Hipgnosis Songs Fund net revenues and EBITDA grow as NAV improves

Investment firm Hipgnosis Songs Fund said on Thursday that both net revenues and underlying earnings had grown in the six months ended 30 September as its net asset value increased 2.5% throughout the period.

Net revenues grew by 31% to $74.1m as a result of catalogue acquisitions since the comparative period a year earlier, pushing EBITDA up 16.2% year-on-year to $54.6m.

Hipgnosis stated its operative NAV increased by 2.5% to $1.7242 per share over the six-month period. Including dividends paid, the group stated the uplift represented a total operative dollar NAV return of 4.63% for the half, taking total NAV return since its IPO to 46.7%.

However, pro-forma annual revenues for 2020 fell 7.9% to $121.3m, with a 19.5% fall in performance income due to Covid-19 lockdowns more than offsetting a 4% uptick in streaming income.

Net debt at 30 September was $550.9m, reflecting 28.7% of operative NAV.

Founder Merck Mercuriadis said: "Whilst we are in an incredibly strong position with our Catalogue of iconic songs, this period has been challenging. As we have previously stated, the time lag between the consumption of songs and the royalty statements being processed, which is the point at which we recognise revenues, means that the impact of Covid-19 is now being fully felt within these results.

"In particular, and along with the wider music industry, the closure of live music venues, pubs, bars and restaurants during various lockdowns has impacted the like-for-like performance earnings of our Catalogues during this period. Our vintage catalogues have made up for a fall in their performance earnings with outstanding streaming performance earnings as consumers turned to classics during lockdown."

As of 0800 GMT, Hipgnosis shares were up 0.65% at 127.02p.