TIDMPWS
RNS Number : 4598H
Pinewood Group PLC
01 December 2015
Pinewood Group plc
Interim Results for the six months ended 30 September 2015
Pinewood Group plc ("the Company"), the world leading studio and
production services operator, maintained the positive momentum
reported at full year and is operating its studios at near capacity
as demand continues for its offer to the screen-based
industries.
Strategic progress
-- Raised GBP30m through the issue of 8,000,000 new ordinary shares
-- New banking facilities of up to GBP135m
-- Phase one of the Pinewood Studios Development Framework
("PSDF") to be completed by June 2016 within budget
-- Pinewood Atlanta Studios Phase 2 development completed
-- Full ownership of Shepperton Studios with review of existing masterplan underway
-- Development of full service production company in the Republic of Ireland
-- Completion of Phase One consultancy to Shanghai Film Group
-- M T Rainey appointed to the Board
-- Search process underway for additional independent Non-Executive Director
Financial highlights
Six months Six months
ended ended Year
30 September 30 September On Year
2015 2014 comparison
-------------------------- -------------- -------------- ------------
Group Revenue GBP38.2m GBP38.5m -0.7%
-------------------------- -------------- -------------- ------------
Media Services Revenue GBP32.5m GBP27.0m +20.4%
-------------------------- -------------- -------------- ------------
Group Operating Profit GBP7.0m GBP2.5m +186.9%
-------------------------- -------------- -------------- ------------
Media Services Operating
Profit GBP8.3m GBP6.1m +36.6%
-------------------------- -------------- -------------- ------------
Profit after tax GBP4.3m GBP3.8m +13.2%
-------------------------- -------------- -------------- ------------
Basic EPS* 7.6p 7.7p -1.3%
-------------------------- -------------- -------------- ------------
Normalised EPS* 9.0p 7.7p +16.9%
-------------------------- -------------- -------------- ------------
Dividend per share 0.8p 0.7p +14.3%
-------------------------- -------------- -------------- ------------
Net debt GBP55.8m GBP31.8m +75.8%
-------------------------- -------------- -------------- ------------
Media Services ROCE 10.2% 9.3% +9.7%
-------------------------- -------------- -------------- ------------
*Basic and Normalised EPS based on weighted average number of
shares of 56.7m for the six month period ended 30 September 2015
(six months ended 30 September 2014: 49.4m)
Commenting on today's results, Ivan Dunleavy, Chief Executive,
said:
"The first six months of the year have maintained the positive
momentum reported in our full year results in June 2015.
Productions based at the studios during the period include the
year's biggest films SPECTRE and Star Wars: Episode VII - The Force
Awakens. Media Investment deal flow on behalf of third party
clients remains weighted to the balance of the year.
The construction of phase one of the Pinewood expansion,
designed to meet strong demand, is on schedule for completion in
June 2016 and is within budget. Having taken full ownership of
Shepperton Studios in the previous financial year, 100% of these
earnings now accrue to the Company and we are able to review the
existing masterplan for development of this facility.
The positive results reported today have continued into the
second half and we are encouraged by the visibility we have for the
remainder of the year and into 2016".
Enquiries
Pinewood Group plc +44 (0)1753 656732
Andrew M. Smith
Corporate Affairs Director and Company Secretary
Peel Hunt LLP +44 (0)207 418 8900
Edward Knight / Euan Brown
Notes to editors
-- Pinewood Group plc is Europe's largest provider of stage and studio space
-- Pinewood Studios, Shepperton Studios and Pinewood Studio
Wales together accommodate 37 stages and three dedicated digital
television studios
-- Pinewood Studios is home to Europe's leading studio-based
underwater filming stage, as well as one of the largest exterior
water tanks in Europe
-- The Group now offers financing to UK film, television and
video game production as part of its growing range of services
-- Pinewood Studios and Shepperton Studios have been home to
over 2,000 films in more than 80 years
-- Pinewood Studios and Shepperton Studios have hosted over 800 TV shows
-- There are approximately 260 independent, media related
companies based within the Pinewood, Shepperton and Wales Media
Hubs
-- The Pinewood Group's international network of studios
includes Toronto, Canada; Iskandar, Malaysia; the Dominican
Republic; Atlanta, Georgia, USA; and activities in China and
Ireland
Forward looking statements
This announcement includes forward looking statements that are
based on current expectations and assumptions. They involve risks
and uncertainties and may differ, possibly materially, from actual
results, performance and achievement. Neither the Company, nor any
of its Directors, undertakes any obligation to update publicly or
revise forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
legally required.
For more information
www.pinewoodgroup.com
Neither the content of the Company's website nor the content of
any website accessible from hyperlinks on the Company's website,
nor any other website, is incorporated into, or forms part of this
announcement nor, unless previously published by means of a
recognised information service, should any such content be relied
upon in reaching a decision as to whether or not to acquire,
continue to hold, or dispose of, securities in the Company.
Business model
Pinewood Group plc is a leading provider of studio and related
services to the global screen-based industries. Our services
support film production, filmed television and studio television
recording, digital content services and the provision of facilities
to media related business ("Media Hub").
The Group has a powerful set of competitive differentiators: its
acknowledged industry leadership in providing these services over
an 79 year history; the power of its brand in international markets
and the full service offering to its clients.
The Company currently has two reporting segments - Media
Services, which provides studio and related services to the
screen-based industries; and Media Investment, which provides
investment funding and production services to the screen-based
industries.
The Media Services segment has principally three complementary
operating streams - Film; Television; and Media Hub.
Within Film, operations are further divided into Stage and
Ancillary, which provides production facilities to clients, Digital
Content Services ("DCS") and International.
DCS offers picture and sound post production, media storage and
management and distribution for original English language and
internationally re-versioned content.
International operations, which leverage the Pinewood brand,
include providing international sales, marketing, studio
development and consultancy services in Canada, China, the
Dominican Republic and Malaysia and a joint venture in the United
States of America.
The Company's television ("TV") business provides a range of TV
production facilities, often utilising its stages and DCS offerings
to host and service large 'event' television productions. The
television offering consists of a comprehensive range of production
facilities such as high definition TV studios, film stages and post
production services to support all forms of television
production.
The Media Hub is currently home to 260 independent businesses
representing and providing expertise, equipment and support to the
film, television, games, advertising and photographic industries.
These companies come together to form a unique cluster and centre
of excellence for the entire creative industry.
The Media Investment segment (trading as "Pinewood Pictures")
includes an agreement to source and advise on film, high-end
television and video game investment opportunities for two media
development funds; a GBP25m fund established by the Isle of Man
Treasury and a GBP30m fund established by the Welsh Government. In
addition, the segment involves identification and investment by the
Group in British qualifying film and television productions.
Objectives and Strategy
The Group's mission is to:
-- Continue to be the leading global destination for the production of film;
-- Become the leading UK destination for the production of television, games and digital media;
-- Leverage our brand heritage through international operations;
-- Leverage our brand heritage through diversified services and markets;
-- Exceed our customers' expectations through our commitment to
professionalism, quality of service and offering sustainable
advantage; and
-- Increase value for all our stakeholders.
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
Targeted strategic plans to achieve this mission include:
-- Operational growth:
-- Increase capacity through expansion of existing stage and studio facilities and services;
-- Investment in digital activities and technology; and
-- Increased media and content investment activity.
-- Property development:
-- Plan to increase overall capacity; and
-- Demand-led Media Hub expansion to limit speculative risk.
-- Leveraging the brand:
-- Selective growth through joint ventures with limited capital commitment;
-- Lower risk investment in screen content; and
-- Provision of investment advice to third party 'content' funds.
Key Performance Indicators
The Board uses a number of key performance indicators ("KPIs")
to monitor the Company's performance, as well as to measure
progress against the Company's objectives.
The KPIs used to measure performance, and which are discussed in
further detail below for the year, are:
Six months ended Year
Six months ended 30 September 2014 ended
30 September 31 March
2015 2015
--------------------------------------------------------------- ----------------- ------------------- ----------
Media Services
--------------------------------------------------------------- ----------------- ------------------- ----------
Revenue (including inter-segment) GBP32.5m GBP27.0m GBP57.2m
--------------------------------------------------------------- ----------------- ------------------- ----------
Operating profit before exceptional items GBP8.3m GBP6.1m GBP11.0m
--------------------------------------------------------------- ----------------- ------------------- ----------
EBITDA* GBP12.6m GBP9.2m GBP17.5m
--------------------------------------------------------------- ----------------- ------------------- ----------
Return on capital employed 10.2% 9.3% 10.1%
---------------------------------------------------------------- ----------------- ------------------- ----------
Stage occupancy 87% 86% 80%
---------------------------------------------------------------- ----------------- ------------------- ----------
Media Hub occupancy (as a % of net lettable area) 95% 97% 97%
---------------------------------------------------------------- ----------------- ------------------- ----------
Media Investment
--------------------------------------------------------------- ----------------- ------------------- ----------
Number of active Film Production Companies during the year 3 7 7
---------------------------------------------------------------- ----------------- ------------------- ----------
Loss after tax (GBP0.1m) (GBP0.3m) (GBP0.1m)
--------------------------------------------------------------- ----------------- ------------------- ----------
Film finance funding invested by the Group GBP1.0m GBP1.0m GBP1.0m
--------------------------------------------------------------- ----------------- ------------------- ----------
Film finance funding from third party funds GBP3.4m GBP6.4m GBP6.4m
--------------------------------------------------------------- ----------------- ------------------- ----------
Group performance
--------------------------------------------------------------- ----------------- ------------------- ----------
Profit after tax GBP4.3m GBP3.8m GBP8.1m
--------------------------------------------------------------- ----------------- ------------------- ----------
Earnings per share adjusted for exceptional items and fair
value movements ("Normalised EPS") 9.0p 7.7p 13.5p
---------------------------------------------------------------- ----------------- ------------------- ----------
Unrestricted cash generated from operations (see note 13) GBP6.7m GBP11.5m GBP20.5m
---------------------------------------------------------------- ----------------- ------------------- ----------
Net debt GBP55.8m GBP31.8m GBP71.9m
---------------------------------------------------------------- ----------------- ------------------- ----------
* Media Services EBITDA is derived by adding back depreciation
and amortisation to operating profit before exceptional items
The Board believes the current suite of KPIs provide an
appropriate measure of the Company's performance. However, as the
business continues to implement its objectives and strategic plans,
the Board recognises the business will become more complex and will
continue to assess the adequacy and appropriateness of the KPIs
listed above.
