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Hipgnosis Songs Fund annual portfolio value rises; outlook positive

13th Jul 2023 08:44

(Alliance News) - Hipgnosis Songs Fund Ltd on Thursday said its portfolio value grew over the course of its financial year and remained upbeat on the outlook for the music streaming market.

Operative net asset value per share stood at USD1.9153 on March 31, up 3.6% from USD1.8491 at the same time a year before.

The music intellectual property rights investor said NAV growth was driven primarily by a 4.0% increase in the portfolio's fair value.

Net revenue for the financial year ended March 31 was USD147.2 million, down from USD168.3 million the year before. Pretax loss widened to USD86.6 million from USD16.7 million the year prior as operating expenses shot up to USD233.9 million from USD185 million. This was partly due to financial liabilities from a catalogue bonus provision of USD43.8 million in the year.

The company said the performance of its portfolio, particularly in the second half, gives it confidence despite a challenging economic backdrop.

"These results highlight the continuing validity of our investment thesis. Our markets are buoyant and continue to grow. Streaming, increasingly, provides a utility-style income for holders of Song royalties and the increasing demand for song catalogues from private equity funds and the major record labels demonstrates the attractiveness of this asset class," said Founder and Chief Executive Officer Merck Mercuriadis.

Hipgnosis's total dividend for the year was 5.25 pence, which was unchanged from the year before.

"Looking forward, I believe there is continued reason for optimism. Despite the global economic challenges, our markets continue to grow with strong earnings being reported by the administrators that sit ahead of us in the payment chain," said Founder and CEO Mercuriadis.

"Hipgnosis Songs Fund, with its portfolio of iconic, culturally significant songs, is uniquely placed to benefit from this backdrop and deliver superior shareholder returns and substantial net asset value growth. Both the Board and I are determined to deliver this."

Shares in Hipgnosis were up 1.0% at 76.24p in London on Thursday morning.

By Will Neill, Alliance News reporter

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