Thursday’s News; Sylvania platinum ex dividend and thoughts on Duke Royalty open offer

Sylvania Platinum ex-dividend 0.78p per share
(£244 of income to JIC Portfolio)


Thoughts on Duke Royalty open offer
Duke Royalty (DUKE.L, Market Cap £95m, 44p, 4.3% of JIC Portfolio and 9.0% of JIC Top 10)Open offer of two new shares for every 52 held.

As part of its fundraising of £20m, (it has already received confirmed subscriptions from new and existing shareholders for £1.65m) it is offering all shareholders the opportunity to but two news shares for every 51 currently held. The price to be paid is 44p per share.

My account is with Hargreaves Lansdown and they have set a deadline of midday on 25th October for instructions.

My intention is to take up my allocation, which for the JIC Portfolio is 1,686 shares. As I rate the stock Medium Risk/High Return, which for me, points to a target weight of 5.0%, I intend to apply for additional shares through the ‚Äúexcess offer facility‚ÄĚ to get me to 5.0%. As things stand today, that would require an extra 6350 shares.

I will not submit my order until we are closer to the Hargreaves deadline, i.e. the morning of the 25th October. A lot can happen in a week and there would be little point in me paying 44p per share if I could buy them cheaper in the market.

I reprint my conclusion of 5th October:

I think it good news that it is raising more equity capital and that it has the backing of new and existing shareholders. It’s important that it has a healthy mix of equity and debt funding i.e. not too much debt! The shares are on a prospective dividend yield of 6.9%. With each new royalty deal, there is potential for the dividend to be increased, given its policy of paying royalty cash flow as dividends. With each new deal, I think the quality of the business improves through diversification across industries and countries.  I have it as Medium Risk/High Return which I am happy with. That suggests for me a target weighting of 5.0%. I am currently at 4.6%. Happy Holder!

Screenshot 2019-10-17 at 07.50.55