Media Services review
Total revenues within this segment were GBP32.5m for the period
(six months ended 30 September 2014: GBP27.0m), including GBP0.2m
of intersegment revenue (six months ended 30 September 2014:
GBP0.6m). Inter-segment revenues relate to revenue generated from
the utilisation of the Company's core services by the Group's
wholly owned Film Production Companies.
Film
Film revenues for the period were GBP26.8m (six months ended 30
September 2014: GBP22.5m), an increase year on year of 19%. The
increase is due to high stage utilisation across existing
facilities.
The demand for the Company's facilities throughout the period
continued to be strong, as reflected in stage occupancy of 87% (six
months ended 30 September 2014: 86%).
The largest film production based at Pinewood Studios during the
period was the 24(th) James Bond film, SPECTRE (Eon/MGM) and the
largest production at Shepperton Studios was Beauty and the Beast
(Disney).
Other major productions which were based at Pinewood and
Shepperton during the period include the Star Wars spin off, Rogue
One (Lucasfilm), Star Wars Episode VIII (Lucasfilm), The Huntsman
(Universal) and Me Before You (MGM).
DCS revenues included within the total film revenue for the
period have increased by 33% over the prior period at GBP4.8m (six
months ended 30 September 2014: GBP3.6m).
Notable sound post production work completed during the period
included Spooks: The Greater Good (Shine Production/Kudos/Pinewood
Pictures), Everest (Working Title), Steve Jobs (Universal Pictures)
and Brooklyn (Wildgaze Productions).
DCS continues to enhance its offering to the growing number of
feature films choosing to shoot with digital camera technology and
television productions wishing to work in a digital file based
environment at the Studios.
Games audio services include internationally recognised foley
recording and editing; custom sound design; localisation in over 40
languages and a casting database of 4000 character voices.
Pinewood Digital have completed works on Avengers: Age of Ultron
(Marvel), Ex Machina (DNA) and Pride and Prejudice and Zombies
(Cross Creek Pictures).
The Company was a finalist in the Service Provider - Best Audio
Supplier category at the TIGA Games Industry Awards 2014,
reflecting the Group's growing reputation in the gaming content
development industry.
Pinewood Creative was launched in September 2014 at Pinewood
Studios, and has developed from the original Studio Woodmill to now
offer a full range of creative services. As well as an upgraded
mill facility these additional services include a full range of 3D
design, model making, set building and fit out services.
Pinewood entered into a profit sharing agreement with Jewson in
January 2015, to be the preferred supplier of products to Pinewood
and Shepperton for an initial period of five years.
Pinewood Group entered into a joint venture with MBS Equipment
on 1 January 2015 known as Pinewood MBS Lighting Limited ("PMBS").
PMBS is the exclusive lighting provider to productions based at
Pinewood Studios and Shepperton Studios.
The Pinewood Creative, Jewson and PMBS initiatives are examples
of the Group expanding its revenue generating capacity and
leveraging its brand.
Pinewood Studio Wales
In January 2015, Pinewood Studio Wales opened. In this initial
period of operation the Company has worked hard to establish the
studio's market position and the Company believes this will allow
the studio to become more effective in the longer term. As a
result, the studio has only hosted 3 productions to date but is now
home to 14 tenant companies and is targeting film and high-end TV
drama productions to utilise the facility.
International
International revenues for the period included within film were
GBP1.4m (six months ended 30 September 2014: GBP1.8m) and relate to
sales and marketing agreements in Toronto, Malaysia and Dominican
Republic, the Pinewood Atlanta Studios plus consultancy services
provided in China.
Pinewood Atlanta Studios
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
Pinewood Atlanta Studios now has 218,000 sq ft of sound stages
and 300,000 sq ft of production facility accommodation and
production workshops following the completion of the Phase 2 of
development in June 2015. Demand for the studios has been good with
productions from Marvel and Sony occupying facilities during the
six month period to 30 September 2015.
China
China's box office growth is projected to pull ever nearer to
the US and exceed it by 2020. There are 100 new screens being built
every week - yet the country remains under-screened. The growth in
the market and the recently signed China-UK Co-Production Treaty
provides the Company with a number of opportunities which it is
actively assessing. Currently, the Company provides consultancy
services to a number of leading Chinese film industry companies.
During the period, the Company continued to provide advice on the
design and construction of the Qingdao Oriental Movie Metropolis, a
film facility comprising 45 stages for the Wanda Group.
Construction on Phase One commenced in 2015 with the studio complex
scheduled to open in 2017. In addition, the Company completed the
first phase of consultancy advice to the Shanghai Film Group on its
studio facilities in Chidden. Active discussions about
co-productions are currently taking place.
Television
Television ("TV") revenues for the period were GBP1.9m (six
months ended 30 September 2014: GBP1.7m). The Group's TV studios
have hosted new productions including the innovative and
technically challenging shows, Dino Autopsy (Impossible Factual)
and The Alternative Election (Zeppotron), the latter of which
involved an 8 hour live broadcast from the Pinewood TV studios.
Returning productions including Through the Keyhole (Talkback),
Would I Lie To You? (Zeppotron), 15 to 1 (Remedy) and Duck Quacks
Don't Echo (Magnum) have all utilised the Group's digital HD TV
studios during the period.
The Group has also accommodated the BBC Dramas W1A, Stag and
Cuckoo and the large light entertainment show Bring The Noise
(Twentythree 06) on Pinewood's multi-use stages.
The Television market remains buoyant. Light entertainment
continues to dominate the schedule of traditional Broadcasters. The
newer pay-on-demand platforms continue the drive to create high-end
television productions, and are motivated to film in the UK by the
UK High-End TV tax credit. During the period the Company has not
accommodated any high end television productions at its Pinewood
and Shepperton sites, as these have focussed on film activity.
Media Hub
Media Hub revenues inclusive of service, utility and facility
charges for the period were GBP3.8m (six months ending 30 September
2014: GBP2.8m). The increase is predominantly due to Shepperton
Media Hub revenues of GBP0.6m now being consolidated in revenue
throughout the period as a result of the Group acquiring 100%
ownership of the Shepperton Studios Property Partnership ("SSPP")
in December 2014.
The total number of Media Hub companies accommodated at the end
of the period was 260 at Pinewood Studios, Shepperton Studios and
Pinewood Studio Wales with occupancy of 95% across a net lettable
area of 377,000 sq ft (six months ended 30 September 2014: 241
companies, 97% occupancy, 362,000 sq ft).
Gross and operating margins
The Media Services segment gross margin, excluding intersegment
revenues, for the six months ended 30 September 2015 is 43.2% (six
months ended 30 September 2014: 41.9%). The year on year variance
is principally driven by the acquisition of 100% ownership of
SSPP.
The Media Services operating margin is 25.8% (six months ended
30 September 2014: 23.1%). The increase in operating margin is
again due to the acquisition of SSPP.
Return on capital employed
The Company measures return on capital employed ("ROCE") for the
Media Services segment by reference to annualised operating profit
before exceptional items, including intersegment profit and share
of results of joint ventures, as a percentage of average capital
employed, being total equity plus interest bearing loans and
borrowings. ROCE for the twelve months ended 30 September 2015 was
10.2% (twelve months ended 30 September 2014: 9.3%).
The PSDF is a capital intensive project with significant
long-term infrastructure spend front-loaded. Capital employed at 30
September 2015 includes GBP24.5m of assets in the course of
construction and land of GBP5.3m relating to this project,
totalling GBP29.8m (30 September 2014: GBP9.5m) which are not yet
revenue generating, and are not expected to be so until the year
ending 31 March 2017. Excluding these assets from average capital
employed gives a ROCE of 11.7% for the 12 months ended 30 September
2015 and 10.9% for the prior period.
Media Investment review
Segment revenue for the period was GBP6.0m (six months ended 30
September 2014: GBP12.1m). Due to the timing of deal flow, the
Company has only had 3 live FPCs in the period (six months ended 30
September 2014: 7) and as a result revenue from FPCs is GBP5.0m
(six months ended 30 September 2014: GBP11.6m).
Investment advisory
Investment advisory revenue for the period was GBP0.4m (six
months ended 30 September 2014: GBP0.4m).
The Company continues to advise on funds totalling GBP55m,
across film and television production and game development and
publishing. During the period, Pinewood Pictures has advised on
funding by the Welsh Government for feature films Don't Knock Twice
(from Welsh company Red and Black Films) and Their Finest Hour and
a Half (a Lone Scherfig film, produced by Amanda Posey and Stephen
Woolley); and on funding by the Isle of Man Treasury of four
massively multiplayer online games, to be published by new
publisher Gamesco and feature film Mindhorn (from Scott Free).
