Music Festivals PLC, which also owns the Feis Festival in London and Benicassim and Costa de Fuego events in Spain, said it has been hit by weaker than expected ticket sales.
Music Festivals admitted in an operational update that the Hop Farm Festival, in Kent, was loss-making, with artists such as Peter Gabriel, Ray Davies, Suede, Patti Smith and George Clinton failing to draw crowds, despite Glastonbury taking a break this year.
It added that Benicassim, which focuses on live indie rock, pop and electronic music acts, "continued to be profitable but at a much lower level than 2011".
"As a result, the Group currently expects to report a material loss for the year ending December 31, 2012, and is exploring ways of raising additional working capital," Music Festivals said in the update.
Staged for the first time in 2008, the Hop Farm event was nominated at the UK Festival Awards that year for Best New Festival. At the time it was a 30,000-capacity festival centered around folk and independent music, with no sponsorship or branding. Children aged under 12 are still granted free entry.
In Music Festivals' latest annual results, to December 31, 2011, the company saw pre-tax profits of £795,624 on revenues of £13m.
The shares fell 20.8pc to 9.5p on Thursday afternoon.
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