Pinewood Shepperton has blamed uncertainty over UK film taxpolicy and the weak US dollar for disappointingfirst-half results.
The studio reported today that pre-tax losses for the firstsix months of 2005 were £108,000 compared with £1.63m for the same period lastyear. Revenues tumbled from £20.4 million to £13.3 million.
Pinewood chief executive Ivan Dunleavy said that it had beendifficult to convert provisional film bookings into contracts in the first halfof the year. This was "principally dueto the protracted uncertainty over future UK film fiscal policy and to a lesserextent the adverse dollar/sterling exchange rates," he said.
Thestudio pointed out that the results reflected a broader picture of reduced filmproduction investment in the UK in the first half of 2005. It said that overallUK production spend halved to £335m compared to £668m in the same period of2004.
Pinewood said that "only two significant Hollywoodproductions" shot in the UK in the first half, both of which are being servicedat Pinewood Shepperton: The Da Vinci Code and Basic Instinct II. It added that 36 films overall beganshooting in the UK during the period.
The studio said that the "protracted process" of theGovernment's formal consultation on UK film tax incentives will continue toimpact trading for the rest of 2005 and into 2006.
Pinewood Shepperton chairman Michael Grade commented: "We welcome the Government's commitment to continuingfiscal incentives for the UK film sector, and the fact that the issue is now onits way to a positive resolution. Inevitably, some uncertainty will remainwhile the details are finalised, expected by the Spring of 2006.
He added: "The Board believesthe disappointing results for the first half do not indicate any fundamentalshift in the film production business as a whole. Our strategy thereforeremains unchanged and the Board remains confident in the long term prospectsfor the group."