During the period Pinewood Pictures distributed the feature
films Spooks: The Greater Good and Pressure.
In addition to investments made by these third party funds, the
Group also provided film finance totalling GBP0.85m to its
wholly-owned subsidiary Film Production Companies ("FPCs") (six
months ended 30 September 2014: GBP1.0m) and GBP0.15m to third
party FPCs (six months ended 30 September 2014: GBPNil).
Film production companies
Revenue from FPCs for the period totalled GBP5.0m (six months
ended 30 September 2014: GBP11.6m). An FPC is considered active
from the close of film financing until the production is completed
and delivered.
Included within FPC revenue is revenue relating to Star Wars
Episode VIII (Lucasfilm). The Company provided production services
during the period through its wholly owned subsidiary Space Bear IR
DAC, a company based in Ireland.
Kill Your Friends, produced by the Group in 2014 featured at the
Toronto International Film Festival.
The operating loss from FPC activity of GBP1.1m (six months
ended 30 September 2014: GBP2.8m) as expected is largely offset by
UK Film tax relief of GBP1.0m (six months ended 30 September 2014:
GBP2.6m).
Included in the Group cash balance (excluding overdraft) is
GBP1.8m of amounts restricted solely for use in the production of
specific FPC operations (six months ended 30 September 2014:
GBP4.3m).
The decrease year on year on the FPC-related balances is largely
due to the timing of active FPCs and movement in restricted
cash.
Loss after tax
Results for the Media Investment segment are more meaningfully
reviewed at the after tax level.
At the after tax level, the loss after tax for the segment is
GBP0.1m for the period (six months ended 30 September 2014: GBP0.3m
loss) due to an increase in other income and commissions.
Group performance
Total consolidated revenue for the period is GBP38.2m (six
months ended 30 September 2014 restated: GBP38.5m). Due to the
timing of deal flow in Media Investment, the Company has only had 3
live FPCs in the period (six months ended 30 September 2014: 7) and
as a result revenue from FPCs is GBP5.0m (six months ended 30
September 2014: GBP11.6m).
Profit after tax for the period ended 30 September 2015 was
GBP4.3m (six months ended 30 September 2014: GBP3.8m). The FPC loss
before tax is largely offset by the UK Film Tax relief and
therefore the revenue movement noted above has not impacted Group
profits. The year on year growth is due to increased film activity
in Media Services and a reduced loss in Media Investment.
Basic and diluted earnings per share for the period were 7.6p
based on a weighted average share capital of 56,666,757 shares (six
months ended 30 September 2014: 7.7p). Normalised basic and diluted
earnings per share for the period were 9.0p (six months ended 30
September 2014: 7.7p).
EBITDA (earnings before exceptional items, interest, tax,
depreciation and amortisation) for the period was GBP11.3m (six
months ended 30 September 2014: GBP5.6m), including GBP1.3m of
Media Investment loss (six months ended 30 September 2014: GBP3.6m
loss).
Taxation
The total corporation tax charge for the period, based on profit
before tax of GBP4.4m, was GBP0.1m (six months ended 30 September
2014: GBP2.0m credit).
The Group qualified for an aggregate film tax credit of GBP1.0m
(six months ended 30 September 2014: GBP2.6m) on the expenditure
from the FPCs that are Group subsidiaries.
The underlying rate of tax on profit before accounting for UK
film tax relief from FPCs is 24% (six months ended 30 September
2014: 21%).
Liquidity management
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
The Company's cash balance (including restricted cash of
GBP1.8m) decreased by GBP7.5m during the period, which includes a
GBP1.2m increase relating to FPC activity that is not available for
general business operations. The main drivers of this decrease are
the Company's investing activities during the period, principally
in relation to the PSDF phase one development, and movements in
working capital. A working capital outflow in the period of GBP6.3m
(six months ended 30 September 2014: GBP8.9m inflow) includes an
outflow of GBP0.6m relating to FPC restricted cash (six months
ended 30 September 2014: GBP5.7m inflow). An outflow from Media
Services deferred income of GBP1.8m, an outflow from VAT and
payroll taxes due to timing differences of GBP2.0m (most
significantly relating to PSDF invoice payments and LTIP costs),
and the prepayment of rent, rates and insurance costs of GBP1m are
the principal contributors to the working capital outflow in the
period.
Capital expenditure has increased from GBP2.4m in the
comparative six month period to GBP15.9m principally due to the
PSDF development.
As a result of the share placing on 17 April 2015, the
cancellation of existing bank facilities and the inflow from new
banking facilities agreed on 6 March 2015, cash inflow from
financing activities in the period was GBP4.8m (six months ended 30
September 2014: GBP0.8m).
The movements in the Company's cash position has had an impact
on net debt and gearing. At 30 September 2015 net debt was GBP55.8m
although this included GBP1.8m of restricted FPC cash. Excluding
this amount, net debt was GBP57.6m (30 September 2014: GBP31.8m
including FPC cash; GBP36.1m excluding FPC cash). Gearing has
decreased from 78.6% at 31 March 2015 to 43.0% at 30 September
2015, excluding fair value and loan issue costs principally due to
the cash inflow from financing activities.
Interest rate risk is the risk that the fair value or future
values of a financial instrument will fluctuate because of changes
in market interest rates. The Company's exposure to the risk of
changes in market interest rates relates primarily to the Company's
long term debt obligations with floating interest rates. In order
to manage its interest rate risk the Company's policy is to have at
least 50% (31 March 2014: 50%) of its borrowings at fixed rates of
interest. To offset this, the Company enters into interest rate
swaps, in which the Company agrees to exchange, at specific
intervals, the difference between fixed and variable rate interest
amounts calculated by reference to an agreed-upon notional
principle amount.
At 30 September 2015, the Group had the following interest rate
swaps in place to minimise the volatility in cash flows from a
change in LIBOR:
30 31
September 30 March
Effective interest rate % Maturity 2015 September 2014 2015
GBP000 GBP000 GBP000
------------------- --------------------------- ------------------ ----------- ---------------- -------
Hedges in effect:
------------------------------------------------ ------------------ ----------- ---------------- -------
Cash flow hedge 0.69% + variable margin 4 January 2016 17,500 - 17,500
------------------- --------------------------- ------------------ ----------- ---------------- -------
Cash flow hedge 1.33% + variable margin 1 July 2016 7,500 7,500 7,500
------------------- --------------------------- ------------------ ----------- ---------------- -------
Cash flow hedge 1.66% + variable margin 28 November 2016 7,500 15,000 15,000
------------------- --------------------------- ------------------ ----------- ---------------- -------
32,500 22,500 40,000
------------------------------------------------------------------ ----------- ---------------- -------
Forward dated hedges:
------------------------------------------------ ------------------ ----------- ---------------- -------
Cash flow hedge* 2.08% + variable margin 30 April 2022 25,000 - -
------------------- --------------------------- ------------------ ----------- ---------------- -------
Cash flow hedge** 1.9975% + variable margin 30 April 2025 25,000 - -
------------------- --------------------------- ------------------ ----------- ---------------- -------
50,000 - -
------------------------------------------------------------------ ----------- ---------------- -------
* Cash flow hedge commences on 1 July 2016 but fair value
recognised at 30 September 2015.
** Cash flow hedge commences on 1 January 2016 but fair value
recognised at 30 September 2015.
The interest swap finance costs are charged to the Group income
statement as payable on a quarterly basis in March, June, September
and December. Any change in the fair value is recognised in the
income statement.
Net finance costs for the period were GBP3.2m (six months ended
30 September 2014: GBP1.2m) which included fair value movements on
cash flow hedge of GBP1.0m (six months ended 30 September 2014:
GBPNil).
Dividend
The Board is committed to pay dividends in line with its
dividend policy of not less than three times cover and as a result
the Board has declared an interim dividend of 0.8p (six months
ended 30 September 2014: 0.7p).
The dividend is to be paid on 8 February 2016 to shareholders on
the register at close of business on 8 January 2016 (ex-dividend
date of 7 January 2016).
Share issuance
On 17 April 2015 the Company raised GBP30m (before expenses of
GBP1.2m) by way of a placing of 8,000,000 new ordinary shares at a
price of 375 pence per new ordinary share. As a consequence of the
new share issue GBP1.2m of costs have been charged to the share
premium account.
Going concern
Having considered the performance of the Group for the period to
30 September 2015 above and future developments, the Directors have
a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. Thus,
they continue to adopt the going concern basis of accounting in
preparing the financial statements.
The Group has primary banking facilities in place until 30 April
2019. Although the Group is in a net current liability position of
GBP20.8m, principally driven by the deferred income balance which
arises as a result of the Group's billing profile on major
contracts, the Group has GBP81.5m of undrawn committed loan
facilities in place. The Group also has GBP9.4m of asset financing
facility available to be drawn upon including GBP1.6m of a
pre-approved facility. The Directors are confident these undrawn
debt facilities provide sufficient headroom to support continued
trading.
The Directors have specifically considered the level of capital
commitment at 30 September 2015 and the projected spend on the PSDF
compared with the financing facilities that have been put in place
during the period.
The Group also has a strong brand and reputation in the
marketplace with a growing number of customers and suppliers in the
film and television industry. As a consequence, the Directors
believe that the Group is well placed to manage its business risks
and operations successfully.
Future Developments
The first six months of the year have maintained the positive
momentum reported in the Company's full year results in June 2015.
