Beggars Group increased revenue to £134.48 million, but operating profit fell by more than 22 percent
LONDON – British independent record company Beggars Group ended 2025 with strong revenue growth, but also with noticeably weaker overall operating profit. According to annual accounts filed with the UK registry Companies House on August 24, 2026, the group's total annual revenue, including its share in joint ventures, rose 20 percent to £134.48 million, which, according to the average exchange rate used in industry reports, corresponds to approximately US$177 million. At the same time, total operating profit fell 22.3 percent to £8.17 million. The figures show that 2025 was a year of strong expansion in the consolidated scale of operations for Beggars, but not of equally strong growth in profitability. An important part of the explanation lies in the change in the ownership and accounting status of XL Recordings, one of the most valuable record labels within the Beggars Group system.
XL Recordings changed the way the group's results are reported
The biggest structural change occurred after Beggars Group increased its ownership stake in XL Recordings from 50 to 51 percent in October 2024. According to publicly available accounts and a report by Music Business Worldwide, Beggars paid £2.6 million for the additional one percentage point stake, while the remaining 49 percent remained owned by Richard Russell, XL's longtime head and co-owner. Because Beggars thereby acquired a majority stake, XL has since no longer been treated in the accounts as a joint venture, but as a subsidiary. As a result, XL Recordings' revenue and costs are now included in the consolidated results of Beggars Group, which significantly increased the nominal size of the business shown in the annual accounts. Companies House also lists Beggars Group in the register of persons with significant control as owning more than 50 but less than 75 percent of the shares and voting rights in XL Recordings.
This accounting change is crucial to understanding the growth. Music Business Worldwide states that Beggars Group's consolidated turnover, excluding joint ventures in which the group does not have a controlling stake, rose by as much as 51.5 percent to £113.97 million. Such a jump does not mean that all existing record-label activities grew organically at approximately the same pace. A large part of the increase results from the fact that in 2025 XL was included for the first time for a full year in the consolidated figures as a subsidiary, whereas previously it had been reported through the group's share in the result of a joint venture. That is precisely why the figure of 20 percent growth in total revenue provides a more balanced picture of the broader business shift, while consolidated growth of 51.5 percent primarily reflects the change in the scope of consolidation.
Profit moved in the opposite direction from revenue
Despite the increase in turnover, Beggars Group's total operating profit fell to £8.17 million. According to Music Week, profit for the financial year amounted to £7.72 million, compared with £9.77 million a year earlier. At the same time, a more detailed breakdown shows that the operating profit of the consolidated companies alone, excluding the results of non-controlled joint ventures, rose 22.5 percent to £9.58 million. The difference between that amount and total operating profit is related to losses attributed to joint ventures. According to an analysis of the annual accounts published by Music Business Worldwide, Beggars recorded approximately £1.42 million in total operating losses from joint ventures in 2025.
Among those items, Rough Trade Records Limited accounted for around £714,500 of losses attributable to Beggars, Matador Records Limited for around £215,200, and Matador Recordings LLC for approximately £378,300. In the previous year, XL Recordings was still a joint venture and contributed approximately £3 million in operating profit to that line, so its move into the consolidated group further complicates direct comparison between the two years. In other words, the fall in total operating profit does not reflect only weaker results from certain activities, but also the changed way in which the profits of different companies are allocated between consolidated subsidiaries and joint ventures. For investors and business observers, it is therefore more important to look at several indicators together than at a single percentage increase or decrease in isolation.
XL Recordings increased turnover, but its profitability weakened
XL Recordings, whose 2025 accounts were filed with Companies House on August 21, 2026, generated £70.76 million in revenue, 12.6 percent more than a year earlier. The label's operating profit at the same time fell 28.4 percent to £9.16 million, while profit after tax amounted to £7.82 million, compared with £10.99 million in 2024. According to data reported by Music Business Worldwide, XL released six new albums during the year, and 82 percent of its turnover was generated outside the United Kingdom. Such a geographical structure confirms the strongly international nature of the label's business, whose catalogue and current releases have a market far beyond its home country. XL is associated with releases and music rights of artists such as Adele, Radiohead and The Prodigy, while Jim Legxacy was also among its current names in 2025.
Particular attention was drawn to the profit distribution policy. According to XL Recordings' accounts, a total of £17,608,441 in dividends was paid to shareholders during 2025, or approximately $23 million according to the conversion used by Music Business Worldwide. The dividend was distributed between Beggars Group and Richard Russell in accordance with their ownership stakes. A year earlier, XL paid £10 million in dividends, so the amount in 2025 was significantly higher despite the decline in operating and net profit. Beggars Group itself, according to the same report, did not pay a dividend to its shareholders in 2025, after paying £5 million in 2024.
The portfolio of record labels remains the foundation of the business model
Beggars Group is one of the best-known independent music groups headquartered in London. Its network includes, or is linked by ownership to, XL Recordings, 4AD, Rough Trade Records, Matador Records and Young Recordings, labels operating in different segments of alternative, rock, electronic and contemporary popular music. According to publicly disclosed information, Beggars wholly owns 4AD, while it holds 50 percent stakes in both Rough Trade and Matador. The ownership structure around Young Recordings is more complex: XL Recordings holds 51 percent of Young, as well as stakes in several publishing companies associated with the group. Such an ownership network enables Beggars to combine centralized infrastructure with the separate identities of individual labels.
In 2025, record labels within the Beggars system released 30 new albums, two fewer than a year earlier, according to information from the annual report cited by Music Business Worldwide. Among commercially prominent releases, the group highlighted the album More by Pulp for Rough Trade, Double Infinity by Big Thief for 4AD, Who Is The Sky? by David Byrne for Matador, Eusexua by FKA twigs for Young, and Black British Music by Jim Legxacy for XL. Management emphasized in the report that discovering talent, developing artists and investing in original new music remain a central part of the business model. The strategy of a deliberately limited number of releases distinguishes Beggars from a market model that increasingly relies on large volumes of content and a continuous digital flow of new songs.
