A leading provider of services to the global film ... - Pinewood Studios


A leading provider of services to the global film ... - Pinewood Studios

Pinewood Shepperton plc“A leading provider of services to the global filmand television industry”Business Overview and Results27 June 20131

AGENDA1. Company Overview and Strategy2. Market Drivers3. Operations• Film• Television• Media Hub• Growth Initiatives• International• International Growth Initiatives• Media Investment - Pinewood Media4. Financial Review for the year ended 31 March 20135. Summary3


1.1 COMPANY OVERVIEW• Europe’s largest provider of stage andstudio space for film and television• UK Studios - 150 acres with 1.5m sq ftof built area and 110 acres of greenbeltland adjacent to Pinewood Studios• 34 stages and 3 television studios in theUK excluding TeddingtonBreakdown of Revenue for yearended 31 March 2013TV£5.2 mMedia Hub£6.3mMediaInvestment£8.9m• Television - HD investment at PinewoodStudiosFilm£35.2m• Media Hub comprises tenanted spaceforming cluster of creative industries• International – targeted expansionleveraging the brand• Media Investment (Pinewood Media) –provides funding and services to UK Filmand Television productions5

1.2 COMPANY OVERVIEW – STRATEGYFocused growth strategy• Operational growth- Increase in capacity through the PSDF- Transformational television investment programme• Property development- Media Hub expansion demand led only – not speculative- Development of existing site and adjacent land to give step change infacilities – PSDF, Public Inquiry in November 2013• Leveraging the brand- Selective international growth through JVs- Co-investment in independent UK film- Management of third party film funds6


2.1 MARKET DRIVERSFilm - a growing international market• Pinewood is competing in a global market• Global box office for all films released in each country around the world reached $34.7 billion in 2012,up 6% over 2011’s total. It is projected to increase 5.2% per annum between 2013 ($36.0m) – 2017($44.4m). (1)• Chinese box office ($2.7 billion) grew by 36% in 2012 to become the world’s second biggest theatricalmarket, after the US. (1)• International box office is up 32% over five years ago, driven by growth in various internationalmarkets, including China, Russia and Brazil (1)• Fiscal incentives play key role in UK film market (in place until at least end of 2015)• UK inward investment spend was £56.1 million, up from £54.3 million in Q1 2012 (2)Television – ongoing demand for creative content• Spend on content by all UK TV channels in 2011 reached £5.5bn – up 1.6% year on year (2010:£5.4bn) *• UK television industry revenue £12.3bn in 2011 (2010: £11.7bn) *• UK Government has introduced tax relief for high-end television• BBC reducing Television Centre• Increasing demand for large studio based facilitiesMedia Hub– the appeal of creative hubs continues• Consistent demand from screen based industry tenants81: Source: PricewaterhouseCoopers Global Entertainment and Media Outlook 2013-20172: Source: Film Production in the UK – Q1 2013, BFI Research and Statistics Unit* 2012 figures not yet available


Fox3.1 FILM• Film– Hire of stage space– Provision of ancillary services– Digital Content Services– International• Film revenues of £35.2m for the year(15 months to 31 March 2012: £43.4m)Prometheus - © 20 th Century Fox• A leading facility in an international market• Premier and unique facilities• Digital Content Services– Cost efficient digital production– Preservation, restoration and archive services– International language versioning– Original sound post production– Audio booksThe Muppets... Again! – © Walt Disney StudiosThor: The Dark World - © Walt Disney Studios10

3.2 TELEVISION• TV– Studios fully equipped with HD equipment– Flexible stages for light entertainment– Filmed drama– Provision of ancillary services– TV3 under construction• Revenues of £5.2m for the year (15 months to 31March 2012: £10.2m) – note studios closed forrefurbishment for 4 months of FY13The Voice UK – © BBC One• Top three player in the UK television facilitiesmarket• Provide a full service offering and the flexibility oflarge studios• UK TV market now experiencing growth in keygenresNot Going Out - © BBC One11• Demand for larger audience television shows, e.g.The Voice• New fiscal incentives for high end TV – attraction forUK / overseas production companiesGot To Dance – Justin Downing © Sky 1 HD 2013

