Half Yearly Report

Pinewood Shepperton plc

Interim Results for the six months ended 30 September 2014

Pinewood Shepperton plc ("the Company"), a leading provider of services to the global film and television industry, today announces its unaudited interim consolidated results for the six months ended 30 September 2014.

Key developments during the period

· Secretary of State for Communities and Local Government allowed the Company's appeal and granted planning permission for the Pinewood Studios Development Framework ("PSDF").

· Film finance provided to two further British independent film productions.

· Pinewood Creative was launched on 18 September 2014 at Pinewood Studios, developed from the original Wood Mill to offer a full range of services to film and television productions.

Key developments after the period end

· A joint venture, Pinewood MBS Lighting Limited, was established tobecome the exclusive provider of lighting to productions based at Pinewood Studios and Shepperton Studios.

· The detailed design of the first phase of the PSDF was submitted to South Bucks District Council. 

· Pinewood Atlanta Studios Phase 2 development has commenced construction, incorporating five additional sound stages and related facilities

Financial highlights for the six months ended 30 September 2014

· Revenue: £38.5m (six months ended 30 September 2013 restated: £36.2m).

· Profit after tax: £3.8m (six months ended 30 September 2013: £3.4m).

· Basic earnings per share: 7.7p (six months ended 30 September 2013: 6.8p).

· Revenue from Media Services activities, including intersegment revenue: £27.0m (six months ended 30 September 2013 restated: £25.5m).

· Operating profit from Media Services activities, excluding intersegment profit and exceptional items: £6.1m (six months ended 30 September 2013 restated: £5.1m).

· Interim dividend declared: 0.7p per share (six months ended 30 September 2013: 0.6p).

· Net debt of £31.8m (30 September 2013 restated: £41.4m).

Commenting on today's results, Ivan Dunleavy, Chief Executive, said:

"These results reflect continued growth operationally and strategically for the long term. I am delighted the Company continues to make such positive progress notwithstanding the pressures in the wider economy."

A copy of this announcement will shortly be available for inspection on the Company's website at www.pinewoodgroup.com

* Certain of the prior year comparatives have been restated due to an early adopted mandatory change in accounting policy for the Group's joint ventures. See Note 5 for further details.

Enquiries

Pinewood Shepperton plc +44 (0)1753 656732

Andrew M. Smith

Director of Strategy and Communications and Company Secretary

N+1 Singer +44 (0)207 496 3000

Richard Lindley / James White

Notes to editors

· Pinewood Shepperton plc is Europe's largest provider of stage and studio space

· Pinewood and Shepperton Studios together accommodate 34 stages, five dedicated digital television studios and five digital presentation 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 and television production as part of its growing range of services

· Pinewood and Shepperton Studios have been home to over 2,000 films in more than 75 years

· Pinewood and Shepperton Studios have hosted over 600 TV shows

· There are over 240 independent, media related companies based at Pinewood and Shepperton's Media Hub

· The Pinewood Group's international network of Studios includes Toronto, Canada; Berlin, Germany; Iskandar, Malaysia; the Dominican Republic; Atlanta, Georgia, USA and activities in China

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.

Prior year restatement

During the year ended 31 March 2014, the Company changed its accounting policy relating to joint ventures due to the early adoption of certain new mandatory accounting standards (see Note 5 for further details). This has necessitated a restatement of the primary financial statements and certain related notes for the comparative period, namely the six months ended 30 September 2013. There has been no impact on the profit after tax for either period.

Business model

Pinewood Shepperton plc is a leading provider of services to the global film and television industry. Our services support film production, filmed television and studio television recording, digital content services and facilities for media related business ("Media Hub").

The Group's unique selling point is the breadth of production related facilities and services available 'on the lot' which provides clients with a full service offering.

The Company currently has two reporting segments - Media Services, which provides studio and related services to the film, television and screen-based industries; and Media Investment, which provides investment funding and production services to the film, television and wider 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 provide production facilities to clients, Digital Content Services ("DCS") and International.

DCS offers picture and sound post production, media storage, management and distribution for original English language and internationally re-versioned content.

