary equity of the Group as part of its investment.


Duke Royalty Portfolio

Following the completion of the Miriad financing and the recently announced Capital Step acquisition, the Company's portfolio of core royalty investments is as follows with approximately GBP51 million and €22.075 million (totalling approximately GBP70.4 million) of capital deployed to date.  Company names of all Royalty Partners are now included for reference:


Royalty Partner    

Total Investment Amount

Date of Initial Investment

Temarca B.V       

Euro 9,000,000

April 2017

Berkley Recruitment (Group) Limited

Euro 1,300,000

June 2017

Welltel (Ireland) Limited

Euro 5,300,000

June 2017

Lynx Equity (UK) Limited

GBP 10,000,000

October 2017

Xtremepush Limited

GBP 2,000,000

February 2018

Trimite Global Coatings Limited

GBP 9,000,000

March 2018

Brownhills Investments Limited

GBP 7,500,000

April 2018

Pearl & Dean Cinemas Limited / Wide Eye Media

GBP 2,500,000

June 2018

BHPC Limited

Euro 4,600,000

August 2018

InterHealth Canada

GBP 10,000,000

August 2018

Brightwater Selection (Ireland) Limited

Euro 1,875,000

September 2018

MRDB Holdings Limited Group

GBP 10,000,000

February 2019





For further information, please contact, or contact:


Duke Royalty Limited

Neil Johnson / Charlie Cannon-Brookes


+44 (0) 1481 741 240

Grant Thornton UK LLP 

(Nominated Adviser)

Colin Aaronson / Samantha

Harrison/Seamus Fricker 


+44 (0) 20 7383 5100


Cenkos Securities plc 

(Joint Broker)


Julian Morse / Michael Johnson

+44 (0) 207 397 8900

Mirabaud Securities Limited

(Joint Broker)


Peter Krens / Edward Haig-Thomas


+44 (0) 20 3167 7222

Newgate Communications



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.


About the MRDB Holdings Limited Group ("Miriad")


Miriad was formed in 1977 and is the largest privately owned recreational vehicle (RV) parts wholesale company in the UK. It has a 40 year operating history and supplies over 15,000 individual products and accessories in the motorhome, caravan, and converter market to approximately 1,700 end business customers. Miriad exclusively sells its products inside the UK.


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.




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