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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 £30m through the issue of 8,000,000 new ordinary shares
· New banking facilities of up to £135m
· 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
ended
30
September
2015
Six months
ended
30
September
2014
Year
On Year
comparison
Group Revenue £38.2m £38.5m -0.7%
Media Services Revenue £32.5m £27.0m +20.4%
Group Operating Profit £7.0m £2.5m +186.9%
Media Services Operating Profit £8.3m £6.1m +36.6%
Profit after tax £4.3m £3.8m +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 £55.8m £31.8m +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 £25m fund established by the Isle of Man Treasury and a £30m 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.
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
30
September
2015
Six
months
ended
30
September
2014
Year
ended
31
March
2015
Media Services
Revenue (including
inter-segment) £32.5m £27.0m £57.2m
Operating profit before
exceptional items £8.3m £6.1m £11.0m
EBITDA* £12.6m £9.2m £17.5m
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 (£0.1m) (£0.3m) (£0.1m)
Film finance funding
invested by the Group £1.0m £1.0m £1.0m
Film finance funding
from third party funds £3.4m £6.4m £6.4m
Group performance
Profit after tax £4.3m £3.8m £8.1m
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) £6.7m £11.5m £20.5m
Net debt £55.8m £31.8m £71.9m
* 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 £32.5m for the period (six months ended 30 September
2014: £27.0m), including £0.2m of intersegment revenue (six months ended 30 September 2014:
£0.6m). 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 £26.8m (six months ended 30 September 2014: £22.5m), 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 24th 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 £4.8m(six months ended 30 September 2014: £3.6m).
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 Awards2014, 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 £1.4m (six months ended 30
September 2014: £1.8m) 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
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 £1.9m (sixmonths ended 30 September 2014: £1.7m).
The Group's TVstudios 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 £3.8m (six
months ending 30 September 2014: £2.8m). The increase is predominantly due to Shepperton Media
Hub revenues of £0.6m 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 £24.5m of assets in the course of construction and
land of £5.3m relating to this project, totalling £29.8m (30 September 2014: £9.5m) 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 £6.0m (six months ended 30 September 2014: £12.1m). 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 £5.0m (six months ended 30 September
2014: £11.6m).
Investment advisory
Investment advisory revenue for the period was £0.4m (six months ended 30 September 2014:
£0.4m).
The Company continues to advise on funds totalling £55m, 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 filmsDon'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 £0.85m to its wholly-owned subsidiary Film Production Companies ("FPCs") (six months
ended 30 September 2014: £1.0m) and £0.15m to third party FPCs (six months ended 30 September
2014: £Nil).
Film production companies
Revenue from FPCs for the period totalled £5.0m (six months ended 30 September 2014: £11.6m).
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 £1.1m (six months ended 30 September 2014: £2.8m) as
expected is largely offset by UK Film tax relief of £1.0m (six months ended 30 September 2014:
£2.6m).
Included in the Group cash balance (excluding overdraft) is £1.8m of amounts restricted solely for
use in the production of specific FPC operations (six months ended 30 September 2014: £4.3m).
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 £0.1m for the period (six months ended 30
September 2014: £0.3m loss) due to an increase in other income and commissions.
Group performance
Total consolidated revenue for the period is £38.2m (six months ended 30 September 2014 restated:
£38.5m). 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 £5.0m
(six months ended 30 September 2014: £11.6m).
Profit after tax for the period ended 30 September 2015 was £4.3m (six months ended 30
September 2014: £3.8m). 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 £11.3m (six months ended 30 September 2014: £5.6m), including £1.3m of Media
Investment loss (six months ended 30 September 2014: £3.6m loss).
Taxation
The total corporation tax charge for the period, based on profit before tax of £4.4m, was £0.1m (six
months ended 30 September 2014: £2.0m credit).
The Group qualified for an aggregate film tax credit of £1.0m (six months ended 30 September 2014:
£2.6m) 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
The Company's cash balance (including restricted cash of £1.8m) decreased by £7.5m during the
period, which includes a £1.2m 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 £6.3m (six months ended 30 September 2014:
£8.9m inflow) includes an outflow of £0.6m relating to FPC restricted cash (six months ended 30
September 2014: £5.7m inflow). An outflow from Media Services deferred income of £1.8m, an
outflow from VAT and payroll taxes due to timing differences of £2.0m (most significantly relating to
PSDF invoice payments and LTIP costs), and the prepayment of rent, rates and insurance costs of
£1m are the principal contributors to the working capital outflow in the period.
