Hipgnosis ups dividend target after song spree

Hipgnosis Songs Fund increased its dividend target and said its C shares would convert to ordinary equity after a summer of acquisitions.

The FTSE 250 investment company said it was targeting an annual dividend of 5.25p a share, up from a previous target of 5p a share. It plans to make four payments of 1.3125p a share starting with the three months to the end of September.

Hipgnosis said it had spent about 82% of the £200m it raised in July buying the rights to songs by artists such as Blondie and Barry Manilow. It said the raised dividend target was based on reliable income from song rights during the Covid-19 crisis and rising global recorded music revenues because of streaming.

The company invests shareholders' money by buying up the rights to songs and receiving royalties from sales, streaming, use in adverts and other sources. It said the shares from its July C share fundraising would be converted into ordinary equity.

The company, headed by former Elton John and Beyonce manager Merck Mercuriadis, will hold an investor day on 11 September to discuss its plans.

Mercuriadis said: "It's been a long summer focused on acquisitions and active management but I'm delighted with our progress and look forward to detailing it all for our investors at our capital markets day on Friday."