1 November 2019 – follow-on contribution

A follow-on investment of £2m into existing royalty partner Lynx Equity (UK) Ltd has been announced.  Lynx UK will allocate Duke’s further contribution towards the acquisition of Danish manufacturer, Sundby Trapper, which was undertaken in May 2019.  This follow-on investment diversifies both Duke’s portfolio and Lynx UK’s revenue base.  Based on the increased investment and enhanced exposure of £12m in Lynx UK, Duke  will be entitled to higher distributions of £1.6m per annum from Lynx UK from November 2019.  This represents a pro forma cash yield of 13.0% on total invested capital.  This follow-on transaction will also increase the security of Duke’s investment and all other terms of the £2m contribution are the same as Duke’s previous investment made into Lynx UK.  Sundby Trapper, founded in 1964, is a manufacturer of specialised steel staircases and related products in Denmark and throughout the Nordic region.  It has a strong market presence and a solid growth opportunity servicing residential, commercial and institutional markets. It has won bids for prestigious projects including The National Gallery of Denmark and the Norwegian Royal Palace.  The previously announced issue of £17.5m of equity at 44p per share has also been completed, with significant director participation.  We keep our BUY rating.