3.3 MEDIA HUB• Media HubRental of property on formal leases• Revenues of £6.3m for the year (15 months to 31March 2012: £8.0m)• Integral part of the creative industries cluster:– Broad service offering– Bespoke tenanted space– Rental rates performing wellPinewood Data Centre• 97% occupancy using 360,000 sq ft of existing space(92% occupancy in 15 months to 31 March 2012)12

3.4 GROWTH INITIATIVESRecent growth initiatives include:• Q stage - £7.5m 45,000 sq ft, flexible use, studiofacility at Pinewood Studios under construction• Multimillion pound investment programme - digital and HD TVfacilities, including new TV3 for National Lottery• PSDF – appealed and public inquiry expected November 201313HD TV gallery at Pinewood StudiosQ stagePSDF application

3.5 INTERNATIONAL• Incremental and diversified income stream utilisingexisting skills and experience• Create opportunities with appropriate partners andminimal capital commitment by leveraging Pinewood brand• Target strategic, regional and growth areas• Reviewing other potential growth opportunitiesPinewood Toronto StudiosPinewood Iskandar Malaysia StudiosPinewood Studio Berlin Film ServicesPinewood Indomina Studios14

3.6 INTERNATIONAL GROWTH INITIATIVES• AtlantaJoint venture to develop 288 acres of landsouth of Atlanta into world class studiofacilities. Pinewood has a 40%shareholding in the joint venture.• ChinaThe “Song Lin” joint venture will assess anumber of business proposals in thegrowing entertainment market in China.Pinewood has a 50% shareholding in thejoint venture.15

3.7 MEDIA INVESTMENT – PINEWOOD MEDIA• Revenues of £8.9m for the year(15 months to 31 March 2012: £1.4m)• Pinewood Pictures (IOM £25m MediaDevelopment Fund)• New film investment- Low capital risk- Benefits facility utilisation- Accounting treatment results in a lossconsolidated at the PBT levelBelle © David ApplebyDom Hemingway – © Nick Wall16


4.2 FINANCIAL REVIEW – CASH FLOW12 months to31 March15 months to31 March12 months to31 Dec£m 2013 2012 2010EBIT (inc MI) 8.4 13.2 9.1Share based payments - 0.2 0.2Depreciation 4.8 4.7 3.8Working capital 1.2 (0.1) 4.6Other (0.9) (1.8) (0.1)Operating cash flow 13.5 16.2 17.6Operating cash conversion 161% 123% 193%Interest paid (3.5) (4.1) (3.0)Tax received/(paid), net 0.9 (3.0) (1.9)Lifecycle Capex (3.8) (3.7) (3.0)Free cash flow 7.1 5.4 9.7Expansionary Capex (5.8) (12.5) (3.7)Dividend (0.2) (1.2) (1.6)Other - - (0.5)Net cash flow before financing 1.1 (8.3) 3.9Financing (2.0) 8.2 (2.5)Net (decrease)/increase in cash (0.9) (0.1) 1.419Net debt (44.7) (50.4) (42.7)

4.3 FINANCIAL REVIEW - BALANCE SHEETBalance SheetAssets31March31March31Dec£m 2013 2012 2010Property, plant and equipment 125.8 119.6 115.4Investment property 6.1 6.2 6.4Intangible & long term assets 6.0 5.9 5.9Current assets 9.2 7.6 8.3TOTAL ASSETS 147.1 139.3 136.0Equity 80.1 73.1 75.1LiabilitiesLoans and borrowings 44.7 50.9 43.2Deferred tax 0.7 1.2 1.3Loans and borrowingsExisting committed bank facilities expire in November 2016.Utilised Facilities£m £mRCF 15.0 35.0Term Loan 15.0 15.0Overdraft 0.5 5.0Asset financing 2.6 2.6Other, net (0.4) -32.7 57.6Share of SSPP loan (50%) 12.0 20.044.7 77.6Current liabilities 21.6 14.1 16.4TOTAL EQUITY &LIABILITIES 147.1 139.3 136.0Gearing 56% 68% 56%Interest Cover 2.6x 2.9x 2.8x20


5. SUMMARY• Developing additional services to complement core activities in the UKand overseas e.g. Digital Production Services;• Significant development and expansion proposals in the UK e.g. QStage, TV3, Camelot building and PSDF;• Positive start to 2013-14 across all revenue streams with highutilisation in film and television facilities.22

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