Productions based at the studios during the period include the
year's biggest films SPECTRE and Star Wars: Episode VII - The Force
Awakens. Media Investment deal flow on behalf of third party
clients remains weighted to the balance of the year.
The construction of phase one of the Pinewood expansion,
designed to meet strong demand, is on schedule for completion in
June 2016 and is within budget. Having taken full ownership of
Shepperton Studios in the previous financial year, 100% of these
earnings now accrue to the Company and the Company is able to
review the existing masterplan for development of this
facility.
The positive results reported today have continued into the
second half and the Company is encouraged by the visibility it has
for the remainder of the year and into 2016.
INDEPENDENT REVIEW REPORT TO PINEWOOD GROUP PLC
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2015 which comprises the condensed
Group income statement, the condensed Group statement of other
comprehensive income, the condensed Group statement of financial
position, the condensed Group statement of cash flows, the
condensed Group reconciliation of movement in net debt, the
condensed Group statement of changes in equity and the related
notes 1 to 18. We have read the other information contained in the
half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules of the London Stock Exchange.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2015 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the AIM Rules of the London Stock
Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Manchester, United Kingdom
30 November 2015
Condensed Group income statement for the six months ended 30
September 2015
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
Note GBP000 GBP000 GBP000
-------------------------------------------------------------- ----- -------------- --------------
Revenue - continuing
operations 3 38,246 38,506 75,002
-------------------------------------------------------------- ----- -------------- -------------- ----------
Cost of sales (24,632) (29,757) (58,027)
-------------------------------------------------------------- ----- -------------- -------------- ----------
Gross profit 13,614 8,749 16,975
-------------------------------------------------------------- ----- -------------- -------------- ----------
Selling and distribution
expenses (907) (753) (2,036)
-------------------------------------------------------------- ----- -------------- -------------- ----------
Administrative expenses (5,673) (5,563) (9,222)
-------------------------------------------------------------- ----- -------------- -------------- ----------
Profit on disposal
of property, plant
and equipment - 19 41
-------------------------------------------------------------- ----- -------------- -------------- ----------
Operating profit 7,034 2,452 5,758
-------------------------------------------------------------- ----- -------------- -------------- ----------
Comprising:
-------------------------------------------------------------- ----- -------------- -------------- ----------
* Operating profit from Media Services activities 8,324 6,094 11,043
-------------------------------------------------------------- ----- -------------- -------------- ----------
* Operating loss from Media Investment in respect of
Film Production Companies (1,114) (2,808) (4,328)
-------------------------------------------------------------- ----- -------------- -------------- ----------
* Operating loss from other Media Investment activities (176) (834) (957)
-------------------------------------------------------------- ----- -------------- -------------- ----------
7,034 2,452 5,758
-------------------------------------------------------------- ----- -------------- -------------- ----------
Exceptional income - - 1,952
-------------------------------------------------------------- ----- -------------- -------------- ----------
Share of results of
joint ventures 4 575 510 1,149
-------------------------------------------------------------- ----- -------------- -------------- ----------
Finance costs (3,162) (1,204) (3,890)
-------------------------------------------------------------- ----- -------------- -------------- ----------
Profit before tax 4,447 1,758 4,969
-------------------------------------------------------------- ----- -------------- -------------- ----------
Current tax expense (1,188) (1,199) (1,814)
-------------------------------------------------------------- ----- -------------- -------------- ----------
UK Film Tax Relief
from Film Production
Companies 1,011 2,571 4,062
-------------------------------------------------------------- ----- -------------- -------------- ----------
Deferred tax credit 30 668 879
-------------------------------------------------------------- ----- -------------- -------------- ----------
Total tax (charge)/credit 6 (147) 2,040 3,127
-------------------------------------------------------------- ----- -------------- -------------- ----------
Profit for the period/year 4,300 3,798 8,096
-------------------------------------------------------------- ----- -------------- -------------- ----------
Attributable to:
-------------------------------------------------------------- ----- -------------- -------------- ----------
Equity holders of the
parent 4,300 3,798 8,096
-------------------------------------------------------------- ----- -------------- -------------- ----------
Earnings per share:
-------------------------------------------------------------- ----- -------------- -------------- ----------
Basic and diluted result
for the period/year 7 7.6p 7.7p 16.4p
-------------------------------------------------------------- ----- -------------- -------------- ----------
Condensed Group statement of other comprehensive income
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
for the six months ended 30 September 2015
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
------------------------------ -------------- -------------- ----------
Profit for the period/year 4,300 3,798 8,096
------------------------------ -------------- -------------- ----------
Other comprehensive income
for the period/year, net
of tax - - -
------------------------------ -------------- -------------- ----------
Total comprehensive income
for the period/year, net
of tax 4,300 3,798 8,096
Attributable to:
------------------------------ -------------- -------------- ----------
Equity holders of the parent 4,300 3,798 8,096
------------------------------ -------------- -------------- ----------
Condensed Group statement of financial position as at 30
September 2015
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
Note GBP000 GBP000 GBP000
-----
Assets
------------------------------ ----- ------------- ------------- ---------
Non-current assets
---------
Property, plant and
equipment 9 181,775 117,770 165,398
------------------------------ ----- ------------- ------------- ---------
Investment property 5,730 5,862 5,796
---------
Intangible assets 10 5,604 5,604 5,604
---------
Long-term assets 249 603 510
------------------------------ ----- ------------- ------------- ---------
Investment in joint
ventures 6,196 9,074 4,026
------------------------------ ----- ------------- ------------- ---------
Deferred tax asset 149 - 119
------------------------------ ----- ------------- ------------- ---------
199,703 138,913 181,453
------------------------------ ----- ------------- ------------- ---------
Current assets
---------
Inventories 50 261 50
------------------------------ ----- ------------- ------------- ---------
Trade receivables 11 8,008 12,327 5,690
Prepayments and other
receivables 12 5,494 7,003 6,912
------------------------------ ----- ------------- ------------- ---------
Cash 13 1,784 8,483 6,357
------------------------------ ----- ------------- ------------- ---------
15,336 28,074 19,009
------------------------------ ----- ------------- ------------- ---------
Total assets 215,039 166,987 200,462
------------------------------ ----- ------------- ------------- ---------
Equity and liabilities
Equity attributable
to equity holders of
parent
------------------------------ ----- ------------- -------------
Share capital 8 5,741 4,941 4,941
---------
Share premium 8 76,696 48,718 48,718
------------------------------ ----- ------------- ------------- ---------
Capital redemption reserve 8 135 135 135
---------
Merger reserve 8 348 348 348
------------------------------ ----- ------------- ------------- ---------
Retained earnings 40,074 33,429 37,381
------------------------------ ----- ------------- ------------- ---------
Total equity 122,994 87,571 91,523
------------------------------ ----- ------------- ------------- ---------
Non-current liabilities
---------
Interest-bearing loans
and borrowings 54,681 40,243 78,275
------------------------------ ----- ------------- ------------- ---------
Derivative financial
instruments 1,221 196 310
------------------------------ ----- ------------- ------------- ---------
Deferred tax liabilities - 92 -
------------------------------ ----- ------------- ------------- ---------
55,902 40,531 78,585
------------------------------ ----- ------------- ------------- ---------
Current liabilities
------------- ---------
Trade and other payables 14 31,470 37,859 30,341
------------------------------ ----- ------------- ------------- ---------
Dividends payable 7 1,607 939 -
------------------------------ ----- ------------- -------------
Interest-bearing loans
and borrowings 13 2,933 - -
------------------------------ ----- ------------- ------------- ---------
Derivative financial
instruments 133 - 13
------------------------------ ----- ------------- ------------- ---------
Provisions - 87 -
------------------------------ ----- ------------- ------------- ---------
36,143 38,885 30,354
------------------------------ ----- ------------- ------------- ---------
Total liabilities 92,045 79,416 108,939
------------------------------ ----- ------------- ------------- ---------
Total equity and liabilities 215,039 166,987 200,462
------------------------------ ----- ------------- ------------- ---------
The interim financial statements of Pinewood Group plc, company
number: 03889552, were approved and authorised for issue by the
Board of Directors on 30 November 2015 and are signed on its behalf
by:
Christopher Naisby, FCCA
Finance Director
Condensed Group statement of cash flows for the six months
ended
30 September 2015
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
Note GBP000 GBP000 GBP000
------------------------------- ----- -------------- -------------- ----------
Cash flow from operating
activities:
Profit before tax 4,447 1,758 4,969
------------------------------- ----- -------------- -------------- ----------
Adjustments to reconcile
profit before tax
to net cash flows:
------------------------------- ----- -------------- -------------- ----------
Depreciation and amortisation 4,311 3,075 6,455
Profit on disposal
of property, plant
and equipment - (19) (41)
------------------------------- ----- -------------- -------------- ----------
Exceptional income - - (2,318)
------------------------------- ----- -------------- -------------- ----------
Share of results of
joint ventures 4 (575) (510) (1,149)
------------------------------- ----- -------------- -------------- ----------
Finance costs 3,162 1,204 3,890
------------------------------- ----- -------------- -------------- ----------
Cash flow from operating
activities before
changes in working
capital 11,345 5,508 11,806
------------------------------- ----- -------------- -------------- ----------
(Increase)/decrease
in trade and other
receivables (3,651) (518) 5,909
------------------------------- ----- -------------- -------------- ----------
Decrease in inventories - 51 262
------------------------------- ----- -------------- -------------- ----------