Employee numbers rose by almost 17 percent
The expansion of the business is also visible in employment. The average number of employees in the group increased from 169 in 2024 to 197 in 2025, an increase of approximately 16.6 percent. The growth in employee numbers coincides with the larger consolidated scale of operations following the inclusion of XL Recordings, but also with continued investment in international distribution, marketing, artist development and catalogue management. In the record industry, growth in employee numbers does not necessarily track revenue growth at the same rate, particularly for companies that manage large catalogues and streaming income, but in Beggars' case 2025 clearly also brought an expansion of organizational capacity.
At the same time, the annual accounts warn of pressure on margins. Beggars and XL stated in their reports that inflation continues to increase supply-chain costs and general operating expenses, and that this pressure inevitably affects record-label margins. This is particularly relevant for physical releases, logistics, touring and promotional activities, as well as rising labour and service costs. The fall in operating profit alongside revenue growth can therefore also be read as a signal that market growth does not automatically translate into equally rapid earnings growth. For independent companies that simultaneously finance the development of new artists and maintain global infrastructure, cost control remains one of the key business challenges.
The results come in a year of further growth for the global music industry
Beggars' results were published in the context of continued expansion of the global recorded music market. According to IFPI's Global Music Report 2026, global recorded music revenues rose 6.4 percent in 2025 and reached a record $31.7 billion, marking the eleventh consecutive year of growth. Streaming generated 69.6 percent of total global revenues, while paid subscriptions alone accounted for 52.4 percent. IFPI states that the number of users of paid streaming subscriptions reached 837 million, while subscription streaming revenue rose 8.8 percent. The United Kingdom, the world's third-largest music market according to IFPI's 2025 ranking, recorded revenue growth of 4.8 percent.
In that context, Beggars' 20 percent growth in total revenue is considerably faster than the growth of the global market, but the comparison must take into account the effect of including XL as a subsidiary. It is also notable that the physical segment grew again globally: IFPI recorded an eight percent increase in revenue from physical formats, driven in part by 13.7 percent growth in vinyl sales. This matters for independent labels with audiences that continue to buy collectible and physical releases. At the same time, the dominant role of streaming means that catalogue value, global licensing and the ability to manage rights over the long term remain key sources of revenue.
Copyright and artificial intelligence are becoming a strategic issue
Alongside financial indicators, Beggars Group's management also highlighted in the annual accounts the issue of protecting copyright and related rights in a technologically changing environment. According to a report by Music Business Worldwide, the directors stated that they are working together with the UK government and other parts of the industry to preserve the value of cultural intellectual property in the face of international technological challenges. The issue is particularly important because of the rapid development of generative artificial intelligence, new models for processing and creating music, and disputes over which data such systems are trained on and under what conditions music may be used.
IFPI also highlighted artificial intelligence, licensing and rights protection in the Global Music Report 2026 as one of the central themes for the next phase of industry development. At the same time, the organization warns about streaming fraud, namely the artificial generation of plays of fake or manipulated content in order to divert revenue. For companies such as Beggars, whose value is largely based on long-term rights to recordings and relationships with artists, the ability to protect catalogues in the digital environment is directly linked to future revenue. For that reason, the discussion about artificial intelligence is no longer limited only to creative technology, but is becoming a question of licensing, compensation and the sustainability of the business model.
The ownership change was designed to preserve independence
Even before the 2025 financial year, Beggars Group underwent an important ownership change. In October 2024, control of the group was transferred to MM Settlement Trust, a trust linked to founder and chairman Martin Mills. According to Music Week, the company explained at the time that the aim of such a structure was to preserve independence and enable continuity across future generations. The move fits into Beggars' broader strategy, under which it has for decades built a model in which individual record labels retain strong editorial identities while sharing part of the international distribution, administrative and business infrastructure.
The 2025 results show how that model can simultaneously generate substantial revenue and expose the group to variable profitability across individual labels and joint ventures. The growth of XL Recordings helped increase the overall scale of the business, but neither XL nor Beggars avoided declines in certain profit indicators. On the other hand, XL's high international exposure, the increase in employee numbers and continued investment in a relatively small number of carefully selected releases show that the group is not slowing its development strategy. Financial year 2025 therefore leaves the picture of a company that is larger than a year earlier, with even stronger control over a key part of its own portfolio, but also with clear pressure on margins.
For Beggars Group, the next period will be important precisely because of the need to separate the accounting effect of consolidation from actual organic growth. After a full year in which XL is treated as a subsidiary, future comparisons should be cleaner and show how much revenue comes from growth in the existing catalogue and new releases, and how much from changes in the group's structure. In the meantime, the official accounts confirm two parallel facts: Beggars reached a record higher scale of revenue in 2025, while total operating profit fell. It is precisely this combination that best describes a year in which one of the most influential independent music groups further strengthened its control over XL Recordings, but at the same time felt the cost and profit pressures of the wider industry.
Sources:
- Companies House – annual accounts and filing history of Beggars Group Limited for 2025 (link)
- Companies House – annual accounts, ownership records and filing history of XL Recordings Limited for 2025 (link)
- Music Business Worldwide – analysis of Beggars Group and XL Recordings results, ownership changes, dividends and joint-venture data (link)
- Music Week – reports on Beggars Group and XL Recordings results for 2025 and the change in ownership structure (link)
- IFPI – Global Music Report 2026, data on global recorded music revenues, streaming and market growth in 2025 (link)