Round Hill Music has published its first annual report – covering the period from its incorporation through to 31 December 2021. Highlights are:
- IPO in November 2020 raising gross proceeds of $282m, followed by $46.6m in December 2020 and $86.5m in July 2021 via a C share placing.
- Deployed around $400m across 49 catalogues, consisting of 122,000 songs
- Economic NAV at the period end of US$459.7m
- Economic NAV total return for holders of ordinary shares of 17.6%
- Economic NAV total return for holders of C shares of 5.1%
- Net revenue generated $23.7m
- Total dividend per ordinary share $0.045
- As at 31 December 2021, the company had approximately $82m of cash on hand and about $60m of debt outstanding. It has made a couple of investments (spending $94.6m) since.
The company has followed the recent trend of giving investors a link to the full annual report – you can find the report here
Acquisitions were made on an average multiple of 17.9x 2018-2020 net publisher’s share, significantly below the market average multiple of 20x for similar songs. The manager says that “as the market becomes more competitive with companies vying for music publishing assets, we are striving to acquire for the group more recordings and neighbouring rights, which we feel have less competition and more growth potential than publishing. Recordings and neighbouring rights assets in the group grew 11% year-on-year in 2021, which is much higher growth than music publishing, and these assets can be bought at more favourable valuations.”
The C share pool and ordinary share pools are being merged based on their respective NAVs on 29 April and that should take effect on 11 May 2022.
The chairman says that “Given the robust global pipeline of notable artists and catalogues being considered by the investment manager, the board is considering its options to take advantage of these strong opportunities for the future benefit of shareholders”, which we translate as – there’s another fundraise in the offing soon.
RHM : Round Hill Music ready to expand again