Hipgnosis Songs to pay dividend despite Covid-19

Hipgnosis Songs Fund kept its interim dividend unchanged despite the potential impact on revenues from the Covid-19 crisis.

The buyer of song rights declared a dividend of 1.25p a share for the three months to the end of March. The payment is the same as a year ago and is one of four the company makes each year.

Hipgnosis said the dividend was covered by distributable income and that its outlook was positive though the coronavirus crisis may reduce revenues from live performances and commercial licensing. In paying the dividend Hipgnosis is bucking the trend for many companies to scrap payouts to conserve cash during the coronavirus emergency.

The FTSE 250 company buys the rights to songs by artists such as Mark Ronson, Bill Withers and Bon Jovi's Richie Sambora and receives royalties from sales and other uses of the songs. Hipgnosis was boosted in February by a US Copyright Board ruling that will increase songwriter payments from streaming companies such as Spotify.

"The continued growth in streamed consumption of our existing music portfolio, our focus on improved revenue efficiencies and increased earnings in the US as a result of the Copyright Board ruling combined with a strong pipeline of new catalogue acquisition opportunities gives us continued confidence in our model and our ability to execute well," Hipgnosis said.