Film studio Pinewood Shepperton reported disappointing financial results on Tuesday, blaming the UK film tax uncertainty of the past year and the overall downturn in UK film production.
Pinewood Shepperton said that operating profits were down 70% last year, from £6.4m in 2004 to £571,000 last year. Profits fell from £11.3m to £3.7m.
Chief executive Ivan Dunleavy said the 2005 performance was "in line with market expectations."
Film revenue dropped 30% from £26.2m to £18m, with that blow somewhat softened by the 32% rise in TV revenue from £6m to £8.9m. The TV business was boosted by the company's acquisition of Teddington Studios.
"Trading conditions, particularly for the first half of 2005, were challenging, resulting principally from our film customers' uncertainty, now resolved, over the outcome of the Government's review of UK film fiscal policy," said chairman Michael Grade.
With the new UK tax laws further clarified by the government last week, Pinewood said that it expects its business to rebound. Dunleavy said, "We and the rest of the industry can now look forward with greater confidence and clarity."
The company said: "As the legislation moves closer to being finalised, we are seeing film customer confidence returning. We expect revenues in the first half of the year to be ahead of the comparable period for 2005 and further, that revenues will return to normal levels in the second half of the year, in line with market expectations."
The studio's feature film business started to come back in the second half of 2005 with shoots for The Da Vinci Code, Children of Men, and Stormbreaker.
Grade noted, "As anticipated, film revenue during the latter part of the year improved and made an important contribution to the full year's results."
There are several large films shooting at Pinewood Shepperton now and in coming months, such as Kenneth Branagh's opera adaptation The Magic Flute, Matthew Vaughn's fantasy epic Stardust, and the new James Bond film, Casino Royale.