International operations, which leverage the Pinewood brand, include providing international sales, marketing operations, studio development and consultancy services, in Canada, the Dominican Republic, Malaysia and China plus joint ventures in the United States of America and China.

The Company's television business provides a range of unique 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 television studios, film stages and post production services to support all forms of television production.

The Media Hub is currently home to 241 independent businesses representing and providing expertise, equipment and support to the screen-based industries. These companies come together to form a unique cluster and centre of excellence for the entire creative industry.

The Media Investment segment (known as "Pinewood Pictures") includes an agreement to source and advise on film and high-end television investment opportunities for two media development funds; a £25m fund established by the Isle of Man Treasury ("IOMT") 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 high end television productions.

Objectives and Strategy

The Group's mission is to:

• Continue to create the UK's leading film, television and media destination;

• Enhance our brand heritage;

• 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;

• Investment in digital activities; and

• Joint marketing with other service providers.

• Property development:

• Increase overall capacity through the Pinewood Studios Development Framework ("PSDF");

• Demand-led Media Hub expansion to limit speculative risk; and

• Investments in infrastructure.

• Leveraging the brand:

• Selective international growth through joint ventures with limited capital commitment;

• Film investment; 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:

Media Services review

Total revenues within this segment were £27.0m for the period (six months ended 30 September 2013 restated: £25.5m), including £0.6m of intersegment revenue (six months ended 30 September 2013: £0.5m). 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 £22.5m (six months ended 30 September 2013: £19.6m), an increase year on year of 15.2%. The increase is in due to high stage utilisation across existing facilities, however the ongoing strong film demand has limited television occupancy opportunities in the period.

The demand for the Company's facilities throughout the period has been exceptionally strong, as reflected in stage occupancy of 86% (six months ended 30 September 2013: 72%).

The largest film production based at Pinewood Studios during the period was Star Wars: Episode VII: The Force Awakens (Lucas films) and the largest production at Shepperton Studios was Avengers: Age of Ultron (Marvel).

Other major productions which were based at Pinewood and Shepperton during the period include Tulip Fever (Ruby Films, The Weinstein Company), Alice in Wonderland: Through the Looking Glass (Disney) and Esio Trot (BBC, Endor).

DCS revenues included within the total film revenue for the period have remained largely consistent with the prior period at £3.6m (six months ended 30 September 2013: £3.7m).

Notable sound post production work completed during the period included Cinderella (Disney), Roger Waters - The Wall (Rue 21) and Trash (O2 Films/PeaPie Films/Working Title Films).

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.

The Company was announced as a finalist in the Service Provider - Best Audio Supplier category at the TIGA Games Industry Awards, 2014, reflecting the Group's growing reputation in the gaming content development industry.

Pinewood Creative was launched on 18 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.

InternationalInternational revenues for the period included within film were £1.8m (six months ended 30 September 2013: £0.5m) and relate to sales and marketing agreements in Toronto, Malaysia and Dominican Republic, with the increase driven by the newly operational Pinewood Atlanta Studios plus consultancy services provided in China.

Pinewood Atlanta Studios

Pinewood Atlanta Studios Phase 1 is now on stream with six sound stages totalling 118,000 sq ft, production facility accommodation of 200,000 sq ft and workshops of 90,000 sq ft. Marvel's Antman was the first production to use the facilities.

Media Hub tenant facilities continue to attract interest, with Home Depot and Hertz being key tenants now open for business on the studio lot.

China

Pinewood's consultancy with The Dalian Wanda Group for the Qingdao Oriental Movie Metropolis development commenced in February 2014 and a proposed master plan with associated analysis has now been presented. It is anticipated that construction will commence in 2015 with the studio complex scheduled to open in 2017.

Television

Television ("TV") revenues for the period were £1.7m (six months ended 30 September 2013: £3.2m). The decrease is due to the ongoing wind down of operations at Teddington, reduced facility availability due to high film occupancy and a reductionin TV production due to certain shows not being re-commissioned. In response to the final point, the Company is actively marketing a wider broadcast network and has already won additional shows with a broadcaster that has not used the Pinewood facilities before.