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
(Decrease)/increase
in trade and other
payables (2,648) 9,761 899
------------------------------- ----- -------------- -------------- ----------
Decrease in provisions - (412) (499)
------------------------------- ----- -------------- -------------- ----------
Cash generated from
operations 5,046 14,390 18,377
------------------------------- ----- -------------- -------------- ----------
Finance costs paid (2,339) (1,070) (2,463)
------------------------------- ----- -------------- -------------- ----------
Corporation tax paid (428) (1,170) (1,211)
------------------------------- ----- -------------- -------------- ----------
Corporation tax received
in respect of FPC
activity 2,912 - 1,402
------------------------------- ----- -------------- -------------- ----------
Net cash flow from
operating activities 5,191 12,150 16,105
------------------------------- ----- -------------- -------------- ----------
Cash flow used in
investing activities:
------------------------------- ----- -------------- -------------- ----------
Proceeds from disposal
of property, plant
and equipment - - 56
------------------------------- ----- -------------- -------------- ----------
Purchase of property,
plant and equipment (15,898) (2,445) (7,074)
------------------------------- ----- -------------- -------------- ----------
Investment acquisitions - - (36,800)
------------------------------- ----- -------------- -------------- ----------
Investment in joint
ventures 4 (1,595) (1,683) (2,588)
------------------------------- ----- -------------- -------------- ----------
Distribution from
joint ventures 4 - 513 820
------------------------------- ----- -------------- -------------- ----------
Net cash flow used
in investing activities (17,493) (3,615) (45,586)
------------------------------- ----- -------------- -------------- ----------
Cash flow from/(used
in) financing activities:
Dividends paid - - (1,285)
------------------------------- ----- -------------- -------------- ----------
Proceeds from issue
of shares 28,779 - -
------------------------------- ----- -------------- -------------- ----------
Repayment of asset
financing obligations (618) (827) (1,542)
Proceeds from asset
financing - - 1,152
------------------------------- ----- -------------- -------------- ----------
Repayment of bank
borrowings (75,000) (3,500) (4,500)
----- -------------- -------------- ----------
Proceeds from bank
borrowings 53,500 3,500 41,500
------------------------------- ----- -------------- -------------- ----------
Payment of loan issue
fees (1,865) - (262)
------------------------------- ----- -------------- -------------- ----------
Net cash flow from/(used
in) financing activities 4,796 (827) 35,063
------------------------------- ----- -------------- -------------- ----------
Net (decrease)/increase
in cash (7,506) 7,708 5,582
------------------------------- ----- -------------- -------------- ----------
Cash at the start
of the period/year 6,357 775 775
------------------------------- ----- -------------- -------------- ----------
(Overdraft)/cash at
the end of the period/year 13 (1,149) 8,483 6,357
------------------------------- ----- -------------- -------------- ----------
Condensed Group reconciliation of movement in net debt
for the six months ended 30 September 2015
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
-------------- -------------- ----------
Reconciliation of net
cash flow to movement
in net debt:
---------------------------------- -------------- -------------- ----------
(Decrease)/increase in
cash and cash equivalents (7,506) 7,708 5,582
---------------------------------- -------------- -------------- ----------
Repayments of asset financing
obligations 618 827 1,542
---------------------------------- -------------- -------------- ----------
Proceeds from asset financing - - (1,152)
---------------------------------- -------------- -------------- ----------
Loan issue costs 1,865 - 262
---------------------------------- -------------- -------------- ----------
Amortisation of loan issue
costs (389) (131) (988)
---------------------------------- -------------- -------------- ----------
Repayment of bank borrowings 75,000 3,500 4,500
---------------------------------- -------------- -------------- ----------
Proceeds from bank borrowings (53,500) (3,500) (41,500)
---------------------------------- -------------- -------------- ----------
Movement in net debt 16,088 8,404 (31,754)
---------------------------------- -------------- -------------- ----------
Net debt at start of period/year (71,918) (40,164) (40,164)
---------------------------------- -------------- -------------- ----------
Net debt at end of period/year (55,830) (31,760) (71,918)
---------------------------------- -------------- -------------- ----------
Attributable to:
Unrestricted (overdraft)/cash (2,933) 4,136 5,807
---------------------------------- -------------- -------------- ----------
Restricted cash 1,784 4,347 550
---------------------------------- -------------- -------------- ----------
Non-current liabilities
---------------------------------- -------------- -------------- ----------
Revolving credit facility
loan (53,500) (38,000) (75,000)
---------------------------------- -------------- -------------- ----------
Unamortised loan issue
costs 1,476 595 -
---------------------------------- -------------- -------------- ----------
Asset financing (2,657) (2,838) (3,275)
---------------------------------- -------------- -------------- ----------
Interest-bearing loans
and borrowings (54,681) (40,243) (78,275)
---------------------------------- -------------- -------------- ----------
Net debt at end of period/year (55,830) (31,760) (71,918)
---------------------------------- -------------- -------------- ----------
Net debt at end of period/year
excluding restricted cash (57,614) (36,107) (72,468)
---------------------------------- -------------- -------------- ----------
Condensed Group statement of changes in equity
From 1 April 2014 to 30 September 2015
Capital
redemption Retained
Share capital Share premium reserve Merger reserve earnings Total equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
At 1 April 2014 4,941 48,718 135 348 30,570 84,712
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Profit for the
period - - - - 3,798 3,798
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Equity dividends - - - - (939) (939)
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
At 30 September
2014
(unaudited) 4,941 48,718 135 348 33,429 87,571
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Profit for the
period - - - - 4,298 4,298
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Equity dividends - - - - (346) (346)
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
At 31 March 2015
(audited) 4,941 48,718 135 348 37,381 91,523
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Equity placing 800 29,200 - - - 30,000
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Costs of equity
placing - (1,222) - - - (1,222)
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Profit for the
period - - - - 4,300 4,300
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Equity dividends - - - - (1,607) (1,607)
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
At 30 September
2015
(unaudited) 5,741 76,696 135 348 40,074 122,994
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Notes to the condensed Group consolidated financial statements
at 30 September 2015
1. Authorisation of financial statements and statement of compliance with IFRS
The unaudited interim condensed Group financial statements of
Pinewood Group plc (formerly Pinewood Shepperton plc) for the six
months ended 30 September 2015 were authorised for issue by the
Board of Directors on 30 November 2015 and the statement of
financial position was signed on the Board's behalf by the Finance
Director. Pinewood Group plc ("the Company") is a public limited
company incorporated and domiciled in England and Wales. The
registered office is located at Pinewood Studios, Pinewood Road,
Iver Heath, Buckinghamshire, SL0 0NH, UK. The Company's ordinary
shares are traded on the AIM market of the London Stock
Exchange.
The unaudited interim condensed consolidated financial
statements for the six months ended 30 September 2015 have been
prepared in accordance with International Accounting Standard 34
Interim financial reporting, as adopted by the European Union.
2. Basis of preparation and accounting policies
Basis of preparation
The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements as defined in Section 435 of the Companies Act
2006, and should be read in conjunction with the Group's Annual
Report and Accounts for the year ended 31 March 2015, from which
comparative information included in the interim condensed
consolidated financial statements has been extracted. The
consolidated financial statements for the year ended 31 March 2015,
which were prepared under International Financial Reporting
Standards ("IFRS") as adopted by the European Union, upon which the
auditors issued an unqualified opinion, and did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report and did not contain
statements under section 498(2) or (3) of the Companies Act 2006,
have been delivered to the Registrar of Companies.
Going concern
Information on the Group's risks, management and exposure are
set out in the "Key business risks" section of the Group's Annual
Report and Note 28 "Financial risk management, objectives and
policies" of the Group's Annual Accounts for the year ended 31
March 2015. Although the Group is in a net current liability
position of GBP20.8m, the Group has GBP81.5m of undrawn committed
loan facilities in place. The Group also has GBP9.3m of asset
financing available to draw upon including GBP1.6m of a
pre-approved facility. The Directors are confident these undrawn
debt facilities provide sufficient headroom to support continued
trading. The Directors, therefore consider that the Group has
adequate resources to continue in the operational business for the
foreseeable future and as such it is appropriate to adopt the going
concern basis in preparing these consolidated financial
statements.
Significant accounting policies
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the Group's Annual
Accounts for the year ended 31 March 2015, with the exception of
newly applicable standards effective for annual periods beginning
on or after 1 January 2015, none of which have a material impact on
these accounts.
The Group has not early adopted any standard, interpretation or
amendment that was issued but is not yet effective.
Significant accounting judgements and estimates
Estimation uncertainty
The key assumptions concerning the future and other key sources
of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed in Note 18 "Principal Risks and Uncertainties".
3. Segment information and revenue analysis
The Group identifies its operating segments based on a
combination of factors, including the nature and type of service
provided and differences in regulatory environment. Operating
segments are aggregated where there is a high degree of consistency
across these factors, and the segments have similar economic
characteristics. Operating segments are reported in a manner
consistent with the internal reporting provided to the chief
operating decision maker.
The Group has determined it has two reportable segments, Media
Services, which provides studio and related services to the film,
television and wider creative industries, and Media Investment,
which provides content investment and production services,
principally to the film industry.
The accounting policies of all operating segments are the same
as those described in Note 2, "Basis of preparation and accounting
policies".
The Group accounts for intersegment sales and transfers as if
the sales or transfers were to third parties, i.e. at current
market price.
