Duke Capital (DUKE) H2 2025 earnings summary

Executive summary

• Fiscal 2025 delivered record recurring cash revenue, rising 6% year-over-year to £25.8m, despite no portfolio exits during the year.

• Dividend of 2.8p per share was fully covered by free cash flow, maintaining a 9.7% yield.

• Strategy focused on supporting existing partners, increasing equity stakes in 6 partners during FY25 and two more post-year-end, and cautious new deployments.

• Oversubscribed equity raise of £23.5m in November 2024 provided additional capital for portfolio reinvestment and growth.

• Portfolio diversified across 14 capital partners and 75 underlying operating companies, with expansion and further investments post-period.

Financial highlights

• Recurring cash revenue reached a record £25.8m, up 6% year-over-year, underpinning dividend payments.

• Total cash revenue declined 12% to £26.6m, and free cash flow dropped 42% to £12.6m due to absence of exits.

• Non-recurring cash revenue fell 86% compared to the prior year, reflecting no full exits.

• Adjusted earnings per share fell 23% to 3.48p; dividend per share maintained at 2.8p.

• Operating expenses rose slightly to £3.1m, with OpEx as a percentage of recurring revenue at 11%.

Outlook and guidance

• Cautiously optimistic outlook with expectations of future exits, continued dividend coverage, and improving economic stability.

• Lower interest rates anticipated to benefit free cash flow and compress dividend yield spreads.

• Focus remains on building equity stakes, recycling capital from future exits, and enhancing NAV per share.

• Third-party capital initiatives underway to reduce reliance on equity raises and finance new partners.