Pinewood TV studios have hosted a number of new productions such as Birds of a Feather (Freemantle Media) and Count Arthur Strong (Freemantle Media), alongside repeat business from shows including Keith Lemon: Through the Keyhole (Talkback) and The National Lottery Live (Camelot). Although large stage availability has been limited for television, Weekend Kitchen with Waitrose (Spun Gold) is broadcast live from a small film stage at Pinewood utilising the technical infrastructure of TV3.

The Group is on target to complete its exit and handover of Teddington Studios by 24 December 2014.

Media Hub

Media Hub revenues inclusive of service, utility and facility charges for the period were £2.8m (six months ending 30 September 2013 restated: £2.8m).

The total number of Media Hub companies accommodated at the end of the period was 241 at Pinewood and Shepperton Studios with occupancy of 97% across a net lettable area of 362,000 sq ft (six months ended 30 September 2013: 229 companies, 97% occupancy, 349,000 sq ft).

Gross and operating margins

The Media Services segment gross margin, excluding intersegment revenues, for the six months ended 30 September 2014 is 41.9% (six months ended 30 September 2013 restated: 39.1%). The year on year variance is principally driven by the revenue mix with strong film stage performance.

The Media Services operating margin before exceptional items is 23.1% (six months ended 30 September 2013 restated: 20.4%).

Exceptional expenses

The Group discloses as exceptional items on the face of the income statement those items of expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate disclosure to allow users of the financial statements to better understand the elements of financial performance in the year, so as to facilitate comparison with prior periods and to better assess trends in financial performance.

Group reorganisation

The Group incurred exceptional reorganisation costs of £0.1m in the prior period in relation to the restructuring of certain business areas. No such costs have arisen in the current period.

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, as a percentage of average capital employed, being total equity plus interest bearing loans and borrowings, which for the six months ended 30 September 2014 was 9.3% (six months ended 30 September 2013 restated: 7.7%).

The ROCE year on year increase is principally driven by much of the significant capital investments made in previous periods starting to generate earnings.

Media Investment review

Segment revenue for the period was £12.1m (six months ended 30 September 2013: £11.2m).

Investment advisory 

The combined advisory investment funds advised by the Company total £55m making them a significant investment portal for British film and television content and providing the opportunity for the Welsh (£30m) and Isle of Man (£25m) Governments to co-invest in future productions, such as Take Down, where £6.4m was jointly invested following advice from Pinewood Pictures.

Investment advisory revenue for the period was £0.4m (six months ended 30 September 2013: £0.2m) with the year on year increase due to the commencement of the Welsh investment advisory agreement in March 2014.

In addition to investments made by third party funds in Take Down, the Group also provided film finance totalling £1.0m to its wholly owned subsidiary film production companies (six months ended 30 September 2013: £1.1m).

During the period the Company recouped £0.1m against film investments made to date (six months ended 30 September 2013: £nil). The recoupment revenue has been generated from the theatrical releases of Belle and Dom Hemingway.

Film production companies

Revenue from film production companies ("FPCs") for the period totalled £11.6m (six months ended 30 September 2013: £11.1m). An FPC is considered active from the close of film financing until the production is completed and delivered.

A number of Pinewood Pictures film productions have featured at key international film festivals such as Riot Club at the Toronto International Film Festival and Robot Overlords at the BFI London Film Festival.

The operating loss from FPC activity of £2.8m (six months ended 30 September 2013: £2.3m) is largely offset by UK film tax relief of £2.6m (six months ended 30 September 2013: £2.4m) as expected.

Included in the Group cash balance of £8.5m is £4.3m (six months ended 30 September 2013: £0.8m) restricted solely for use in the production of specific FPC operations. The Group trade receivables balance of £12.3m includes £8.0m (30 September 2013: £1.5m) consolidated from FPC activities whilst the Group trade and other payables balance of £37.9m includes £14.0m (30 September 2013: £5.5m) from FPCs. The increase year on year on the FPC related balances is largely due to the stage of completion of new productions.

Loss after tax

Results for the Media Investment segment are more meaningfully reviewed at the after tax level.