Segment data for the period ended 30 September 2015 and 30
September 2014 is presented below:
Revenue: Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
--------------------------------------
Unaudited Unaudited Audited
--------------------------------------
GBP000 GBP000 GBP000
--------------------------------------
Media Services:
External Film 26,601 21,928 43,946
Intersegment Film 229 614 1,256
Television 1,914 1,681 5,826
-------------------------------------- -------------- -------------- ----------
Media Hub 3,751 2,778 6,199
-------------------------------------- -------------- -------------- ----------
32,495 27,001 57,227
-------------------------------------- -------------- -------------- ----------
Media Investment:
-------------------------------------- -------------- -------------- ----------
Film Production Companies 5,037 11,599 17,752
-------------------------------------- -------------- -------------- ----------
External investment advisory 421 403 804
-------------------------------------- -------------- -------------- ----------
Investment recoupment 29 128 475
-------------------------------------- -------------- -------------- ----------
Other income and commissions 493 (11) -
-------------------------------------- -------------- -------------- ----------
5,980 12,119 19,031
-------------------------------------- -------------- -------------- ----------
Total segmental revenue 38,475 39,120 76,258
-------------------------------------- -------------- -------------- ----------
Elimination of intersegment
revenue (229) (614) (1,256)
-------------------------------------- -------------- -------------- ----------
Group revenue 38,246 38,506 75,002
-------------------------------------- -------------- -------------- ----------
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
Income Six months ended Six months ended Year ended
statement: 30 September 2015 30 September 2014 31 March 2015
Unaudited Unaudited Audited
----------------------------------- ----------------------------------- -----------------------------------
Media Media Total Media Media Total Media Media Total
Services Invest-ment Services Invest-ment Services Invest-ment
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Segment revenue-
total 32,495 5,980 38,475 27,001 12,119 39,120 57,227 19,031 76,258
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Cost of sales (18,318) (6,314) (24,632) (15,339) (14,418) (29,757) (35,933) (22,094) (58,027)
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Elimination of
intersegment
revenue (229) - (229) (614) - (614) (1,256) - (1,256)
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Gross
profit/(loss) 13,948 (334) 13,614 11,048 (2,299) 8,749 20,038 (3,063) 16,975
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Selling and
distribution
expenses (907) - (907) (753) - (753) (2,036) - (2,036)
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Administrative
expenses (4,717) (956) (5,673) (4,220) (1,343) (5,563) (7,000) (2,222) (9,222)
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Profit on disposal
of property,
plant and
equipment - - - 19 - 19 41 - 41
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Operating
profit/(loss) 8,324 (1,290) 7,034 6,094 (3,642) 2,452 11,043 (5,285) 5,758
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Exceptional income - - - - - - 1,952 - 1,952
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Share of results
of joint ventures 575 - 575 510 - 510 1,149 - 1,149
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Finance costs (3,162) - (3,162) (1,204) - (1,204) (3,890) - (3,890)
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Profit/(loss)
before tax 5,737 (1,290) 4,447 5,400 (3,642) 1,758 10,254 (5,285) 4,969
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Corporation tax
(expense)/credit (1,778) 590 (1,188) (1,511) 312 (1,199) (2,199) 385 (1,814)
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
UK film tax relief - 1,011 1,011 - 2,571 2,571 - 4,062 4,062
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Deferred tax
credit/(expense) 408 (378) 30 215 453 668 155 724 879
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Total corporation
tax
(expense)/credit (1,370) 1,223 (147) (1,296) 3,336 2,040 (2,044) 5,171 3,127
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
Profit/(loss)
after tax 4,367 (67) 4,300 4,104 (306) 3,798 8,210 (114) 8,096
------------------- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ---------
During the period, the Group provided film finance totalling
GBP850,000 to its wholly owned subsidiary FPCs (six months ended 30
September 2014: GBP969,000) and GBP150,000 to a third party
FPC.
4. Interests in joint ventures
As at 30 September 2015 and 31 March 2015, the Group had
interests in the following joint ventures:
Joint Venture Name Principal place of business % ownership interest % voting rights
------------------------- ---------------------------- -------------------- ---------------
Pinewood Atlanta LLC USA 40 50
------------------------- ---------------------------- -------------------- ---------------
PAS Holdings Fayette LLC USA 40 50
------------------------- ---------------------------- -------------------- ---------------
Pinewood Atlanta LLC / PAS Holdings Fayette LLC
The Group has a 40% interest in a joint venture with River's
Rock LLC which has developed and operates a world class film
studio, known as Pinewood Atlanta Studios, in Atlanta, Georgia. The
Group also provides sales and marketing services to the joint
venture. Pinewood Atlanta Studios is strategic to the Group's
business given the similarity in nature to the Group's core Media
Services operations.
Pinewood Atlanta Studios is the Group's only joint venture as at
30 September 2015. As at 30 September 2014, the Group had the
following additional interests in joint ventures:
Joint Venture Name Principal place of business % ownership interest % voting rights
--------------------------------------------- ---------------------------- -------------------- ---------------
Shepperton Studios (General Partner) Limited United Kingdom 50 50
--------------------------------------------- ---------------------------- -------------------- ---------------
Shepperton Studios Property Partnership United Kingdom 50 50
--------------------------------------------- ---------------------------- -------------------- ---------------
Shepperton Studios Property Partnership ("SSPP")
Up until 3 December 2014, the Group had a 50% interest in SSPP,
an entity controlled jointly with a third party, Aviva Investors.
On 3 December 2014, the Group acquired the 50% interest in SSPP
previously held by clients of Aviva Investors. Full details of the
transaction are included in Note 9 of the Group's Annual Accounts
for the year ended 31 March 2015. The comparative figures for the
period ended 30 September 2014 include the Group's 50% share in
SSPP on an equity accounting basis. The current period to 30
September 2015 includes SSPP on a fully consolidated basis.
Shepperton Studios (General Partner) Limited
The Group also had a 50% interest in Shepperton Studios (General
Partner) Limited until 3 December 2014. On that date, the Group
acquired the other 50% interest as part of the SSPP transaction
outlined above. There are no material amounts consolidated for this
entity in either the current or prior period.
Reconciliation of movement in investment in joint ventures:
31
March
30 September 2015 30 September 2014 2015
GBP000 GBP000 GBP000
---------------------------------------------------------- ------------------ ------------------ --------
Investment in joint ventures at beginning of period/year 4,026 7,394 7,394
----------------------------------------------------------- ------------------ ------------------ --------
Additional investment in joint ventures 1,595 1,683 2,588
----------------------------------------------------------- ------------------ ------------------ --------
Share of results of joint ventures 575 510 1,149
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
----------------------------------------------------------- ------------------ ------------------ --------
Less disposal of joint ventures - - (6,285)
----------------------------------------------------------- ------------------ ------------------ --------
Less distributions received from joint ventures - (513) (820)
----------------------------------------------------------- ------------------ ------------------ --------
Investment in joint ventures at end of period/year 6,196 9,074 4,026
----------------------------------------------------------- ------------------ ------------------ --------
5. Finance costs
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
----------------------------------- ------------- ------------- ---------
Bank loans and overdrafts 1,470 873 2,376
----------------------------------- ------------- ------------- ---------
Interest rate hedging 208 113 233
----------------------------------- ------------- ------------- ---------
Finance fee amortisation 389 132 989
----------------------------------- ------------- ------------- ---------
Finance charges payable
under asset financing 63 74 145
----------------------------------- ------------- ------------- ---------
Other finance charges - 9 18
----------------------------------- ------------- ------------- ---------
Fair value movements of
derivative financial instruments 1,032 3 129
----------------------------------- ------------- ------------- ---------
3,162 1,204 3,890
----------------------------------- ------------- ------------- ---------
6. Taxation
The current corporation tax charge for the period, arising on
profit before tax of GBP4.4m, was GBP0.1m (six months ended 30
September 2013: GBP2.0m credit). The corporation tax charge for the
year includes GBP1.0m of UK film tax relief (six months ended 30
September 2014: GBP2.6m) which reflects the accounting treatment of
the Group's FPCs and offsets the operating loss from Media
Investment in respect of these FPCs.
The underlying rate of tax on profit before accounting for UK
film tax relief from film production companies, prior year
adjustments and exceptional items is 24% (six months ended 30
September 2014: 21%).
Reconciliation of the total tax charge
A reconciliation between the tax expense and the product of
accounting profit multiplied by the standard rate of corporation
tax in the UK for the six months ended 30 September 2015 is:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
--------------------------------------- -------------- -------------- ----------
Accounting profit before
corporation tax 4,447 1,758 4,969
--------------------------------------- -------------- -------------- ----------
Profit on ordinary activities
multiplied by UK rate of
20% (2014: 21%) 889 369 1,043
--------------------------------------- -------------- -------------- ----------
Adjustments in respect
of:
--------------------------------------- -------------- -------------- ----------
UK film tax relief (1,011) (2,571) (4,062)
--------------------------------------- -------------- -------------- ----------
Corporation tax over provided
in previous years - - (294)
--------------------------------------- -------------- -------------- ----------
Deferred tax over provided
in previous years - - (138)
--------------------------------------- -------------- -------------- ----------
Prior period deferred tax
adjustment in respect of
Q Stage - - (428)
--------------------------------------- -------------- -------------- ----------
Non allowable depreciation
on buildings 157 115 230
Income from joint venture - - (84)
--------------------------------------- -------------- -------------- ----------
Other non allowable expenses/(income) 41 (35) 129
--------------------------------------- -------------- -------------- ----------
Overseas tax at higher
rate 71 49 49
--------------------------------------- -------------- -------------- ----------
Utilisation of previously
unrecognised tax losses - - (223)
--------------------------------------- -------------- -------------- ----------
Effect of taxation rate
change on provision for
deferred taxation - 33 15
--------------------------------------- -------------- -------------- ----------
Fair value adjustment in
respect of SSPP acquisition - - 223
--------------------------------------- -------------- -------------- ----------
Gain on disposal of sub-licence - - 413
--------------------------------------- -------------- -------------- ----------
Tax charge/(credit) 147 (2,040) (3,127)
--------------------------------------- -------------- -------------- ----------
7. Earnings per ordinary share and dividend
Basic earnings per ordinary share is calculated by dividing net
profit for the period attributable to the holders of ordinary
equity by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per ordinary share are calculated by dividing
net profit for the period attributable to the holders of ordinary
equity by the weighted average number of ordinary shares
outstanding during the period adjusted for the effects of dilutive
potential ordinary shares resulting from employee share
schemes.
