TIDMDUKE
RNS Number : 8510L
Duke Royalty Limited
24 April 2018
24 April 2018
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
New Royalty Agreement with a UK Based Glass Merchant and
Processor
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 entered into a royalty financing agreement
(the "Financing") of up to GBP 7.5 million (with GBP 6.5 million
drawn down immediately) with Brownhills Investments Limited
("Brownhills"), the holding company for a UK based group which
represents one of the UK's leading independent glass merchants and
processors, established in the 1970s.
Highlights
-- As Duke's fourth European Royalty Partner, this broadens its
revenue base and demonstrates its value proposition as a viable
alternative finance solution for well established, profitable
businesses in UK and Europe
-- Initial cash-on-cash yield of more than 13 per cent per annum
via monthly payments immediately post investment
-- 30 year secured financing - distributions to be adjusted
annually to reflect Brownhills' revenue growth
-- Duke closed on an initial commitment of GBP 6.5 million, with
a further option for up to GBP 1.0 million until 31 December
2019
-- Brownhills has drawn down the funds and used the proceeds to
refinance most of its outstanding debt and to complete the buyout
of the remaining 70% equity stake (from its current 30% stake) of
an operating subsidiary, Tufwell Glass ("Tufwell")
-- Immediately earnings accretive for Brownhills through the acquisition of Tufwell
-- Brownhills has 130 employees across three UK plants and
majority owned and managed by a family which has owned the group
for a number of years
Neil Johnson, CEO of Duke Royalty, said:
"We are delighted that yet another private, successful
industrial company, also based in the UK, has chosen Duke to be a
capital partner over other options. This underpins our plan to
bring an alternative finance solution, which represents a GBP50
billion sector in North America and does not carry re-financing
risk and is non-dilutive for owners, to UK and European
businesses.
"In terms of our investors, this deal once again provides access
to a well-run private company. Mark and Nick Harrison's proven
business acumen and increased equity ownership means that they are
aligned with us to deliver continued growth over the long term.
"With four royalty agreements now in place, and more in the
pipeline via our relationship with our Fortune 500 partner, Oliver
Wyman, investors stand to benefit from the robust, predictable,
long term returns and a strong associated yield, delivered by Duke
Royalty."
Mark Harrison, Group Managing Director of Brownhills, said:
"The main attraction for choosing Duke as our new financing
partner was the long term participating nature of its capital. At
Brownhills, we have a clear plan to grow both organically and via
acquisition and we are happy to have a supportive and aligned
financing partner in place for the long term."
New Royalty Partner - Brownhills Investments Limited
Duke has committed up to GBP 7.5 million to Brownhills,
providing it with the necessary funds to refinance a large portion
of its outstanding debt and to complete the buyout of the 70% of
Tufwell Glass ("Tufwell") it did not already own. This thereby
increases Brownhill's equity ownership in Tufwell from 30% to 100%.
Post investment, Brownhills will own 100% of all three of its
operating subsidiaries - Tufwell, PeterLee Glass ("PLG") and
Brownhills Glass Company ("BGC") which operate in different UK
geographical locations and focus on different end markets.
Brownhills is the holding company to these operating
subsidiaries which together represent one of the UK's leading
independent glass merchants and processors. The Group has supplied
glass to prominent projects such as the Shard skyscraper, London's
Olympic Park, the British Museum, the Bowes Museum, Sage Gateshead,
as well as Fenwicks and Selfridges department stores.
BGC, established in 1979, is based in the Midlands and serves
trade customers, architects, interior designers, construction
professionals and private home owners throughout the West Midlands
and beyond. Its products and services range from the supply of
plain glass from stock to sophisticated processing, and it holds
extensive stocks of plain glass, safety glass, fire glass and
horticultural glass, available for next day delivery using its own
fleet of vehicles.
