Duke Royalty Rises as Recurring Cash Revenue Growth Expected to Continue

Duke Royalty (LON: DUKE) is up almost 4% Thursday morning after the company released a trading update, providing guidance for its third financial quarter ending 31 December 2022.

The capital solutions provider told investors that based on current trading, it expects to achieve recurring cash revenue of £5.5 million in the third quarter of FY23.

The expected recurring cash revenue represents a 41% increase on the third quarter last year, which came in at £3.9 million, and a rise from the prior quarter, Q2 FY23, which saw Duke Royalty deliver record recurring cash revenue of £5.3 million.

Despite the macroeconomic challenges, the company said the current quarter is on track to maintain the revenue growth trend, which has seen the company go from £3.3 million in recurring cash revenue in Q2 FY22 to the £5.3 million reported in Q2 this year. The growth trend is supporting the company's quarterly dividend, which represents an annualised yield of over 8% at the current share price.

However, the growth in total cash revenue hasn't been as stable, dipping by £1 million from £4.9 million between Q2 FY22 and Q3 FY22 before rising to £6.7 million in Q4 FY22, then coming in at £5.1 million n Q1 FY23 and then £5.3 million in Q2 FY23.

“”In Q4 FY23, we expect to see continued new deployments, as shown by Duke's recent investment into New Path Fire & Security,” commented Neil Johnson, CEO of Duke Royalty.

“Duke will be opportunistic in taking advantage of the current market where we are seeing other lenders pulling back from making new investments. Duke's access to capital and long term, aligned investment horizon is perfectly positioned for the current challenging macro environment.”