Capital expenditure has increased from £2.4m in the comparative six month period to £15.9m
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 £4.8m (six months ended 30 September 2014: £0.8m).
The movements in the Company's cash position has had an impact on net debt and gearing. At 30
September 2015 net debt was £55.8m although this included £1.8m of restricted FPC cash.
Excluding this amount, net debt was £57.6m (30 September 2014: £31.8m including FPC cash;
£36.1m 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:
Effective
interest
rate % Maturity
30
September
2015
30
September
2014
31
March
2015
£000 £000 £000
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 £3.2m (six months ended 30 September 2014: £1.2m) which
included fair value movements on cash flow hedge of £1.0m (six months ended 30 September 2014:
£Nil).
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 £30m (before expenses of £1.2m) 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 £1.2m 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 £20.8m, principally driven by the deferred income balance which arises as
a result of the Group's billing profile on major contracts, the Group has £81.5m of undrawn
committed loan facilities in place. The Group also has £9.4m of asset financing facility available to
be drawn upon including £1.6m 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.
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
ended
30
September
Six months
ended
30
September
Year
ended
31 March
2015 2014 2015
Unaudited Unaudited Audited
Note £000 £000 £000
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
for the six months ended 30 September 2015
Six months
ended
30
September
2015
Six months
ended
30
September
2014
Year
ended
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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
2015
30
September
2014
31 March
2015
Unaudited Unaudited Audited
Note £000 £000 £000
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
ended
30 September
2015
Unaudited
Six months
ended
30 September
2014
Unaudited
Year
ended
31 March
2015
Audited
Note £000 £000 £000
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
(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
ended
30
September
2015
Six months
ended
30
September
2014
Year
ended
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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
Share
capital
Share
premium
Capital
redemption
reserve
Merger
reserve
Retained
earnings
Total
equity
£000 £000 £000 £000 £000 £000
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
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 £20.8m, the Group has £81.5m ofundrawn committed loan
facilities in place. The Group also has £9.3m of asset financing available to draw upon including
£1.6m 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:
Six months
ended
30 September
2015
Six months
ended
30 September
2014
Year
ended
31 March
2015
Unaudited Unaudited Audited
Revenue:
£000 £000 £000
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
Income
statement:
Six months ended
30 September 2015
Six months ended
30 September 2014
Year ended
31 March 2015
Unaudited
Unaudited
Audited
Medi
a
Servic
es
Medi
a
Inves
t-
ment
Total
Medi
a
Servic
es
Media
Invest
-ment
Total
Medi
a
Servic
es
Media
Invest
-ment
Total
£000 £000 £000 £000 £000 £000 £000 £000 £000
Segment
revenue-
total
32,49
5
5,98
0
38,47
5
27,00
1
12,11
9
39,12
0
57,22
7
19,03
1
76,25
8
Cost of sales
(18,31
8)
(6,31
4)
(24,63
2)
(15,33
9)
(14,41
8)
(29,75
7)
(35,93
3)
(22,09
4)
(58,02
7)
Elimination
of
intersegmen
t revenue (229) - (229) (614) - (614)
(1,256
) -
(1,256
)
Gross
profit/(loss)
13,94
8 (334)
13,61
4
11,04
8
(2,299
) 8,749
20,03
8
(3,063
)
16,97
5
Selling and
distribution
expenses (907) - (907) (753) - (753)
(2,036
) -
(2,036
)
Administrati
ve 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
(1,29
0) 7,034 6,094
(3,642
) 2,452
11,04
3
(5,285
) 5,758
Exceptional
income - - - - - - 1,952 - 1,952
Share of
results of 575 - 575 510 - 510 1,149 - 1,149
joint
ventures
Finance
costs
(3,162
) -
(3,162
)
(1,204
) -
(1,204
)
(3,890
) -
(3,890
)
Profit/(loss)
before tax 5,737
(1,29
0) 4,447 5,400
(3,642
) 1,758
10,25
4
(5,285
) 4,969
Corporation
tax
(expense)/cr
edit
(1,778
) 590
(1,188
)
(1,511
) 312
(1,199
)
(2,199
) 385
(1,814
)
UK film tax
relief -
1,01
1 1,011 -
2,571
2,571 - 4,062 4,062
Deferred tax
credit/(expe
nse) 408 (378) 30 215 453 668 155 724 879
Total
corporation
tax
(expense)/cr
edit
(1,370
)
1,22
3 (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 £850,000 to its wholly owned subsidiary
FPCs (six months ended 30 September 2014: £969,000) and £150,000 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:
30
September
2015
30
September
2014
31
March
2015
£000 £000 £000
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
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
2015
30
September
2014
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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 £4.4m, was £0.1m
