Hipgnosis Songs Fund Limited has released its interim results for the six-month period ending September 30, 2023. The company's operative net asset value (NAV) per share decreased by 9.2% to $1.7392, primarily due to a reduction in the fair value of the portfolio. Gross revenue from continuing operations for the period was $63.2 million, while net revenue fell to $54.0 million. Underlying net revenue, excluding certain accruals, increased by 14.0% to $65.8 million. The pro-forma annual revenue grew by 10.4% to $64.9 million. The company paid total dividends of 2.6250p per ordinary share, but dividends have been suspended for the remainder of the financial year. The total debt as of September 30, 2023, was $674.0 million, representing 32.0% of operative NAV.
The company is currently undergoing a strategic review led by the board following the rejection of the Continuation Resolution at the AGM. Shot Tower Capital, LLC has been appointed as the lead adviser to conduct due diligence on the company's assets. The investment adviser has been invited to propose alternative terms for their future investment advisory arrangements. Robert Naylor has been appointed as the non-executive director and chair of the company's board, and Francis Keeling and Christopher Mills have been appointed as non-executive directors.
The company has sold approximately 20,000 non-core songs, representing approximately 1% of the company's investment portfolio, for $23.1 million. KPMG has been appointed as the company's auditors.
Robert Naylor, Chairman of Hipgnosis Songs Fund, expressed his satisfaction with the progress made on the ongoing strategic review. However, he noted ongoing failures in the financial reporting and control process and the suspension of dividends to ensure compliance with banking covenants. Naylor also urged the investment adviser to provide the board with their opinion on the fair value of the company's assets without caveats.
A results call will be hosted by Dan Pounder, CFO of Hipgnosis Song Management, on January 4, 2023, for analysts and investors.