8th Dec 2022 09:57
(Alliance News) - Hipgnosis Songs Fund Ltd on Thursday said net asset value per share was down, but it expects continued strong growth in the wider global music market.
The London-based music intellectual property investment company said its NAV per share on September 30 was 125.90 cents, down 3.6% from 130.65 cents on March 31.
Hipgnosis Songs said pretax operating loss in the six months that ended September 30 was USD16.3 million, narrowed from USD18.0 million a year earlier.
It said earnings before interest, tax, depreciation and amortisation was USD63.8 million, up 17% from USD54.6 million. This was due to increased revenue, which rose 7.5% to USD91.7 million from USD85.3 million.
An interim dividend of 1.31p was declared, unchanged from a year earlier.
Hipgnosis Songs expects continued annual growth in the global music market, and said it will benefit from increased revenue via social media, gaming and lifestyle channels.
"Despite all of this positive news, I share the disappointment of shareholders that the true value of our iconic songs is not being reflected in today's share price," said Founder & Chief Executive Officer Merck Mercuriadis.
Mercuriadis continued: "The current share price implies that our company is valued using a 12% discount rate, presenting an incredible investment opportunity considering this is a deep discount compared to multiples currently being paid in the market."
Shares in Hipgnosis were up 3.4% to 82.86 pence in London on Thursday morning, but have fallen over 30% since January.
On September 30, Hipgnosis Songs entered into a new USD700 million revolving credit facility running for five years, re-financing its pre-existing RCF in full and providing additional working capital flexibility. It stressed any borrowings would not break its investment policy of staying within 30% of NAV.
By Greg Rosenvinge, Alliance News reporter
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