(six months ended 30 September 2013: £2.0m credit). The corporation tax charge for the year
includes £1.0m of UK film tax relief (six months ended 30 September 2014: £2.6m) 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
ended
30
September
2015
Six months
ended
30
September
2014
Year
ended
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
Accounting profit before corporation tax 4,447 1,758 4,969
Profit on ordinary activities multiplied by UK rate 889 369 1,043
of20% (2014: 21%)
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
ended
30 September
2015
Six months
ended
30 September
2014
Year
ended
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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
ended
30 September
2015
Six months
ended
30 September
2014
Year
ended
31 March
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
ended
30 September
2015
Six months
ended
30 September
2014
Year
ended
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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 8February 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 £30.0m. The proceeds of this share issue were
used to reduce drawn bank debt.
Authorised Issued, called up and fully paid
No. £000 No. £000
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 £29,200,000, before directly attributable expenses totalling £1,222,000
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 £0.3m was credited to the
merger reserve.
9. Property, plant and equipment
Freehold
land
Freehold
buildings
and
improve-
ments
Leasehold
improve-
ments
Fixtures,
fittings
and
equipment
Assets
under
construc-
tion Total
£000 £000 £000 £000 £000 £000
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 137 2,617 7 1,130 - 3,891
period
Depreciation
on disposals - (116) - - - (116)
Reclassification - 1,966 (1,966) - - -
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, £24.5m, 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
£000
At 30 September 2015, 31 March 2015 and 30 September 2014 5,604
The goodwill of £5.6m (30 September 2014: £5.6m) 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
2015
30
September
2014
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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
2015
30
September
2014
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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:
30
September
2015
30
September
2014
31
March
2015
Unaudited Unaudited Audited
£000 £000 £000
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
ended
30 September
2015
Unaudited
Six months
ended
30 September
2014
Unaudited
Year
ended
31 March
2015
Audited
£000 £000 £000
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)
(Overdraft)/cash at the end of the
period/year
(2,933) 4,136 5,807
14. Trade and other payables
30 September
2015
30 September
2014
31 March
2015
Unaudited Unaudited Audited
£000 £000 £000
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 accountsof £38,686,000 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 £654,000 (30 September 2014: £155,000) 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 £32.5m (30 September 2014: £22.5m). 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 £1.4m 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 £50.0m 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 £610,000. 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£55,000.
Shepperton Management Limited manages the assets of SSPP. Asset management fees charged
during the comparative six month period ended 30 September 2014 were £253,000.
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 £251k (six months ended 30 September 2014: £126k). In total
£630k is deferred for future payment to the Group at 30 September 2015 (30 September 2014:
£126k).
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 £40,000 per annum per Director supplied. Fees charged in relation to
these services during the period were £20,000 (six months ended 30 September 2014: £60,000) of
which £20,000 remains outstanding for payment by the Group at 30 September 2015 (30 September
2014: £30,000).
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
£27,000, (six month period ended 30 September 2014: £183,000), of which £Nil remains outstanding
for payment by the Group at 30 September 2015 (30 September 2014: £2,000). 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
There are no changes to the assessment and considerations of the principal risks as disclosed in the
Group's Annual Report for year ended 31 March 2015.
The principal risks to which the Group is exposed are disclosed in the "Key business risks" section of
the Annual Report and Note 29 "Financial risk management, objectives and policies" of the Annual
Accounts for the year ended 31 March 2015. An electronic version of the Annual Report and
Accounts can be found in the investor relations section of the Group's
website: www.pinewoodgroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
