Overview
Hipgnosis Songs Fund, the London-listed song catalog fund that owns rights to popular tracks by artists such as Shakira, Blondie, and Neil Young, has reported a significant increase in its operating pretax loss for the first half of its fiscal year. The company attributes this loss to a fall in the value of its portfolio and a decline in revenue.
Financial Performance
For the six months ended September 30, Hipgnosis Songs Fund recorded an operating pretax loss of $63.7 million, compared to a loss of $17.1 million during the same period last year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a key performance metric that eliminates exceptional and other one-off items, decreased by 36% to $39.7 million from $62.3 million. Revenue also declined, amounting to $63.2 million as opposed to $86.4 million in the previous year.
Valuation Concerns
Due to concerns surrounding the valuation of its assets, Hipgnosis Songs Fund announced on Tuesday that its accounts for the first half of fiscal 2024 would be delayed. The fund sought advice from its investment manager, Hipgnosis Song Management, for their opinion on this matter. Chairman Robert Naylor emphasized the need for transparent reporting, urging the investment adviser to provide an opinion on the fair value of the company’s assets without any caveats.
Market Impact
In response to the news, shares of Hipgnosis Songs Fund fell by 0.70 pence, or 1%, to 70 pence at 0901 GMT. Year-to-date, the company’s shares have seen a 20% decline.