Loss after tax for the segment is £0.3m (six months ended 30 September 2013: £0.1m profit) due to only one project being advised on.

Group performance

Total consolidated revenue for the period is £38.5m (six months ended 30 September 2013 restated: £36.2m).

Profit after tax for the period ended 30 September 2014 was £3.8m (six months ended 30 September 2013: £3.4m).

Basic and diluted earnings per share for the period were 7.7p (six months ended 30 September 2013: 6.8p). Normalised basic and diluted earnings per share for the period after adjusting for exceptional items were7.7p (six months ended 30 September 2013: 6.9p).

EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation) for the period was £5.6m (six months ended 30 September 2013 restated: £4.6m), including £3.6m of Media Investment loss (six months ended 30 September 2013: £2.7m loss).

Taxation

The total corporation tax credit for the period, based on profit before tax of £1.8m, was £2.0m (six months ended 30 September 2013: £1.8m credit).

The corporation tax credit for the period includes £2.6m of UK film tax relief for film production companies (six months ended 30 September 2013: £2.4m) which reflects the accounting treatment of the Group's FPCs and largely offsets the operating loss from Media Investment in respect of FPCs.

The underlying rate of tax on profit before accounting for UK film tax relief from FPCs, prior year adjustments and exceptional items is 21% (six months ended 30 September 2013: 23%).

Liquidity management

The Company's cash balance increased by £7.7m during the period, which includes £3.6m relating to FPC activity that is not available for general business operations. The main drivers of this increase are a £1.0m increase in EBITDA and a favourable working capital movement of £8.9m. The working capital movement includes £3.6m relating to the consolidation of FPCs and is for restricted use. The favourable movement is also attributable to an increase in deferred income of £1.8m in the period largely due to contractual payments in advance from forthcoming productions. General Media Services payables and VAT have increased by £2.3m largely due to timing and improved supplier credit terms.

Capital expenditure has decreased from £12.9m in the comparative six month period to £2.4m as a number of large scale investment projects have been completed. This has also had an impact on the cash flows from financing which saw an £11.5m inflow in the prior six month period compared to a £0.8m outflow in the current period. The Company has invested a further £1.7m (six months ended 30 September 2013: £0.1m) in its Pinewood Atlanta Studios joint venture as part of the Phase 1 development of the studio.

The improvement in cash position has had a positive impact on net debt and gearing. At 30 September 2014 net debt was £31.8m although this included £4.3m of restricted FPC cash. Excluding this amount, net debt stood at £36.1m (30 September 2013: £41.4m including FPC cash; £42.1m excluding FPC cash). Gearing has decreased from 48.3% at 31 March 2014 to 36.9% at 30 September 2014, excluding fair value and loan issue costs.

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 recommended a interim dividend of 0.7p (six months ended 30 September 2013: 0.6p).

The dividend is to be paid on 9February 2015 to shareholders on the register at close of business on 9 January 2015 (ex-dividend date of 8 January 2015).

Going concern

Having considered the performance of the Group for the period to 30 September 2014 above and future developments outlined below 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 and an overdraft facility in place until November 2016. The overdraft is subject to an annual review. Although the Group is in a net current liability position of £10.8m, the Group has £25.5mof undrawn committed loan facilities in place. The Group also has £9.2m of asset financing 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 Group also has a strong brand and reputation in the marketplace with a wide 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

Pinewood Studios Development Framework

Since the Company was granted outline planning permission for the PSDF on 18 June 2014, management has been developing the detailed design of the first phase. On 15 October 2014 the Company submitted these detailed plans to South Bucks District Council for approval. 

The initial phase will comprise five stages, ten workshops, production offices and associated infrastructure and landscaping.

Subject to approval of the detailed design, construction work on the first phase is expected to commence in the first quarter of 2015, with occupation in early 2016. The addition of the PSDF first phase buildings and backlot to the existing facilities will significantly expand the Group's overall capacity to accommodate major feature films, television programmes, commercials and other screen-based productions at Pinewood Studios.