The Group presents as exceptional items on the face of the
income statement those items where the cost or income is one off in
nature and of such size or incidence that the additional disclosure
is required for the reader to understand the financial statements.
Basic and diluted earnings per share are also presented adjusting
for the effect of the exceptional items and fair value
movements.
The following reflects the profit and number of shares
generating the basic and diluted earnings per ordinary share
computations:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
----------------------------------- -------------- -------------- ----------
Profit attributable to
equity holders of the
parent 4,300 3,798 8,096
----------------------------------- -------------- -------------- ----------
Adjustments to profit
for calculation of normalised
earnings per share:
----------------------------------- -------------- -------------- ----------
Exceptional income - - (1,952)
----------------------------------- -------------- -------------- ----------
Fair value movements of
derivative financial instruments 1,032 - 129
----------------------------------- -------------- -------------- ----------
Taxation adjustments (206) - 378
----------------------------------- -------------- -------------- ----------
Adjusted profit for normalised
earnings per share 5,126 3,798 6,651
----------------------------------- -------------- -------------- ----------
Thousands Thousands Thousands
----------------------------------- -------------- -------------- ----------
Basic and diluted weighted
average number of ordinary
shares 56,667 49,410 49,410
----------------------------------- -------------- -------------- ----------
Six months Six months Year
ended ended ended
30 September 30 September 31 March
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
2015 2014 2015
Earnings per share: Unaudited Unaudited Audited
----------------------------------- -------------- -------------- ----------
Basic and diluted for
result for the period/year 7.6p 7.7p 16.4p
----------------------------------- -------------- -------------- ----------
Basic and diluted for
result for the period/year
adjusted for exceptional
items and fair value movements 9.0p 7.7p 13.5p
----------------------------------- -------------- -------------- ----------
Dividends paid
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
--------------------------- -------------- -------------- ----------
Final dividend for the
year ended 31 March 2014
paid at 1.9p per share - 939 939
--------------------------- -------------- -------------- ----------
Interim dividend for the
year ended 31 March 2015
paid at 0.7p per share - - 346
--------------------------- -------------- -------------- ----------
Final dividend for the
year ended 31 March 2015
paid at 2.8p per share 1,607 - -
--------------------------- -------------- -------------- ----------
1,607 939 1,285
--------------------------- -------------- -------------- ----------
The final dividend for the year ended 31 March 2015 was paid on
5 October 2015.
The Board of Directors approved and declared an interim dividend
of 0.8p per share for the year ended 31 March 2016 on 30 November
2015. The dividend is to be paid on 8 February 2016.
8. Share capital and reserves
Share Capital
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at the general meetings of the Company.
On 17 April 2015, 8,000,000 new ordinary shares of par value 10p
were issued for cash and admitted to trading on AIM, giving rise to
gross proceeds of GBP30.0m. The proceeds of this share issue were
used to reduce drawn bank debt.
Authorised Issued, called up and fully paid
---------------------------------------------------- -----------------------------------
No. GBP000 No. GBP000
------------------------------- ----------- ------- --------------------- ------------
Ordinary shares of 10p each:
------------------------------- ----------- ------- --------------------- ------------
As at 30 September 2015 70,000,000 7,000 57,409,926 5,741
------------------------------- ----------- ------- --------------------- ------------
As at 30 September 2014 70,000,000 7,000 49,409,926 4,941
------------------------------- ----------- ------- --------------------- ------------
As at 31 March 2015 70,000,000 7,000 49,409,926 4,941
------------------------------- ----------- ------- --------------------- ------------
Share Premium
As a result of the issue of new ordinary shares at an exercise
price of 375p, the Share Premium reserve was credited with
GBP29,200,000, before directly attributable expenses totalling
GBP1,222,000 were deducted.
Capital redemption reserve
The capital redemption reserve arose as a result of the
repurchase of shares in 2001.
Merger reserve
On acquiring Shepperton Studios Limited the Company issued
ordinary shares as part of the consideration. Merger relief was
taken in accordance with Section 131 of the Companies Act 1985
(since succeeded by Section 612 of the Companies Act 2006), and
hence GBP0.3m was credited to the merger reserve.
9. Property, plant and equipment
Freehold Fixtures,
buildings and Leasehold fittings and Assets under
Freehold land improve-ments improve-ments equipment construc-tion Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Cost:
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 1 April 2014 56,684 66,913 3,379 35,919 3,467 166,362
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Additions 23 1,068 80 402 683 2,256
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 30 September
2014 56,707 67,981 3,459 36,321 4,150 168,618
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Acquisition of JV
interest - 46,030 - - - 46,030
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Additions 8 1,363 326 1,176 1,988 4,861
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Disposals - - (226) (1,651) - (1,877)
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 31 March 2015 56,715 115,374 3,559 35,846 6,138 217,632
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Additions - 635 75 1,230 18,328 20,268
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Disposals - (116) - - - (116)
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Reclassification - 3,407 (3,407) - - -
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 30 September
2015 56,715 119,300 227 37,076 24,466 237,784
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Depreciation:
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 1 April 2014 7,690 14,757 1,991 23,697 - 48,135
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Provided during
the period - 1,447 81 1,185 - 2,713
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 30 September
2014 7,690 16,204 2,072 24,882 - 50,848
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Provided during
the period - 1,728 120 1,400 - 3,248
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Depreciation on
disposals - - (226) (1,636) - (1,862)
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 31 March 2015 7,690 17,932 1,966 24,646 - 52,234
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Provided during
the period 137 2,617 7 1,130 - 3,891
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Depreciation on
disposals - (116) - - - (116)
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Reclassification - 1,966 (1,966) - - -
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:00 ET (07:00 GMT)
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 30 September
2015 7,827 22,399 7 25,776 - 56,009
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Net book value:
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 30 September
2015 48,888 96,901 220 11,300 24,466 181,775
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 31 March 2015 49,025 97,442 1,593 11,200 6,138 165,398
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
At 30 September
2014 49,017 51,777 1,387 11,439 4,150 117,770
------------------ -------------- ---------------- ----------------- ---------------- ----------------- --------
Assets under construction at 30 September 2015, GBP24.5m, relate
to costs capitalised under the PSDF. These are not depreciated.
The Group's long term loan is secured by a floating charge over
the Group's assets.
10. Intangible assets
Goodwill
GBP000
------------------------------------------- --------
At 30 September 2015, 31 March 2015 and 30
September 2014 5,604
------------------------------------------- --------
The goodwill of GBP5.6m (30 September 2014: GBP5.6m) has been
acquired through business combinations and has been allocated to
the Group's cash-generating unit. It is tested at least annually
for impairment. The last impairment review was performed at 31
March 2015 and did not give rise to any indication of
impairment.
The recoverable amount has been determined based on a value in
use calculation using cash flow projections based on the Group's
long range plan. The pre-tax cash flows over this period support
the carrying value of the goodwill.
The key assumptions used to determine the recoverable amount for
the cash generating unit were discussed in the Group's Annual
Report and Accounts for the year ended 31 March 2015.
