Duke Royalty shares rise after extra Welltel investment
By Sean Farrell
Date: Monday 10 Aug 2020
(Sharecast News) - Duke Royalty shares rose after the provider of business capital said it made a further £3m investment in Irish telecoms company Welltel.
The capital injection takes Duke's total investment in Dublin-based Welltel to £13.5m and means Duke will receive about £1.8m a year from Welltel starting in August 2020. The distribution represents a 13.2% cash yield on Duke's proforma invested capital.
Welltel will use the money to buy Intellicom Ireland, the fifth acquisition financed by Duke as Welltel consolidates the Irish business telecoms sector. Duke shares rose 11% to 29.42p at 12:47 BST.
AIM-listed Duke provides capital to companies in exchange for a percentage of revenue over about 30 years. The arrangement allows enterprises to grow without handing over equity. The business is unusual in the UK but there are many similar operators in North America.
Neil Johnson, Duke's chief executive, said: "We are proud to be supporting Welltel once again with our flexible, long-term offering, as it continues to execute on its growth strategy by successfully combining organic growth with strategic M&A.
"Welltel is a clear example of one of our partners which is benefitting in the current climate and we are pleased to be able to back them."
Duke reported a strong pickup in trading on 6 August for the companies it backs. The company said it had supported businesses with short-term problems during the Covid-19 crisis and was standing behind those that were doing well.
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