(Alliance News) - Hipgnosis Songs Fund Ltd on Monday reported an 11% rise in operative net asset value return and a like-for-like valuation uplift across its portfolio, as it continues to benefit from higher streaming levels through the pandemic.
The Guernsey-registered music royalties investment company said its operative net asset value per share was USD1.6829 at the end of March, up 11% from USD1.5114 a year ago. The like-for-like valuation uplift across the portfolio was 10% for the financial year that ended March 31.
Hipgnosis reported pretax profit of USD44.5 million for its most recent financial year, up 7.3% from USD41.5 million the year before. Revenue almost doubled to USD160.8 million from USD82.2 million.
The FTSE 250-listed company said higher streaming demand during the pandemic offset loses from other income sources. Royalties from emerging platforms - such as TikTok and Peloton - and a drop in the portfolio valuer's discount rate to 8.5% from 9.0% at the half year point, also lifted results, according to Hipgnosis.
The company paid total dividends of 5.125 pence, with plans to deliver a 5.25p dividend in the current financial year ending March 31, 2022.
"Having delivered another strong, and index beating, set of results, having advocated for songwriters at the highest level including the DCMS hearings taking place in UK Parliament and having increased our synch income through Song Management, as a percentage of total revenue, I'm delighted to say our ambitions are turning into reality," said Founder Merck Mercuriadis.
The company acquired 84 catalogues in the recent financial year for USD1.09 billion, taking the total portfolio to USD2 billion, invested across 138 catalogues. In June, Hipgnosis said it plans to raise a further GBP150 million in a placing of 124.0 million shares for a "substantial pipeline of songs" in the coming year.
"Music has become recognised as a resilient asset class and I am confident that owners of the rights to songs such as your company should continue to benefit from the long-term and consistent revenues that they can produce," Chair Andrew Sutch said.
Shares in Hipgnosis were trading down 0.4% at 121.92 pence each in London on Monday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
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Hipgnosis Song. (SONG)