REG - Round Hill Music - Q1 2023 Trading Update

Round Hill Music Royalty FundAnnouncement

25/05/2023 07:00

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RNS Number : 5648A  Round Hill Music Royalty Fund Ltd  25 May 2023

25 May 2023

 

LEI: 213800752UO1CJTV8C39

 

Round Hill Music Royalty Fund Limited

("Round Hill Music" or the "Company")

 

Q1 2023 Trading Update

 

Continued strong revenue growth across catalogues supported by active song
management

 

 

Round Hill Music (LSE: RHM), which invests in evergreen music catalogues with
proven longevity and revenue streams that have growth potential, provides a
trading update on the three months to 31 March 2023. The Round Hill Music
portfolio of catalogues, valued at US$602.6 million 1  (#_ftn1) (as at 31
December 2022), includes enduring songs by artists such as the iconic 90s
Seattle band Alice In Chains, British Rock band Bush, Celine Dion, country
music star Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake.

 

Following its strong performance in 2022, the Company's positive growth
trajectory continued through the first three months of 2023. Combined Net
Publisher's Share ("NPS") and Net Label Share ("NLS") 2  (#_ftn2) for the
first quarter of 2023 was US$10.1 million, up 91% on the first quarter of 2022
(US$5.3 million).

 

While the majority of this income growth was due to acquisitions last year,
comprising catalogues from Alice In Chains and Whitesnake's David Coverdale,
like-for-like revenues from the Company's Initial Investments 3  (#_ftn3)
increased by 20%. Within this, adjusted income from publishing rights was up
22% and adjusted income from masters rights was up 14%. 4  (#_ftn4) Income
from the Carlin interest increased by US$1.0 million, or +200%, due to the
improved collections of uncollected digital income from our sub-publisher
which collects in territories outside the US, UK and Nordic countries.

 

Revenue growth was also driven by the successful proactive management of the
Company's portfolio of song catalogues by Round Hill Music LP's (the
'Investment Manager') c.70-strong integrated platform. The Company's
investment strategy is focused on songs with enduring appeal and where
additional value can be unlocked by careful and tailored management by its
creative team of specialists.

 

The effectiveness of the Investment Manager's dynamic and considered approach
is illustrated by the increase in revenue from sync placements, up 74%
year-on-year for the Initial Investments. Total sync income grew to US$2.1
million in the first quarter, accounting for 21% of Group Revenue. Notable
sync deals from the period include:

·    Louis Armstrong's 'What a Wonderful World', which was used in several
projects including UK documentary series 'Our Universe' on Netflix; the film
'I Used to be Famous'; and a Neom: Sustainable City commercial

·    'I've been Everywhere' by Australian country singer Geoff Mack, which
featured in a Tripfinder advertising campaign

·    The Backstreet Boys' 'I want it that Way', which featured in a
commercial for laundry brand Downy Rinse and Refresh

·    Lil Wayne's 'Uproar', which samples Brian Holland's 'You Keep Me
Hangin' On' and which was placed in several TV shows including 'Rap Sh!t' and
'Winning time: The Rise of the Lakers Dynasty'

 

Josh Gruss, CEO of Round Hill Music LP, commented:

 

"These first quarter results reconfirm our positive outlook for the year
ahead. The revenue growth we have delivered, both actively and organically,
reflects the quality and expertise of our in-house platform, composed of
people who are passionate about our songs, as well as the strength of our
prudent investment strategy which focuses on iconic music with enduring
appeal. These results, which are further supported by the beneficial music
industry tailwinds that show no sign of dissipating, provide a solid
foundation and reason for continued optimism."

 

 

FOR FURTHER INFORMATION

 Round Hill Music LP
 Josh Gruss, Founder and CEO    Via Fourth Pillar below
 Steve Clark, COO

 Cenkos
 Sales:
 Justin Zawoda-Martin           +44 20 7397 1923
 Daniel Balabanoff              +44 20 7397 1909
 Andrew Worne                   +44 20 7397 1912

 Corporate:
 James King                     +44 20 7397 1913
 Will Talkington                +44 20 7397 1910

 Fourth Pillar (Financial PR)
 Claire Turvey                  +44 7850 548 198 / claire@thefourthpillar.co.uk
 Lynne Best                     +44 7763 619709 / lynne@thefourthpillar.co.uk
 Tomas Nevrkla                  +44 7963 548865 / tomas@thefourthpillar.co.uk

 JTC
 Mariana Enevoldsen              +44 1481 702 485

 About Round Hill Music Royalty Fund Limited

Round Hill Music Royalty Fund invests in high quality, evergreen music
catalogues that have proven longevity and revenue streams, with the aim of
providing investors with an attractive level of regular and growing income and
capital returns, underpinned by the positive structural drivers of the global
music industry.

The portfolio, valued at US$602.6 million 5  (#_ftn5) as at 31 December 2022,
is diversified by income stream and music genre, with value created through
the proactive and careful management and commercialisation of the repertoire
through synchronisation (placement in films, television series and brand
campaigns); licensing; data cleaning; and distribution (including across
platforms such as Amazon Music, Apple Music, Deezer, and Spotify).

Its 51 catalogues, totalling over 120,000 songs, include music performed by
artists such as Alice in Chains, Bonnie Tyler, Bruno Mars, Céline Dion, Lady
A, Louis Armstrong, The Offspring, The Supremes, Whitesnake and Wilson
Pickett.

The portfolio of rights includes copyright interests in a musical composition
or song (which can be the writer's share, publisher's share and/or performance
rights), the rights to the recording of a musical composition or song (the
master recording rights), as well as music rights and assets that meet the
Company's investment strategy and objectives.  The Company is a non-cellular
Guernsey company.

A playlist of RHM's top 50 earners can be listened to on Spotify here
(https://open.spotify.com/playlist/4P46C6opRHt0reXwyy7dRt?si=ad5e135307ec4a14&nd=1)
. We recommend it served loud.

About Round Hill Music LP (the Investment Manager)

Founded in 2010, Round Hill Music LP is a fully integrated owner and operator
of music copyright properties. It currently manages 150+ catalogues, totalling
330,000+ songs with a combined value of c.US$1.2 billion.

With c.70 employees located in the major music and entertainment markets of
Nashville, New York, Los Angeles and London, Round Hill Music LP has an
experienced management and investment team with an established reputation and
extensive expertise in the music and finance industries.

 1  (#_ftnref1) Includes net recoupable advances to songwriters of US$3.8
million.

 2  (#_ftnref2) Net Publisher Share ("NPS") is the amount received by the
music publisher after deduction of all fees, commissions and all royalties and
other shares of income payable to third parties. Net Label Share ("NLS") is
the amount received by the owner of master recordings after deduction of all
fees, commissions and all royalties and other shares of income payable to
third parties.

 3  (#_ftnref3) Represents the First Investment (Round Hill Fund One excluding
the Carlin Investment) and the Carlin Investment.

 4  (#_ftnref4) Publishing income adjusted for a delay in the receipt of
royalty statements from February 2022 that were not processed until April
2022. Masters income adjusted to exclude certain one-time expenses including a
delayed royalty expense from the second half of 2022 that was processed in the
first quarter of 2023.

 5  (#_ftnref5) Includes net recoupable advances to songwriters of US$3.8
million.

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