Share trading in the Music Festival Group, the Vince Power-owned promoter of summer music festivals, has been suspended as the company prepares to enter administration.

The move comes just 15 months after the company was floated on the stock market with a launch value 66.5p per share valuing the company at £10 million. By end of trading last week its shares were trading at just 2.1p, slashing the estimate of its worth to £310,000.

The collapse of the company, responsible for the Benicassim festival in Spain and the Kent-based Hop Farm festival – which was headlined this year by Bob Dylan – follows a pre-tax profit of £800,000 on turnover of £13 million in 2011 and will be seen as a body blow to the British music festival sector.

In August, one-time Mean Fiddler owner Power issued a trading warning and said it expected to make a “material loss” this year as festival attendances continued to fall in the face of the recession, the wet summer and the dampening effect on audiences of the Olympic and Paralympic games.

In a statement explaining its decision to call in administrators for the troubled company, the group said: “The board has in recent weeks pursued a number of different funding proposals but the company has not been able to procure the necessary funding it requires”.