Pinewood Atlanta Studios

Construction of Phase 2 has commenced and incorporates a further five sound stages totalling 100,000 sq ft, 28,000 sq ft of production accommodation and 62,000 sq ft of workshops. The development will be funded principally from bank financing alongside existing cash resources within the business, with any shortfall to be funded by the partners in their equity holding proportions. The facility is expected to be operational by June 2015.

Pinewood Studio Wales

The development of Pinewood Studio Wales continues at Wentloog Cardiff Bay with the facility due to become fully operational from January 2015. The Studio will primarily be utilised to attract high end television drama and will be marketed in conjunction with the Welsh Government's Media Development Fund.

Pinewood MBS Lighting

On 14 October 2014 the Group entered into a joint venture, Pinewood MBS Lighting Limited, with MBS3, the company behind the Los Angeles based Manhattan Beach Studios and MBS Equipment Company.

Pinewood MBS Lighting launches 1 January 2015, and will become the exclusive provider of lighting to productions based at Pinewood and Shepperton Studios. Upon launch the Company will have a 15% shareholding in the joint venture.

INDEPENDENT REVIEW REPORT TO PINEWOOD SHEPPERTON 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 2014 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 19. 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 2014 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

24 November 2014

Condensed group income statement for the six months ended 30 September 2014

* Please see Note 5 Interests in joint ventures for further details of the prior period restatement.

 Condensed group statement of other comprehensive income

for the six months ended 30 September 2014

Condensed group statement of financial position as at 30 September 2014

The financial statements of Pinewood Shepperton plc, Company number: 03889552, were approved and authorised for issue by the Board of Directors on 24 November 2014 and are signed on its behalf by:

Christopher Naisby, FCCA

Finance Director

* Please see Note 5 Interests in joint ventures for further details of the prior period restatement.

Condensed group statement of cash flows for the six months ended

30 September 2014

Included in the cash balance is £4,347,000 which is unavailable for general use (six months ended 30 September 2013: £777,000) (Note 13).

* Please see Note 5 Interests in joint ventures for further details of the prior period restatement.

Condensed group reconciliation of movement in net debt

for the six months ended 30 September 2014

* Please see Note 5 Interests in joint ventures for further details of the prior period restatement.

Condensed group statement of changes in equity

From 1 April 2013 to 30 September 2014

Notes to the condensed group consolidated financial statements at 30 September 2014

1. Authorisation of financial statements and statement of compliance with IFRS

The unaudited interim condensed Group financial statements of Pinewood Shepperton plc for the six months ended 30 September 2014 were authorised for issue by the Board of Directors on 24 November 2014 and the statement of financial position was signed on the Board's behalf by the Finance Director. Pinewood Shepperton 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 2014 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 2014, 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 2014, 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 2014. Although the Group is in a net current liability position of £10.8m, the Group has £25.5m of undrawn committed loan facilities in place. The Group also has £9.2m 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 2014, with the exception of newly applicable standards effective for annual periods beginning on or after 1 January 2014, 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 19 "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 2014 and 30 September 2013 (restated) is presented below:

During the period, the Group provided film finance totalling £969,000 to its wholly owned subsidiary film production companies for the production of Take Down and Genius (six months ended 30 September 2013: £1,135,000 for Robot Overlords, Riot Club and Pressure).

4. Exceptional charges

The Group incurred exceptional reorganisation costs of £58,000 in the prior period in relation to the restructuring of certain business areas. No such costs have arisen in the current period.

5. Interests in joint ventures

The Group has interests in the following joint ventures:

Shepperton Studios Property Partnership

The Group has a 50% interest in Shepperton Studios Property Partnership ("SSPP"), an entity controlled jointly with a third party, Aviva Group, which holds a 995 year lease on the Shepperton Studios property.

During the period the Group received distributions of £513,000 from SSPP (six months ended 30 September 2013: £542,000).

Shepperton Studios (General Partner) Limited

The Group also has a 50% interest in Shepperton Studios (General Partner) Limited. There are no material amounts consolidated for this joint venture in either period.

