Hipgnosis Songs delays publication of half-year results over valuation concerns

investmentweek.co.uk:

Hipgnosis Songs said it expects to publish the interim results by the end of December 2023. If it does not, it faces the risk of share suspension.

In a stock exchange notice, the board said the valuation the trust  received from its independent valuer is «materially higher» than the valuation implied by proposed and recent transactions in the sector.

In particular, it noted the proposed sale of assets to Hipgnosis Songs Capital for $417.5m, which reflected a discount of 24.3% to the valuation of these assets as at 31 March 2023. 

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It also highlighted the recent sale of non-core assets of $23.1m, which reflected a 14.2% discount to to the valuation of these assets as at 30 September 2023.

Having taken advice from the trust's investment adviser, Hipgnosis Song Management, on their opinion on the independent valuer's valuation, the board said the adviser «eventually» provided an opinion.

However, the board said it was «heavily caveated», such that it has «concerns» as to the valuation of the trust's assets in its interim results. Hipgnosis Songs said it expects to publish the interim results by the end of December 2023. If it does not, it faces the risk of share suspension.

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In a research note, Peel Hunt analyst Anthony Leatham said the firm's read on this is that the board has lost confidence in the independent valuer's assessment.

«There is also specific wording around the board's interaction with the investment adviser who „eventually“ provided a „heavily caveated“ opinion,» he said.

«With such a wide spread of outcomes between proposed sale prices and proposed