RHM.L Regulatory News (RHM)

25 May 2023

LEI: 213800752UO1CJTV8C39

Round Hill Music Royalty Fund Limited

("Round Hill Music" or the "Company")

Q1 2023 Trading Update

Continued strong revenue growth across catalogues supported by active song management

Round Hill Music (LSE: RHM), which invests in evergreen music catalogues with proven longevity and revenue streams that have growth potential, provides a trading update on the three months to 31 March 2023. The Round Hill Music portfolio of catalogues, valued at US$602.6 million[1] (as at 31 December 2022), includes enduring songs by artists such as the iconic 90s Seattle band Alice In Chains, British Rock band Bush, Celine Dion, country music star Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake.

Following its strong performance in 2022, the Company's positive growth trajectory continued through the first three months of 2023. Combined Net Publisher's Share ("NPS") and Net Label Share ("NLS")[2] for the first quarter of 2023 was US$10.1 million, up 91% on the first quarter of 2022 (US$5.3 million).

While the majority of this income growth was due to acquisitions last year, comprising catalogues from Alice In Chains and Whitesnake's David Coverdale, like-for-like revenues from the Company's Initial Investments[3] increased by 20%. Within this, adjusted income from publishing rights was up 22% and adjusted income from masters rights was up 14%.[4] Income from the Carlin interest increased by US$1.0 million, or +200%, due to the improved collections of uncollected digital income from our sub-publisher which collects in territories outside the US, UK and Nordic countries.

Revenue growth was also driven by the successful proactive management of the Company's portfolio of song catalogues by Round Hill Music LP's (the 'Investment Manager') c.70-strong integrated platform. The Company's investment strategy is focused on songs with enduring appeal and where additional value can be unlocked by careful and tailored management by its creative team of specialists.

The effectiveness of the Investment Manager's dynamic and considered approach is illustrated by the increase in revenue from sync placements, up 74% year-on-year for the Initial Investments. Total sync income grew to US$2.1 million in the first quarter, accounting for 21% of Group Revenue. Notable sync deals from the period include:

· Louis Armstrong's 'What a Wonderful World', which was used in several projects including UK documentary series 'Our Universe' on Netflix; the film 'I Used to be Famous'; and a Neom: Sustainable City commercial

· 'I've been Everywhere' by Australian country singer Geoff Mack, which featured in a Tripfinder advertising campaign

· The Backstreet Boys' 'I want it that Way', which featured in a commercial for laundry brand Downy Rinse and Refresh

· Lil Wayne's 'Uproar', which samples Brian Holland's 'You Keep Me Hangin' On' and which was placed in several TV shows including 'Rap Sh!t' and 'Winning time: The Rise of the Lakers Dynasty'

Josh Gruss, CEO of Round Hill Music LP, commented:

"These first quarter results reconfirm our positive outlook for the year ahead. The revenue growth we have delivered, both actively and organically, reflects the quality and expertise of our in-house platform, composed of people who are passionate about our songs, as well as the strength of our prudent investment strategy which focuses on iconic music with enduring appeal. These results, which are further supported by the beneficial music industry tailwinds that show no sign of dissipating, provide a solid foundation and reason for continued optimism."

FOR FURTHER INFORMATION

 About Round Hill Music Royalty Fund Limited

Round Hill Music Royalty Fund invests in high quality, evergreen music catalogues that have proven longevity and revenue streams, with the aim of providing investors with an attractive level of regular and growing income and capital returns, underpinned by the positive structural drivers of the global music industry.

The portfolio, valued at US$602.6 million[5] as at 31 December 2022, is diversified by income stream and music genre, with value created through the proactive and careful management and commercialisation of the repertoire through synchronisation (placement in films, television series and brand campaigns); licensing; data cleaning; and distribution (including across platforms such as Amazon Music, Apple Music, Deezer, and Spotify). 

Its 51 catalogues, totalling over 120,000 songs, include music performed by artists such as Alice in Chains, Bonnie Tyler, Bruno Mars, Céline Dion, Lady A, Louis Armstrong, The Offspring, The Supremes, Whitesnake and Wilson Pickett.

The portfolio of rights includes copyright interests in a musical composition or song (which can be the writer's share, publisher's share and/or performance rights), the rights to the recording of a musical composition or song (the master recording rights), as well as music rights and assets that meet the Company's investment strategy and objectives. The Company is a non-cellular Guernsey company.

A playlist of RHM's top 50 earners can be listened to on Spotify here. We recommend it served loud.

About Round Hill Music LP (the Investment Manager)

Founded in 2010, Round Hill Music LP is a fully integrated owner and operator of music copyright properties. It currently manages 150+ catalogues, totalling 330,000+ songs with a combined value of c.US$1.2 billion.

With c.70 employees located in the major music and entertainment markets of Nashville, New York, Los Angeles and London, Round Hill Music LP has an experienced management and investment team with an established reputation and extensive expertise in the music and finance industries.