Mr. William Tharp reports

GRENVILLE STRATEGIC ROYALTY ANNOUNCES 2015 FIRST QUARTER RESULTS AND DECLARES MAY 2015 DIVIDEND

Grenville Strategic Royalty Corp. has released its financial and operating results for the three-month period ended March 31, 2015.

First-quarter 2015 highlights:

• Revenues were $1,610,690 for the three-month period ended March 31, 2015 (first-quarter 2015).
• Adjusted earnings before interest, taxes, depreciation and amortization (1) were $1,125,132.
• Free cash flow (1) was $165,534.
• Income after taxes was $1,398,981.
• Royalty agreements acquired were $5.2-million for first-quarter 2015, bringing the aggregate value of acquired royalties since inception to the end of first-quarter 2015 to $29.9-million.
• Average royalty payment per million invested (1) was $262,724 for the month of March, 2015.
• The company raised gross proceeds of $25.3-million, composed of $11.5-million closed on Feb. 26, 2015, and $13.8-million subsequent to end of the period.

"Our growing portfolio performed well in the quarter, generating record quarterly revenue and adjusted EBITDA and material improvements in other key operating metrics, such as royalty agreements acquired and average royalty payment per million invested," said William Tharp, president and chief executive officer of Grenville. "The portfolio is delivering on its objectives, and our unique capital offering continues to fill an important niche in the North American small-to-medium-enterprise growth-capital marketplace. Our pipeline of prospective investments remains robust, positioning us well for continued growth and diversification in 2015."

                            FINANCIAL HIGHLIGHTS

                                   Three-month period    Three-month period 
                                 ended March 31, 2015  ended March 31, 2014 

Revenues                                   $1,610,690              $147,071 
Profit (loss) after income taxes            1,398,981            (3,681,246)
Basic earnings (loss) per share                0.0208               (0.1280)
Diluted earnings (loss) per share              0.0185               (0.1280)
Adjusted EBITDA/EBITDA (loss) (1)           1,125,132                (7,217)
Free cash flow (1)                            165,534               664,948 
Royalty agreements acquired in                                              
the period                                  5,219,400             2,671,215 

Revenues

Revenues were $1,610,690 for first-quarter 2015, compared with $147,071 for first-quarter 2014. The substantial increase in revenues was due to total aggregate investments increasing by 552 per cent between first-quarter 2014 and first-quarter 2015, as the company continues to scale its portfolio. The most significant component of revenues is royalty payment income, which represented 97.4 per cent of total revenue in first-quarter 2015.

Operating expense

Total operating expenses were $714,616 for first-quarter 2015 and included a net foreign exchange gain of $1,261,292, of which $1,235,347 related to an unrealized foreign exchange gain following the translation of royalty agreements acquired denominated in United States dollars and a share-based payment expense of $27,959. Total operating expenses for first-quarter 2014 were $3,828,317 and included expenses of $3,636,197 directly attributable to the company's reverse takeover completed in first-quarter 2014. Operating expenses for first-quarter 2015, excluding foreign exchange gains, were approximately $185,000 per month.

Income (loss) after taxes

Income (loss) after taxes was $1,398,981 for first-quarter 2015, compared with a loss after taxes of $3,681,246 for first-quarter 2014. The increase over the comparable period was due to higher revenues, as well as the foreign exchange gain of $1,261,292 in first-quarter 2015 and the total RTO-related costs of $3,636,197 that were incurred in first-quarter 2014.

Adjusted EBITDA (loss) (1)

Adjusted EBITDA (1) was $1,125,132 for first-quarter 2015, compared with an adjusted EBITDA loss of $7,217 for first-quarter 2014. The increase in adjusted EBITDA (1) since 2014 was primarily due to higher revenues driven by new royalty agreements acquired since the end of March, 2014.

Free cash flow (1)

Free cash flow (1) was $165,534 for first-quarter 2015, compared with $664,948 for the three-month period ended March 31, 2014. The primary decrease is due to timing differences in tax recoveries and receivables during the period.

Dividend

Starting on March 15, 2015, the company commenced the payment of a monthly dividend of 0.0416 cent per share. The amounts paid in March and April, 2015, were $332,877 and $334,114, respectively. The expected dividend to be paid on May 15, 2015, is $334,673. All dividend payments were made from the company's available free cash flow (1).

Average royalty payment per million invested (1)

The average royalty payment per million (1) invested for the month of March, 2015, was $262,724, which exceeded the company's target of $250,000 per month.

Rolling three-month average investment per month (1)

As of March 31, 2015, the rolling three-month average investment per month (1) was $2,659,800.

Rolling three-month average investment per transaction (1)

As of March 31, 2015, the rolling three-month average investment per transaction (1) was $1,045,489.

Declaration of May dividend

The board of directors of the company has declared a dividend of 0.0416 cent per common share for the month of May, 2015, representing five cents per share on an annualized basis. The dividend is payable on June 15, 2015, to shareholders of record on May 29, 2015. The ex dividend date is May 27, 2015.

This dividend is designated by the company to be an eligible dividend for the purpose of the Income Tax Act (Canada) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.

The declaration and payment of dividends are at the discretion of the board of directors of the company, and any future declaration of dividends will depend on the company's financial results, cash requirements, future prospects and other factors deemed relevant by the board of directors of the company.

Outlook

As the company continues to scale its business, it is building a diversified portfolio consisting of cyclical, neutral and defensive asset classes. The strength and diversity of this portfolio have also been designed to mitigate a level of portfolio impairment that would be expected in small-to-medium-enterprise investments. The company has invested more than $29-million of capital across 24 investments in 19 portfolio companies. Management's target in building a balanced portfolio is based on the pricing of risk in the SME market at a rate of $250,000 average royalty payment per million (1) invested. The portfolio has reached a scale at which, as designed, it is generating stable income and adjusted EBITDA (1), allowing the company to declare dividends.

Grenville's royalty agreements with its portfolio companies provided revenue to the company of approximately $1.6-million for the three-month period ended March 31, 2015. As at the date of this release, management estimates April, 2015, revenues will be approximately $600,000, reflecting the existing portfolio and new investments added to date. Operating expenses for first-quarter 2015, excluding any foreign exchange effects, were approximately $200,000 per month and are estimated to run in the range of $1.9-million and $2.4-million on an annualized basis in second-quarter 2015.

Grenville's unique capital offering continues to fill an expansive niche in North American small-to-medium-enterprise growth-capital markets. With continued access to financing accretive to shareholder value, the company is confident it will be able to add new portfolio companies to the company's existing portfolio holdings. Each new portfolio company added will further diversify and strengthen Grenville's existing portfolio balance. Management also believes that the revenue contribution per portfolio company added will be priced at roughly the same rate as existing companies within the portfolio.

Grenville's financial statements and management's discussion and analysis for the three months ended March 31, 2015, will be filed on SEDAR and will be available on Grenville's website.

(1) Please refer to the company's management's discussion and analysis for definitions and reconciliations of these non-IFRS (international financial reporting standards) measures to measures prescribed by IFRS.

Conference call details

Grenville will host a conference call to discuss these results at 8 a.m. Eastern Time today, Wednesday, May 13, 2015. William Tharp, chief executive officer; Donnacha Rahill, chief financial officer; and Steven Parry, executive chairman, will co-chair the call. Participants should call 647-788-4922 or 877-291-4570 and ask an operator for the Grenville earnings call. Please dial in 10 minutes prior to the call to secure a line. A replay will be available shortly after the call. To access the replay, please dial 416-621-4642 or 800-585-8367 and enter access code 37098416. The replay recording will be available until 11:59 p.m. Eastern Time on May 20, 2015.

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