Wednesday 3 June 2020 4:05 pm

Hipgnosis shares jump as lockdown streaming boosts music catalogue

Shares in Hipgnosis rose sharply today after the music royalties investment firm said the continued growth of streaming had pushed up the value of its song portfolio.

The London-listed company reported better-than-expected revenue of £64.7m in the year to the end of March, while net asset value grew 17.7 per cent.

Read more: Hipgnosis takes majority stake in Mark Ronson’s publishing catalogue

Shares in Hipgnosis jumped 7.5 per cent following the trading update.

The firm, which generates revenue through licensing deals for its catalogue of hit songs, spent £560m on new songwriter catalogues over the year, taking its total portfolio to 54 catalogues.

In April Hipgnosis said it had acquired the majority of the publishing catalogue of prolific songwriter and producer Mark Ronson. Other recent deals include the complete catalogue of Bon Jovi lead guitarist and songwriter Richie Sambora.

Hipgnosis said its portfolio had been independently valued at £757m, marking an 11.4 per cent increase on its aggregate purchase price of £679m.

The songs fund said it had been boosted by a rise in music streaming during the Covid-19 crisis. In particular the firm benefitted from increased demand for older hits, as new releases have been put on hold and listeners turned into nostalgic, feel-good tracks.

Hipgnosis said it had not suffered any downturn in demand for song placements, despite a collapse in the advertising market and the halting of film releases.

“We are very excited about these results and we are particularly proud that everything we have promised our investors over the last two years has either come to fruition or been exceeded,” said Hipgnosis founder Merck Mercuriadis.

Read more: Hipgnosis secures music catalogue of Bon Jovi songwriter

“We have bought amongst the finest songs of all time against a backdrop of dramatic streaming growth and we are adding significant value by actively managing these great songs and bringing efficiencies to collection.”

Hipgnosis said it was in active discussions on a pipeline of new catalogue acquisitions worth more than £1bn.

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