Troubled UK music rights firm Hipgnosis sees losses triple

BELEAGUERED UK music rights owner Hipgnosis Songs Fund, whose catalogue includes the likes of Justin Bieber, Shakira and Neil Young, revealed on Thursday (Dec 21) that first-half net losses tripled on tumbling sales.

Losses after taxation soared to US$63.2 million in the six months to the end of September from US$20.1 million one year earlier, said the group.

Revenues tanked nearly one third to US$54 million. The company saw lower sales prices for music rights this year, with a US$418-million deal in September taking a 25-per cent discount in catalogue valuation.

The London-listed investment fund added on Thursday that it has sharply cut the net operating value of its assets by 9.2 per cent.

But Hipgnosis warned investors to treat its estimate with “a higher degree of caution and less certainty than might otherwise be attached to it as an accurate reflection of the fair value of the company’s assets”.

The company had delayed the results by two days owing to worries over asset valuations.

Chairman Robert Taylor expressed frustration that the group’s investment adviser Hipgnosis Song Management had not provided a clear opinion on the fair value of assets.

“On behalf of the board, I... urge the investment adviser to provide the board with their opinion as to the fair value of the company assets, without caveats, such that we can provide greater certainty and transparency to our shareholders,” Taylor added.

Hipgnosis manages more than 150 of the world’s biggest song catalogues with a combined value of over US$3 billion, according to its website.

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The fund was co-founded in 2018 by legendary guitarist and producer Nile Rodgers and Merck Mercuriadis, the former manager of Beyonce and Elton John.

HSF had announced Wednesday that it would change auditors, replacing PricewaterhouseCoopers with KPMG one day after deciding to postpone the results.

The company’s share price slid 0.6 per cent to 70.10 pence in afternoon deals on the London stock market. AFP