Tufwell, established in the 1980s, is based in West Sussex and,
with its own dedicated glass tempering facility, is a specialist
glass supplier of glazed partitioning, primarily servicing the
London office market. By using state-of-the-art machinery, coupled
with a highly skilled workforce, Tufwell is able to compete in the
demanding market of London's commercial building sector. Many of
its products and services are used to supply the architectural
glazing and interiors markets, with order to delivery completed in
a short period of time.
PLG, established in 1977, is based in North East England and has
a state of the art processing facility which caters to the most
demanding commercial glass installations including oversized and/or
curved glass. Its commercial glass services include internal and
external glass doors, screens, shop fronts, glass balustrades,
glass staircases, glass entrances and other bespoke architectural
glass installations.
About the Financing
Duke has committed to providing Brownhills with up to GBP 7.5
million, with GBP 6.5m provided immediately upon closing and a
further GBP 1.0 million via an option at Duke's sole discretion
until December 31, 2019.
The terms of the Financing are in line with Duke's typical
investment criteria. The Financing is provided through a secured
loan and preference shares and Duke will be entitled to monthly
distributions (the "Distribution") beginning in May 2018. On an
annual basis, based on the GBP 6.5 million initial investment
amount, the Year 1 annual distribution is expected to total
approximately GBP 0.88 million, equating to a cash-on-cash yield of
over 13 per cent.
In line with Duke's other investments and reflective of the
participating nature of the Duke investment, the Distribution will
be adjusted annually with the first adjustment occurring in April
2019 based on the percentage change in Brownhill's gross revenues
for the year to 30 November 2018 compared with the prior financial
year. The annual adjustment in the Distribution will be subject to
a collar.
The Financing is for a period of 30 years, with the Distribution
payable to Duke throughout the duration of this term, unless
Brownhills utilises an early buyback option.
Duke Royalty Portfolio
Following the completion of the Brownhill Financing, the
Company's portfolio of royalty investments is as follows with
approximately GBP 30 million of capital deployed to date:
Royalty Partner Royalty Investment Date of Royalty Agreement
Amount
Temarca B.V Euro 8,000,000 April 2017
------------------- --------------------------
Lynx Equity (UK) Limited GBP 7,000,000 October 2017
------------------- --------------------------
Trimite Global Coatings GBP 9,000,000 March 2018
Limited
------------------- --------------------------
Brownhills Investments GBP 6,500,000 April 2018
Limited
------------------- --------------------------
***S***
For further information, please contact www.dukeroyalty.com, or
contact:
+44 (0) 1481 741
Duke Royalty Limited Neil Johnson/ Charlie Cannon-Brookes 240
Grant Thornton UK
LLP Colin Aaronson/ Samantha +44 (0) 20 7383
(Nominated Adviser) Harrison 5100
-------------------------------------- ---------------------------
Cenkos Securities
plc +44 (0) 207 397
(Joint Broker) Julian Morse/ Michael Johnson 8900
-------------------------------------- ---------------------------
Mirabaud Securities
Limited +44 (0) 20 3167
(Joint Broker) Peter Krens/ Edward Haig-Thomas 7222
-------------------------------------- ---------------------------
Redleaf Communications Elisabeth Cowell/ Robin +44 (0) 20 3757
(PR) Tozer/ Ian Silvera 6880
Dukeroyalty@redleafpr.com
-------------------------------------- ---------------------------
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 and exclusive
partnership 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 Brownhills
Brownhills Investments Limited is the holding company to its
three operating subsidiaries - Tufwell, PLG and BGC and as a group
is one of the UK's leading independent glass merchants and
processors.
For further information, please see the websites for the
group:
www.tufwellglass.co.uk
www.peterleeglass.com
www.brownhillsglass.com
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGRLFFLISIIVFIT
(END) Dow Jones Newswires
April 24, 2018 02:00 ET (06:00 GMT)
Duke Capital (LSE:DUKE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Duke Capital (LSE:DUKE)
Historical Stock Chart
From Apr 2023 to Apr 2024
