Hipgnosis Songs Fund Annual Revenue Jumps 25 Percent, Founder Touts Music Streaming Outlook Despite Economic Clouds

Hipgnosis Songs Fund Annual Revenue Jumps 25 Percent, Founder Touts Music Streaming Outlook Despite Economic Clouds

London-based Hipgnosis Songs Fund Ltd. said Thursday that revenue for its fiscal year ended March 31 jumped 24.7 percent, “partly
due to the catalogue acquisitions during the period.”

The song rights powerhouse, founded in 2018 by Merck Mercuriadis, a former music manager for the likes of Elton John, Beyoncé and Guns N’ Roses, reported annual revenue of $200.4 million, compared with $160.7 million in the previous year.

One key profitability metric, earnings before interest, taxes, depreciation and amortization (EBITDA), rose 21.8 percent to $129.9 million. But amid higher costs, the company, whose stock is listed in London, swung to a fiscal-year operating loss of $16.7 million, compared with a profit of $44.5 million in the previous fiscal year. Royalty costs for the year rose to $32.0 million from $22.5 million, the firm said.

Hipgnosis on Thursday also highlighted that its portfolio now includes 146 catalogues with 65,413 songs with an aggregate value of $2.69 billion. It acquired eight catalogues in the latest fiscal year, with songs from the likes of the Red Hot Chili Peppers, Christine McVie of Fleetwood Mac, Ann Wilson of Heart and Rhett Akins.

“Over the last four years we have acquired an incomparable portfolio of some of the most successful and culturally important songs of all time, now valued at $2.7 billion,” said Mercuriadis, who also serves as CEO of Hipgnosis Song Management, the fund’s investment adviser. “The unique strength of our catalogue is demonstrated by the 9.9 percent increase in the operative net asset value (NAV) to $1.8491 per share, as reported by our independent portfolio valuer.”

He also addressed current economic clouds and rising inflation. “As we look forward, we continue to expect strong global revenue growth driven by the continued adoption of paid-for streaming,” Mercuriadis said. “Despite the macro-economic environment, the attractiveness of the music streaming proposition continues to grow. It is the lowest-cost entertainment subscription service and, with its offering of a near complete repertoire of global music, provides the most comprehensive offering of the on-demand, entertainment subscription services.”

In May, Hipgnosis unveiled a deal to acquire the song catalog of Justin Timberlake, who said that Mercuriadis “values artists and their creative work and has always been a strong supporter of songwriters and storytelling.”