Vox Royalty (TSX:VOXR) Leveraging Royalty Revenues & Returns and Database Assets for Creative Growth
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9 ماه پیش
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Interview with Kyle Floyd, CEO
Interview with Kyle Floyd, CEO of Vox Royalty Corp.
Our previous interview: https://www.cruxinvestor.com/posts/vo...
Recording date: 9th November 2023
Vox Royalty Delivers Strong Results, Makes Compelling Case for Royalty Investing
Vox Royalty recently announced impressive third quarter results, including 50% year-over-year revenue growth and record gross profit margins. In an interview, Vox CEO Kyle Floyd touted these metrics as validation of the company's returns-focused business model. He also discussed the benefits of royalty investing, arguing the asset class can provide leverage to rising commodity prices while insulating investors from inflationary pressures impacting producers.
Quarterly Results Showcase Vox's Execution
Vox's Q3 revenue of $9 million represented a 50% increase versus the prior year's $6 million. Gross profit margins hit a record high, which Floyd called "a really significant metric in the mining royalty space." The company also generated positive earnings during the quarter. Floyd cited these results as evidence that Vox is delivering returns to shareholders as promised, despite turbulent market conditions.
The company's revenue growth has been driven primarily by assets organically ramping up production or expanding output. Vox has not had to deploy significant new capital to achieve this growth. With its portfolio of producing assets, the company expects continued organic growth in 2023 as expansions come online and new royalty interests begin producing.
Disciplined Capital Allocation Targeting High Returns
Floyd emphasized Vox's discipline in deploying capital to assets likely to generate returns exceeding its cost of capital. Over the past year, Vox has invested around $15 million acquiring new royalties, already yielding approximately $10 million in top-line revenue - about a 20% cash return on invested capital.
For 2022, Vox expects around $11-13 million in revenue on its royalty portfolio, representing a 25% cash return. Beyond its operating cash flow, Vox is focused on extracting additional value from non-core assets like its coal royalty database. Although not a current area of focus, the database sale provided an immediate return while retaining upside through future revenue sharing.
Inflation Protection and Leverage for Rising Commodities
Floyd made a compelling case for royalty companies benefiting from inflationary conditions as commodity prices rise. With producers facing persistently high input costs, royalties avoid much of this risk while providing leveraged exposure to underlying metals and minerals. Vox's existing portfolio has embedded growth as assets hit key development milestones. Once acquired, royalty interests require no additional capital expenditure.
Floyd expects tailwinds for commodity prices to persist over the medium to long term. Royalty companies with high-quality assets like Vox are best positioned to capitalize on this trend. He also highlighted Vox's industry-leading dividend yield as providing investors near-term returns alongside anticipated growth.
With its revenue growth, Vox has operating leverage and cash flow to keep acquiring royalties without accessing capital markets. Floyd indicated the company is well-positioned to add further value for shareholders through acquisitions. Vox also has over $8 million in cash to fund additional deals.
Key Takeaways for Investors
Vox Royalty has a portfolio of producing assets generating impressive returns on invested capital, validating its business model.
Disciplined capital allocation focused on high-return royalty deals provides potential upside with downside protection.
As a royalty company, Vox offers leverage to rising commodity prices without direct exposure to producer input cost inflation.
With a growing revenue base and cash balance, Vox is positioned for further accretive portfolio growth ahead.
The company's attractive dividend offers investors near-term returns with anticipated growth from development of existing royalty interests.
For investors seeking commodity exposure with inflation protection, Vox Royalty warrants consideration given its strong execution and potential to build significant value in its royalty portfolio.
View Vox Royalty's company profile: https://www.cruxinvestor.com/companie...
Sign up for Crux Investor: https://cruxinvestor.com
Our previous interview: https://www.cruxinvestor.com/posts/vo...
Recording date: 9th November 2023
Vox Royalty Delivers Strong Results, Makes Compelling Case for Royalty Investing
Vox Royalty recently announced impressive third quarter results, including 50% year-over-year revenue growth and record gross profit margins. In an interview, Vox CEO Kyle Floyd touted these metrics as validation of the company's returns-focused business model. He also discussed the benefits of royalty investing, arguing the asset class can provide leverage to rising commodity prices while insulating investors from inflationary pressures impacting producers.
Quarterly Results Showcase Vox's Execution
Vox's Q3 revenue of $9 million represented a 50% increase versus the prior year's $6 million. Gross profit margins hit a record high, which Floyd called "a really significant metric in the mining royalty space." The company also generated positive earnings during the quarter. Floyd cited these results as evidence that Vox is delivering returns to shareholders as promised, despite turbulent market conditions.
The company's revenue growth has been driven primarily by assets organically ramping up production or expanding output. Vox has not had to deploy significant new capital to achieve this growth. With its portfolio of producing assets, the company expects continued organic growth in 2023 as expansions come online and new royalty interests begin producing.
Disciplined Capital Allocation Targeting High Returns
Floyd emphasized Vox's discipline in deploying capital to assets likely to generate returns exceeding its cost of capital. Over the past year, Vox has invested around $15 million acquiring new royalties, already yielding approximately $10 million in top-line revenue - about a 20% cash return on invested capital.
For 2022, Vox expects around $11-13 million in revenue on its royalty portfolio, representing a 25% cash return. Beyond its operating cash flow, Vox is focused on extracting additional value from non-core assets like its coal royalty database. Although not a current area of focus, the database sale provided an immediate return while retaining upside through future revenue sharing.
Inflation Protection and Leverage for Rising Commodities
Floyd made a compelling case for royalty companies benefiting from inflationary conditions as commodity prices rise. With producers facing persistently high input costs, royalties avoid much of this risk while providing leveraged exposure to underlying metals and minerals. Vox's existing portfolio has embedded growth as assets hit key development milestones. Once acquired, royalty interests require no additional capital expenditure.
Floyd expects tailwinds for commodity prices to persist over the medium to long term. Royalty companies with high-quality assets like Vox are best positioned to capitalize on this trend. He also highlighted Vox's industry-leading dividend yield as providing investors near-term returns alongside anticipated growth.
With its revenue growth, Vox has operating leverage and cash flow to keep acquiring royalties without accessing capital markets. Floyd indicated the company is well-positioned to add further value for shareholders through acquisitions. Vox also has over $8 million in cash to fund additional deals.
Key Takeaways for Investors
Vox Royalty has a portfolio of producing assets generating impressive returns on invested capital, validating its business model.
Disciplined capital allocation focused on high-return royalty deals provides potential upside with downside protection.
As a royalty company, Vox offers leverage to rising commodity prices without direct exposure to producer input cost inflation.
With a growing revenue base and cash balance, Vox is positioned for further accretive portfolio growth ahead.
The company's attractive dividend offers investors near-term returns with anticipated growth from development of existing royalty interests.
For investors seeking commodity exposure with inflation protection, Vox Royalty warrants consideration given its strong execution and potential to build significant value in its royalty portfolio.
View Vox Royalty's company profile: https://www.cruxinvestor.com/companie...
Sign up for Crux Investor: https://cruxinvestor.com
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