11. Trade receivables
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
--------------------------- ------------- ------------- ---------
Trade receivables - Media
Services 4,901 4,328 4,942
--------------------------- ------------- ------------- ---------
Trade receivables - FPCs 3,107 7,999 748
--------------------------- ------------- ------------- ---------
8,008 12,327 5,690
--------------------------- ------------- ------------- ---------
12. Prepayments and other receivables
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
----------------------------------- ------------- ------------- ---------
Prepayments and other receivables 4,546 3,093 3,303
----------------------------------- ------------- ------------- ---------
Corporation tax recoverable 948 3,910 3,609
----------------------------------- ------------- ------------- ---------
5,494 7,003 6,912
----------------------------------- ------------- ------------- ---------
13. Cash
Included within the cash and interest bearing loans and
borrowings balance per the statement of financial position at the
period end are amounts which are unavailable for general use. These
amounts relate to funds reserved solely for use in the production
of specific Pinewood Film Production Company operations. The
reconciliation below shows the breakdown of total cash per the
statement of financial position at the period end:
31 March
30 September 2015 30 September 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
------------------------------- ------------------ ------------------ ---------
Unrestricted (overdraft)/cash (2,933) 4,136 5,807
------------------------------- ------------------ ------------------ ---------
Restricted cash 1,784 4,347 550
------------------------------- ------------------ ------------------ ---------
Total (overdraft)/cash (1,149) 8,483 6,357
------------------------------- ------------------ ------------------ ---------
The condensed Group statement of cash flows on page 18 presents
the cash flows for the Group, which include cash flows in respect
of both the Media Services and Media Investment segments. Included
within the Media Investment segment, the cash flows of the Group's
FPCs represent movements on the Group's restricted funds. Excluding
these restricted cash flows, the movement of the Group's
unrestricted cash flows can be presented as follows:
Unrestricted cash flows for the six months ended 30 September
2015
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
------------------------------- -------------- -------------- ----------
Cash flow from operating
activities:
Profit before tax 5,561 4,566 9,297
-------------------------------- -------------- -------------- ----------
Adjustments to reconcile
profit before tax
to net cash flows:
------------------------------- -------------- -------------- ----------
Depreciation and amortisation 4,311 3,075 6,455
Profit on disposal
of property, plant
and equipment - (19) (41)
-------------------------------- -------------- -------------- ----------
Exceptional income - - (2,318)
-------------------------------- -------------- -------------- ----------
Share of results of
joint ventures (575) (510) (1,149)
-------------------------------- -------------- -------------- ----------
Finance costs 3,162 1,204 3,890
-------------------------------- -------------- -------------- ----------
Cash flow from operating
activities before
changes in working
capital 12,459 8,316 16,134
-------------------------------- -------------- -------------- ----------
(Increase)/decrease
in trade and other
receivables (1,103) 710 (415)
-------------------------------- -------------- -------------- ----------
Decrease in inventories - 51 262
-------------------------------- -------------- -------------- ----------
(Decrease)/increase
in trade and other
payables (4,632) 2,804 4,974
-------------------------------- -------------- -------------- ----------
Decrease in provisions - (412) (499)
-------------------------------- -------------- -------------- ----------
Cash generated from
operations 6,724 11,469 20,456
-------------------------------- -------------- -------------- ----------
Finance costs paid (2,339) (1,070) (2,463)
-------------------------------- -------------- -------------- ----------
Corporation tax paid (428) (1,170) (1,012)
-------------------------------- -------------- -------------- ----------
Net cash flow from
operating activities 3,957 9,229 16,981
-------------------------------- -------------- -------------- ----------
Net cash flow used
in investing activities (17,493) (3,615) (45,586)
-------------------------------- -------------- -------------- ----------
Net cash flow from/(used
in) financing activities 4,796 (827) 35,063
-------------------------------- -------------- -------------- ----------
Net (decrease)/increase
in cash (8,740) 4,787 6,458
-------------------------------- -------------- -------------- ----------
Cash at the start
of the period/year 5,807 (651) (651)
-------------------------------- -------------- -------------- ----------
(MORE TO FOLLOW) Dow Jones Newswires
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(Overdraft)/cash at
the end of the period/year (2,933) 4,136 5,807
-------------------------------- -------------- -------------- ----------
14. Trade and other payables
31 March
30 September 2015 30 September 2014 2015
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Trade payables - Media Services 4,571 4,437 6,104
-------------------------------------- ------------------ ------------------ ---------
Trade payables - FPCs 3,378 8,844 4,334
-------------------------------------- ------------------ ------------------ ---------
Value added tax 413 1,316 549
-------------------------------------- ------------------ ------------------ ---------
Other payables 1,715 1,796 1,445
-------------------------------------- ------------------ ------------------ ---------
Accruals 5,583 4,527 6,619
-------------------------------------- ------------------ ------------------ ---------
Capital expenditure related payables 5,760 648 1,347
-------------------------------------- ------------------ ------------------ ---------
Deferred income - Media Services 7,362 8,834 9,139
-------------------------------------- ------------------ ------------------ ---------
Deferred income - FPCs 2,688 7,457 804
-------------------------------------- ------------------ ------------------ ---------
31,470 37,859 30,341
-------------------------------------- ------------------ ------------------ ---------
15. Commitments and contingencies
Capital commitments
At 30 September 2015, the Group had total capital commitments
contracted for, but not provided in the accounts of GBP38,686,000
wholly related to the PSDF Design and Build contract with Sir
Robert McAlpine. At 30 September 2014, there were no such capital
commitments.
Guarantees
At 30 September 2015, the Group had guarantees in place, in the
form of documentary credits, totalling GBP654,000 (30 September
2014: GBP155,000) in relation to certain Section 278 highways
related infrastructure which have not been provided for relating to
PSDF.
16. Financial risk management, objectives and policies
The financial risk management, objectives and policies of the
Group are disclosed in Note 29 of the Group's Annual Report and
Accounts for the year ended 31 March 2015.
Fair values of financial assets and liabilities
As at 30 September 2015, there were no significant differences
between the book value and fair value (as determined by market
value) of the Group's financial assets and liabilities. The fair
value of floating and fixed rate borrowings approximate to the
carrying value because interest rates are reset to market rates at
intervals of less than one year.
The fair value of derivative financial instruments is estimated
by discounting the future contracted cash flow using readily
available market data and represents a level 2 measurement in the
fair value hierarchy under IFRS 7 Financial Instruments:
Disclosures.
As at 30 September 2015, the total interest rate instruments
outstanding were for principal amounts totalling GBP32.5m (30
September 2014: GBP22.5m). The contracts mature in 2016 and
therefore the cash flows and resulting effect on profit and loss
are expected to occur over that period. The fair values of the
interest rate instruments are disclosed as a liability of GBP1.4m
in the condensed balance sheet. Any movements in the fair values of
the contracts are recognised in the income statement.
As outlined on page 11, the Group has also contracted on forward
dated interest rate instruments for principal amounts totalling
GBP50.0m which become effective in 2016 in line with the maturity
dates of the instruments currently in place.
17. Related party disclosures
The unaudited interim consolidated financial statements include
the financial statements of Pinewood Group plc, its subsidiaries
and its interests in the joint ventures. The Group's principal
subsidiaries are:
% equity interest
----------------------------------------- -------------------------- --------------------------------------
Country of incorporation 30 September 2015 30 September 2014
----------------------------------------- -------------------------- ------------------ ------------------
Pinewood Studios Limited United Kingdom 100 100
----------------------------------------- -------------------------- ------------------ ------------------
Shepperton Studios Limited United Kingdom 100 100
----------------------------------------- -------------------------- ------------------ ------------------
Pinewood-Shepperton Studios Limited United Kingdom 100 100
----------------------------------------- -------------------------- ------------------ ------------------
Pinewood Film Advisors Limited United Kingdom 100 100
----------------------------------------- -------------------------- ------------------ ------------------
Shepperton Studios Property Partnership United Kingdom 100 50
----------------------------------------- -------------------------- ------------------ ------------------
Shepperton Studios Property Partnership ("SSPP")
Shepperton Studios Limited has a commercial property lease on
the Shepperton Studios property with SSPP. The net cost to the
Group of principal lease rentals during the comparative period
ended 30 September 2014 was GBP610,000. In addition, the Group
previously paid a top up rent to SSPP based on certain of its
trading activities at the Shepperton Studios site. The net cost to
the Group of the top up rent during the comparative six month
period ended 30 September 2014 was GBP55,000.
Shepperton Management Limited manages the assets of SSPP. Asset
management fees charged during the comparative six month period
ended 30 September 2014 were GBP253,000.
As a result of the transaction on 3 December 2014 as outlined in
Note 4, all such costs are now wholly intra-group and eliminated on
consolidation.
Pinewood Atlanta Studios
The Group has a Sales and Marketing Agreement with Pinewood
Atlanta Studios signed in July 2014. The Company is due to receive
consideration for the supply of services under this agreement
amounting to $364k per annum which is deferred for the first two
years. Fees deferred in relation to these services during the
period were GBP251k (six months ended 30 September 2014: GBP126k).
In total GBP630k is deferred for future payment to the Group at 30
September 2015 (30 September 2014: GBP126k).
Transactions with a Shareholder
The Group has an Advisory and Non-Executive Directors Services
Agreement with Peel Acquisitions (Pegasus) Limited. As
consideration for the supply of Non-Executive Directors under this
agreement, the Company pays a fee of GBP40,000 per annum per
Director supplied. Fees charged in relation to these services
during the period were GBP20,000 (six months ended 30 September
2014: GBP60,000) of which GBP20,000 remains outstanding for payment
by the Group at 30 September 2015 (30 September 2014:
GBP30,000).
Transaction with Director
The Group had a consultancy agreement with Gasworks Media
Limited, a company incorporated in the Isle of Man, whose sole
shareholder, Steve Christian, was also an Executive Director of the
Group until his resignation on 5 May 2015. The total value of the
transactions during the period was GBP27,000, (six month period
ended 30 September 2014: GBP183,000), of which GBPNil remains
outstanding for payment by the Group at 30 September 2015 (30
September 2014: GBP2,000). As a result of Steve Christian's
resignation as an Executive Director of the Group, the consultancy
agreement was terminated.
Adoption of Financial Reporting Standard (FRS) 101 - Reduced
Disclosure Framework
Following the publication of FRS 100 Application of Financial
Reporting Requirements by the Financial Reporting Council, Pinewood
Group plc is required to change its accounting framework for its
Company financial statements for its financial year ending 31 March
2016. The Company financial statements included in the Annual
Report and Accounts for the financial year ending 31 March 2015
were prepared under UK GAAP.
The Board considers that it is in the best interests of the
Group for Pinewood Group plc to adopt the FRS 101 Reduced
Disclosure Framework, which is intended for use by parent and
subsidiary companies of groups reporting under IFRS on a
consolidated basis. No disclosures in the Company financial
statements previously prepared under UK GAAP would be omitted on
adoption of FRS 101. A shareholder or shareholders holding in
aggregate 5% or more of the total allotted shares in Pinewood Group
plc may serve objections to the use of the disclosure exemptions on
Pinewood Group plc, in writing, to its registered office (Pinewood
Road, Iver Heath, Buckinghamshire, SL0 0NH) not later than 31
January 2016.
18. Principal risks and uncertainties
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