RCS - Round Hill Music - Edison issues review on Round Hill Music Royalty

Round Hill Music Royalty FundAnnouncement

09/06/2023 10:45

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RNS Number : 2659C  Round Hill Music Royalty Fund Ltd  09 June 2023

London, UK, 9 June 2023

 

Edison issues review on Round Hill Music Royalty Fund (RHM)

Round Hill Music Royalty Fund's (RHMRF's) Q123 trading update showed a strong
revenue performance building on the good FY22 results. Combined net
publishers' share and net label share was up 91% over Q122, a gain of 20% on a
like-for-like basis. RHMRF's economic end FY22 NAV per share had increased 13%
over the prior year to US$1.27, with revenue up 32%, reflecting the high
quality of the catalogue and the added value from active management of
portfolio assets. This is despite a market over-shadowed by a backdrop of
rising interest rates and constrained household budgets. We view the size of
the discount to NAV as overstated.

 

RHMRF showed an 18% NAV uplift in 2022 in total return terms, ahead of broad
equity markets and its direct peer. The portfolio is valued using an 8.5%
discount rate, still reasonably conservative despite rising interest rates and
in line with its direct peer. The portfolio valuation has been recently
corroborated by a second independent valuation (from FTI Consulting), giving
additional confidence. Despite this, the discount to last reported NAV has
widened significantly to 37.8% (from 5% at end-2021), broadly in line with its
peer. The 'C' share conversion in May 2022 reduced dividend cover, which
nevertheless improved to 0.98x in FY22 from 0.8x in H122. RHMRF anticipates
the dividend to be fully covered in FY24, while in FY23 cover may be below
1.0x due to higher interest expenses amid rising interest rates.

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(https://www.edisongroup.com/research/high-quality-catalogue-underpins-value/32392/)
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