Pinewood Atlanta LLC / PAS Holdings Fayette LLC

Pinewood Atlanta Limited has entered into a 40:60 joint venture with River's Rock LLC to develop land south of Atlanta, Georgia, USA into world class studio facilities. The Group also provides sales and marketing services. The Group has a 50% voting interest in the joint ventures. Pinewood Atlanta LLC and PAS Holdings Fayette LLC are strategic to the Group's business given the similarity in nature to the Group's core Media Services operations.

Following the adoption of IFRS 11 during the year ended 31 March 2014, all joint ventures are now measured using the equity method. None of the joint ventures are listed and therefore quoted market prices are not available.

The table below illustrates the impact on the income statement, statement of financial position and cash flow statement upon the adoption of IFRS 11 arising from the transition from proportional consolidation to the equity method of accounting for joint ventures. In accordance with the transitional provisions of IFRS 11, this information is given for the comparative period only.

Reconciliation of movement in investment in joint ventures:

6. Taxation

The current corporation tax credit for the period, arising on profit before tax of £1.8m, was £2.0m (six months ended 30 September 2013: £1.8m credit). The corporation tax credit for the year includes £2.6m of UK film tax relief (six months ended 30 September 2013: £2.4m) which reflects the accounting treatment of the Group's FPCs and offsets the operating loss from Media Investment in respect of these FPC's.

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 21% (six months ended 30 September 2013: 23%).

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 2014 is:

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.

The following reflects the profit and number of shares generating the basic and diluted earnings per ordinary share computations:

Dividends paid

The final dividend for the year ended 31 March 2014 was paid on 6 October 2014.

The Board of Directors approved and declared an interim dividend of 0.7p per share for the year ended 31 March 2015 on 24 November 2014. The dividend is to be paid on 9 February 2015.

8. Share capital and reserves

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.

Authorised

Issued, called up and fully paid

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

* Please see Note 5 Interests in joint ventures for further details of the prior period restatement.

Assets under construction at 30 September 2014, £4,150,000, relate to costs capitalised under the Pinewood Studios Development Framework. These are not depreciated.

The Group's long term loan is secured by a floating charge over the Group's assets.

10. Investment property

Investment property is stated at depreciated cost excluding the day to day expense of servicing the property. At 30 September 2014, the Group's investment property had a carrying value of £5.9m (30 September 2013: £6.0m).

11. Intangible assets

The goodwill of £5.6m (30 September 2013: £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 2014 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 2014.

12. Trade receivables

13. Cash

Included within the cash 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:

14. Trade and other payables

15. Commitments and contingencies

Capital commitments

At 30 September 2013, the Group had capital commitments contracted but not provided for totalling £594,000 in relation to Q Stage, TV3 and energy infrastructure upgrades. At 30 September 2014, there are no capital commitments.

Guarantees

At 30 September 2014, the Group had guarantees in place, in the form of documentary credits, totalling £155,000 (30 September 2013: £155,000) in relation to certain Section 278 highways related infrastructure which have not been provided for.

16. Provisions

Teddington Studios Limited previously exercised an option to terminate its leasehold interest in Teddington Studios on 24 December 2014. During the year ended 31 March 2013, the Group determined the lease on the Studio to be an onerous contract. The provision for onerous lease contracts represents the present value of the future lease payments and unavoidable costs that the Group is presently obliged to make under the non-cancellable onerous operating lease contract for Teddington Studios, less net revenue expected to be earned on the lease from tenants and productions. The estimate may vary as a result of changes in the utilisation of the leased premises. The provision will be fully utilised during the year ended 31 March 2015.

The movement in the provision for the six months ended 30 September 2014 is as follows:

17. Financial risk management, objectives and policies

The financial risk management, objectives and policies of the Group are disclosed in Note 28 of the Group's Annual Report and Accounts for the year ended 31 March 2014.

Fair values of financial assets and liabilities

As at 30 September 2014, 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 2014, the total interest rate instruments outstanding were for principal amounts totalling £22.5m. The contracts mature in November 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 £0.2m in the condensed balance sheet. Any movements in the fair values of the contracts are recognised in the income statement.

18. Related party disclosures

The unaudited interim consolidated financial statements include the financial statements of Pinewood Shepperton plc, its subsidiaries and its interests in the joint ventures listed in the following table.