Kobalt Music Group revenues up 15%
Kobalt Music Group’sprofits were up 15% to US$260 million in the 12 months to June 2016, its financial posting showed.
Gross profits rose 8.4% to $30.7 million while operating losses were down 32.4% to $16.7 million from $24.7 million in FY2015.
Administration expenses were cut by 23.8% for the period, totalling $38.3 million.
Kobalt’s figures were affected by the currency exchange rate. Its CEO Willard Ahdritz said its underlying revenue growth rate of 15% was “materially suppressed by the strengthening US dollar and weakening British pound and euro”.
As a result, he said, Kobalt’s total loss for the year was up 28.6% to $30.04 million.
Similarly, loss after tax dropped 27.7% to $19.5 million in the 12 months, down from $26.9 million in FY 2015.
Kobalt has a loan facility of $20 million in place which runs until May 2017. The company reported, “The directors are in advanced negotiations with new and existing investors in order to ensure that the Group has the resources to support its plans for rapid growth.”
The group’s publishing division put in a strong performance, its $228.9 million revenue accounting for 88% of the group’s total sales.
Its neighbouring rights business generated revenue of $2 million.
According to Ahdritz, “We continued the rapid growth of our roster in Neighbouring Rights by adding, among others, Kygo, Carly Rae Jepsen, Madcon, Shakira, Aloe Blacc, Paul McCartney, Felix Jaehn, Tove Lo, Zayn Malik, Lukas Graham, Walk the Moon and Sheppard.”
Music recording posted revenues of $18.58 million (an adjusted EBITDA loss of $8.52 million). Ahdritz’s report cited Melbourne-based Courtney Barnett’s Sometimes I Sit And Think, And Sometimes I Just Sit as a key performer, alongside Pet Shop Boys’ Super and Joss Stone’s Water For Your Soul.
Last year, the record business saw a restructure with the launch of its AWAL app as part of a renewed focus on new and emerging artists who wish to retain their copyrights.
Also pulling its weight was the Kobalt investment fund, for which the group provides administration services. Its returns were also positive. The report said, “The fund has now made investments totalling over $200 million and has the capacity to make over $300 million of investments that will also support our revenue growth as we administer those rights.”
The report said, “The fund has now made investments totalling over $200 million and has the capacity to make over $300 million of investments that will also support our revenue growth as we administer those rights.”
Staff currently number 315 across five countries, up from 264 at the end of June last year. Kobalt’s Australian operation is run by Managing Director Simon Moor.
Ahdritz concluded, “We are excited and looking forward to the upcoming financial year as the market keeps growing and streaming continues to transform the industry.
“We also see positive development with big new entrants into the market that help drive demand, like Amazon’s music service using voice command via its Echo.
“The vision Kobalt had from the beginning is continuing to come true as things move forward at full speed, and we have the release of ever more new technologies and services planned.”