Follow-on investment into existing royalty partner

22 December 2020

Duke Royalty Limited

("Duke Royalty", "Duke")

Follow-on investment into existing royalty partner

Duke Royalty Limited (AIM: DUKE), a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, is pleased to announce a follow-on investment of £3.1 million into its existing royalty partner MRDB Holdings Limited Group, which undertakes business as Miriad Products ("Miriad", or the "Company"). Miriad, formed in 1977, is the largest privately-owned recreational vehicle ("RV") parts wholesale company in the UK.

Highlights:

·     The funds will enable Miriad to buyout and cancel all of the Company's subordinated vendor loan notes ("VLN"s) at a material discount to their current face value plus accrued interest, which stood at £4.9 million.

·     The VLNs were due to begin amortising in 2021 and carried a 15% compound interest rate, therefore an upsize of Duke's long dated and low amortisation product will be accretive and beneficial to Miriad both from an interest and capital repayment perspective.

·     As part of the deal, Duke will also increase its equity interest in Miriad to 30%, pre any dilution from the Company's share option scheme.

·     As the UK's leading RV and caravan parts distributor, Miriad has benefitted from the changing behaviour of UK consumers who have, in increasing numbers, decided or been required to stay in the UK for their holidays. After an initial drop in business volumes in April and May, both revenue and EBITDA have recovered strongly since June.

·     Duke's monthly royalty payments have been unaffected during FY2021 and Miriad's underlying liquidity position remains strong.

·     Duke's original investment into Miriad in April 2019 totalled £10 million. This investment increases Duke's invested capital to £13.1 million, making Miriad one of Duke's largest investments. Monthly payments starting in January 2021 will total approximately £147,000.

Neil Johnson, CEO of Duke Royalty, said:

"We are delighted to be making this follow-on investment into Miriad, as the Company's preferred long-term capital partner. Using Duke's capital to refinance this subordinated debt prior to its amortising start date will allow Miriad's executive team to focus on growing the Company rather than the distraction of the 'refinancing treadmill'. Duke's ability to support the Company at this time was welcomed as management did not want the uncertainty that may arise by seeking financing during a pandemic. Miriad's business continues to expand and it has been one of the beneficiaries of the Covid-19 pandemic as UK residents make the decision to holiday at home rather than travel abroad. We look to the future with Miriad with confidence."

Penny Whitelock, CEO of Miriad, said:

"By upsizing our current facility with Duke, we have been able to remove any long-term uncertainty associated with paying down the VLNs. This also allows our management team a greater degree of control over the Company and further enhances the relationship with Duke as our preferred long-term financing partner."

***ENDS***

For further information, please visit www.dukeroyalty.com or contact:

About Duke Royalty

Duke Royalty Limited provides alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad. Duke Royalty's experienced team provide financing solutions to private companies that are in need of capital but whose owners wish to maintain equity control of their business. Duke Royalty's royalty investments are intended to provide robust, stable, long term returns to its shareholders. Duke Royalty is listed on the AIM market under the ticker DUKE and is headquartered in Guernsey.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon publication of this announcement, this inside information is now considered to be in the public domain.