Music and intellectual property rights investment company Hipgnosis Songs Fund (SONG:AIM) posted full year results for the period to the end of March and raised its dividend slightly to reflect the steady increase in streaming income.

Thanks to a substantial increase in streaming and performance rights during the pandemic, net revenues for the year rose 66% to $138.4 million.

At the same time, the firm’s ‘operative’ net asset value per share – which reflects the fair value of its catalogues as determined by an independent valuer – increased by 11.3% to $1.6829 per share, using a discount rate of 8.5% (down from 9% the previous year).

Including dividends of 5.125p paid during the year, the total operative dollar NAV return was 15.7% according to the company.

ROCK AND POP ROYALTY

Spending on music catalogues reach $1.089 billion, including songs by Lindsey Buckingham/Fleetwood Mac, Debbie Harry and Chris Stein/Blondie, Chrissie Hynde/The Pretenders, Barry Manilow, Steve Winwood and Neil Young.

Since floating, the company has acquired roughly $2 billion of music rights across 138 catalogues and numerous musical genres.

‘We are delighted to announce a strong set of annual results which reports on a remarkable year for Hipgnosis, said founder Merck Mercuriadis.

‘Revenues have been highly resistant during the course of this incredibly challenging year and are well placed for future growth with global streaming adoption beating all expectations. This has turned music from being a discretionary or luxury purchase to very much being a utility as a result of the convenience and access afforded by streaming’ he added.

The company said it had raised its annual dividend target by 5% from 5.125p per share to 5.25p per share. Last year’s payout was covered 1.58 times by leveraged free cash flow, while the firm has net debt of nearly $465 million.

Shares were unchanged at 122p.

 

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Issue Date: 05 Jul 2021