£song Analyst conference call tomorrow at 4pm
HIPGNOSIS…….INTERIM RESULTS and ANOTHER MUSIC CATALOGUE PURCHASE
The PLC had recently announced that operative NAV was up 5.03% to 108.46p and along with the with dividends paid a total return of 7.45% has been bagged so far this year. The PLC IPO in July 2018 and has raised £625m since. £231m was raised by way of a C share issue in October (at 100p) which is already 75% spent of the money. From a positioning point, SONG moved away from the Specialist Fund Segment to the Premium Segment of the Main Market of the London Stock Exchange recently and earlier hire JP Morgan as joint brokers, no doubt to attract US investors and help provide a source of lending. The recent FTSE quarterly review out 4/12 confirmed that SONG has entered the FTSE SmallCap and All Share Indices and importantly for shareholders is on the reserve list of the FTSE350. Demand from the index investors then. The 1H statement would indicate further cash raising will occur as the pipeline of catalogues is still over $1bn and always could be!
At the 1H cut off date, the PLC had acquired 27 catalogues with 7475 songs and for a total of £320m. Since then 15 more catalogues were bought, adding 3750 songs. As of 10/12 £505m has been invested in song content and on a blend of 13x. Only one deal sum has been given since the PLC started ( bling rapper) but assume the range must have a few outliers. The PLC gives good detail in the factsheet on the styles and recently highlighted the quality off the modern music owned. Longivity of a song is relevant. Size matters for administration with the expense of 1.76% up on due diligence checks etc. 1H portfolio revenues were £22.6m, an adjusted profit of £14m with 3.55p of eps so more than covering the dividend payment. Streaming revenues are ahead of estimates with Spotify recently announcing 113m premium subscribers, up 31% yoy or total users of 248m. 2.5p of a dividend has been paid ( 1.25p x 2) and 5p the estimate for the YE 31/3/20 . The song quality is in the manager hands, portfolio achievements and some better known tunes / artists highlighted in the RNS and in today’s purchase details. The analyst call is tomorrow at 4pm with The Merck state side I…
