(Alliance News) - Round Hill Music Royalty Fund Ltd on Wednesday touted the quality of its catalogue, alongside effective and active management, after seeing revenue rise in the first half.
RHM is a private equity firm exclusively dedicated to investments in revenue-generating music copyright assets. Since listing in London three years ago, it has invested in music rights comprising 51 catalogues, with over 150,000 songs.
Its strategy is to carefully select "evergreen" music rights to generate resilient income, with a portfolio including songs from Celine Dion, James Brown, Bonnie Tyler, Phil Collins, Back Street Boys and Louis Armstrong.
For the six months ended June 30, the firm reported group revenue of USD17.8 million, up 38% from USD12.9 million a year prior. This included a 52% adjusted uplift in synchronisation income to USD3.3 million from USD2.2 million.
Further, it said that a 9.3% adjusted like-for-like growth in initial investments reflected the quality of its underlying catalogue.
Round Hill's economic net asset value per share on June 30 was USD1.27. Its total economic NAV was USD519.5 million, marginally lower from USD519.6 million on December 31.
The company has delivered an economic NAV total return of 37% since its initial public offering in November 2020.
Round Hill told investors on Wednesday that its strong results, driven by active music catalogue management, were reflected in the agreed offer price from Concord.
In September, Round Hill said it had reached an agreement with Alchemy Copyrights, LLC, trading as Concord on the terms of a recommended cash offer. According to the offer, Concord Cadence Ltd, a wholly-owned subsidiary of Concord, will acquire the entire issued and to be issued share capital of the company.
Under the terms of the acquisition, shareholders will receive USD1.15 in cash for each share, representing a premium of 67% to the closing price of USD0.69 on September 7.
The Round Hill board said it intends to recommend unanimously that its shareholders vote in favour of the scheme. It also intends to declare a special dividend of USD0.005 per share, to be paid before the takeover.
"Following a strong performance in 2022 I am pleased that the company's positive growth trajectory has continued through the first half of 2023. Our differentiated and diversified portfolio of high quality music rights, ably managed by the Investment Manager, has once again delivered strong like-for-like and group revenue growth. These results and the ongoing positive developments have been reflected in the terms of the proposed offer," said Chair Robert Naylor.
Round Hill declared a total dividend of USD0.0225 per share.
Round Hill Music Royalty Fund shares were flat at USD1.14 each in London on Wednesday.
By Holly Beveridge, Alliance News reporter
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