Duke Royalty (DUKE:34.5p), 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, has delivered a bumper cash flow performance in the 2021/22 financial year, and looks well set to maintain the progress.
In the 12 months to 31 March 2022, the group made £75mn of investments, of which £61mn was in five new royalty partners. This not only diversified the portfolio to 13 royalty partners, but it boosted total cash revenue by two-thirds to £18.4mn and lifted recurring cash revenue by 69 per cent to £14.9mn, realised gains on equity investments explaining the difference between the two metrics. Moreover, Duke booked £10.8mn of unrealised gains on its portfolio, up from £3.5mn in the prior year, hence why net asset value increased by more than 50 per cent to £133mn after factoring in an oversubscribed £35mn equity raise during the financial year.
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