Duke Capital Limited (LON:DUKE) has reported outstanding financial results for the fiscal year ending March 31, 2024. The company’s performance has been characterised by record-breaking figures in several key areas, reflecting its resilient business model and strategic execution. According to Canaccord Genuity’s analysis, led by Portia Patel, they now forecast recurring cash revenue to grow by 12% y/y – a reduction of 8% on previous forecasts reflecting the challenging macroeconomic conditions.
Record Financial Performance
Duke Capital’s total cash revenue for FY24 reached a historic high of £30.3 million, marking a 38% year-over-year increase and exceeding Canaccord Genuity’s forecast by 8%. This impressive revenue growth is attributed to the successful and profitable exits from investments in Instor, Fairmed, and Fabrikat, which earned substantial exit premiums. Excluding these premiums and gains from equity sales, recurring cash revenue also hit a record £24.3 million, a 12% increase from the previous year .
Enhanced Free Cash Flow and Dividend Stability
The company reported free cash flow (FCF) of £17.9 million, a remarkable 40% increase year-over-year, with FCF per share rising to 4.34p from 3.21p. Duke maintained its dividend per share at 2.8p, consistent with the previous year, reflecting its commitment to returning value to shareholders. Patel wrote: We believe management are likely to maintain the dividend (2.8p/share paid quarterly), preferring to allocate capital resources to growing the investment portfolio.”
Strategic Investments and Portfolio Adjustments
During FY24, Duke made significant deployments totaling £46.6 million, including approximately £42 million in hybrid credit investments and £3.7 million in equity investments. A notable new financing agreement of £14.5 million with Integrum highlights Duke’s continued focus on strategic investments that offer strong returns .
While the company did report a small negative fair value movement of £6.9 million, this was primarily due to the planned unwinding of unrealised gains and minor write-downs in the hybrid credit investment portfolio. Despite these adjustments, the overall portfolio performance remains robust, and Duke’s approach of potentially increasing equity ownership in underperforming investments is aimed at maximizing shareholder value .
Outlook and Strategic Focus
Looking ahead, Canaccord Genuity anticipates continued positive performance for Duke Capital. The forecast for recurring cash revenue in FY25 remains strong. Patel noted, “We now forecast recurring cash revenue to grow by 12% y/y, having reduced our forecast by 8%. We do not forecast any exits which may generate premiums.”
Canaccord highlight that they understand that ongoing macro-headwinds are adversely impacting some investee companies. However they note, that “in these circumstances where appropriate, Duke may seek greater equity ownership to protect and maximise shareholder value.”
Duke Capital Limited’s FY24 results highlight its strong financial health and strategic acumen. The company’s ability to achieve record revenues and maintain stable dividends amidst economic uncertainty speaks volumes about its operational resilience and commitment to creating long-term value for its stakeholders.
