LONDON (CelebrityAccess) — Merck Mercuriadis’ music investment vehicle, the Hipgnosis Songs Fund, has released its year-end results for its 2021 financial year, indicating the company’s catalog is now worth $2.7 billion.
Notably, Operative NAV, a formulation that calculates the value of a catalog of music, rose 9.9% in 2021, which Hipgnosis says is a result of the strong performance of its song library.
Gross revenue rose 24.7% to $200.4 million for the year, driven in part by catalog acquisitions during the fiscal year, which ended March 31.
EBITDA, or earnings before interest, taxes, depreciation and amortization, increased 21.8% to $129.9 million in 2021.
Hipgnosis’ financial filings also revealed key metrics about the company, whose portfolio now includes 146 catalogs containing a total of 65,413 songs.
In 2021, Hipgnosis acquired eight different songbooks including Red Hot Chili Peppers, Christine McVie of Fleetwood Mac, Ann Wilson of Heart, Rhett Akins and Stefan and Jordan Johnson – The Monsters & Strangerz which they purchased with proceeds from a successful stock. issue in July 2021 which raised $215 million.
At the end of its fiscal year, Hipgnosis had net debt outstanding of $569.9 million, representing just over 25% of its catalog value, the company said.
Commenting on the results, Merck Mercuriadis said:
“Over the past four years, we’ve acquired an unrivaled portfolio of some of the most successful and culturally significant songs of all time, now valued at $2.7 billion. The unique strength of our catalog is demonstrated by the 9.9% increase in operating net asset value to $1.8491 per share, as reported by our independent portfolio evaluator, and a total net asset value return of 14 .2%. This is largely due to our signature songs outpacing general streaming market growth, particularly in the second half of 2021, which validates our investment strategy.
“As we look to the future, we continue to expect strong global revenue growth from the continued adoption of paid streaming. Despite the macro-economic environment, the attractiveness of the Music Streaming offer continues to grow. It is the lowest priced entertainment subscription service, and with its offering of a nearly comprehensive repertoire of global music, it offers the most comprehensive offering of on-demand entertainment subscription services. This view is shared by leading industry voices, including Goldman Sachs, which recently updated its double-digit annual growth forecast to 2030 in its gold standard Music In The Air: The Music Still Rings well in a macroeconomic slowdown; increase global industry forecast report.
“With clear evidence of a strong recovery in global performance revenue, the recent CRB III decision to increase streaming royalty rates for songwriters and the potential for further improvements in the upcoming CRB IV decision , all on top of the extremely strong growth in streaming, I believe we are looking forward to very attractive market conditions. Given our unrivaled collection of iconic songs, I believe Hipgnosis is perfectly positioned to continue to deliver excellent returns to our shareholders.