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Hipgnosis Songs Fund having a ball with decade's top pop songs

Published: 09:39 11 Dec 2019 GMT

Hipgnosis Songs Fund Limited - Hipgnosis Songs Fund’s portfolio value increases with 2010s classics
The portfolio contains songs by Bruno Mars

Hipgnosis Songs Fund Ltd (LON:SONG) saw revenues soaring thanks to valuation uplifts to the portfolio of its pop music catalogues.

The company, which makes money through exposure to songs and related intellectual property rights, pointed out it co-owns five of the Billboard Magazine's recently announced “Top 10 Songs of the Decade”, including number-one, Uptown Funk by Mark Ronson featuring Bruno Mars, and third-placed Shape of You by Ed Sheeran.

READ: Hipgnosis Songs tops the charts with another massive fundraising hit

In the first half to 30 September, net income from the portfolio rocketed 68% to £22.6mln compared to the previous six months, which was ahead of management's expectations, with profit before tax 76% higher at £12.6mln.

The value of the portfolio jumped 63% to £344.8mln, for a total of 27 catalogues comprising 7,475 songs, of which 1,061 reached number-one positions in global charts, 4,027 appeared in top-10 chart positions and 15 won Grammy awards.

The company, which has £66.2mln in the bank at the year's halfway point, said there is over £1bn in the investment pipeline.

In a separate announcement, Hipgnosis announced it acquired a music catalogue from Jeff Bhasker, who co-wrote and produced Uptown Funk among other songs, and won five Grammy awards.

More clarity needed

Broker Liberum pointed out that Hipgnosis has delivered a 12% total return in the 16 months since floating on the market, although they said it should do more in terms of disclosure.

“As it stands, a lot of trust must be placed in the manager and the third-party valuations of the catalogues,” analysts said in a note.

“Individual catalogue acquisition costs and multiples are not currently disclosed by the company due to confidentiality reasons, which makes it difficult to establish where and why the uplifts are being applied.”

 

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