U.K.'s Pinewood Shepperton First-Half Earnings Rise
UPDATED: The studio facilities operator, known as the British home of the James Bond franchise, hosted such productions as Disney's "Cinderella" and Marvel's "Guardians of the Galaxy" but reiterated the need for more studio space amid a U.K. capacity crunch.
LONDON – U.K. studio facilities operator Pinewood Shepperton, best known as the British studio home of the James Bond franchise, on Tuesday reported improved financials for the six months ended Sept. 30, the first half of its fiscal year.
Boosting results were such film productions as Disney's Cinderella and Marvel's Guardians of the Galaxy. Other films shooting at Pinewood included Into the Woods (Disney) and Exodus (Fox). TV productions boosting financials for the first half of Pinewood's fiscal year included the BBC's The Voice UK.
Pinewood Shepperton, the largest provider of stage and studio space in Europe and the principal studio home of Star Wars: Episode VII, recorded a six-month after-tax profit of $5.5 million (£3.4 million). That was up 70 percent from £2.0 million for the same period a year earlier.
Revenue of $59.1 million (£36.6 million) compared with £27.1 million, up 35 percent. Film revenue and TV revenue both rose.
Said CEO Ivan Dunleavy: "“We are very pleased with the overall earnings during the period, which reflects a strong performance from media services, complemented by our strategic entry into media investment. The U.K., and Pinewood Shepperton in particular, continue to be in great demand from international content producers."
He added: "However, in order to continue growing the U.K.’s market share, we will need more studios and related facilities." Pinewood has been looking for approval of expansion plans but has been rebuffed so far. A public inquiry into the company's plans, which it says would create jobs and boost the British economy, started earlier this month after a Pinewood appeal.
"The demand for the company’s facilities continues to remain high," Pinewood said in its financial update. "As a result, the company has not been able to accommodate several film productions. The company has also received a number of inquiries from high-end TV productions, which are seeking to take advantage of newly introduced government tax incentives. At present, however, the company has not been able to accommodate these productions...due to capacity constraints."
However, the company in September completed a new 45,000-square-foot studio called the Q Stage.
Pinewood on Tuesday also said that its international expansion strategy "continues to progress." Pinewood Atlanta Studios, a new Georgia film studio first announced in April, is scheduled to open in March 2014, the company said in its financial update. It will own a 40 percent stake. The new studio will target U.S. productions in the film, TV, music and video game space and will look to take advantage of Georgia's production tax credits.
Media investment revenue showed the biggest jump in the six-month period, rising from £2.7 million to £11.2 million.
Pinewood has been a co-investor in select U.K. independent films and last year also struck an agreement with the Isle of Man to advise it on film investment opportunities for its media development fund.
Dunleavy told THR that he was "pleased with the performance" in the first six months of the fiscal year and the growth across the company's businesses.
"We can always squeeze one more in at the margins," he said when asked how Pinewood managed to grow despite capacity constraints. "We have managed to do that a little bit. We are also doing more in the service space – digital content work, for example, more technology solutions. And our investing business has been growing."
Also helping is a new stage at the existing studio location, he said. "Our new Q Stage just came online," Dunleavy said. "It is fully operational, but I can't tell you about specific projects."
He emphasized though that the company needs to expand to stop turning away business. "Our clients' schedules move around, which always creates additional opportunities to get work in," but Pinewood has had to turn away "significant productions," the CEO explained.
Asked about the lack of big TV dramas shooting at Pinewood, Dunleavy said: "It's absolutely a capacity issue. It's big TV, shot in a very filmic way. Given that film is growing in terms of its requirements, layering on TV is very difficult to manage with our capacity. But we are very keen on being able to offer the services we have to those producers."
With a decision on Pinewood's expansion plans expected around the beginning of April, Dunleavy said it was too early to tell if the company would succeed. "We wouldn't expect any indicators at this time," he said, calling Pinewood's case "strong and robust."
Dunleavy also addressed recent international deals, such as a joint venture with media mogul Bruno Wu's Seven Stars Media to finance and produce content in China. "We are barely 5-6 months into the relationship, but people will tell you it is the most exciting territory from a film point of view." He added: "I expect to visit China again before the end of the year, and I am looking forward to seeing the progress."
Asked about the planned spring opening of the Atlanta studio facility, he said: "Georgia is becoming a popular place for filmmakers and TV producers. We are incredibly pleased with progress at the studio site."
Asked about his longer-term view on the U.S. site, Dunleavy said: "initially it is a five-stage studio, but we do have long-term plans to increase that. The idea of a bespoke studio has been very well received."
Asked about other key growth plans, the Pinewood CEO said: "We have a growing ability to participate in film financing, and we would like to do more of it."