Interim Results for the 6 months ended 30/09/12

Pinewood Shepperton plc

Interim Results for the six months ended 30 September 2012

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 2012. The Company is delivering its first unaudited interim results following a change in its accounting reference date from 31 December to 31 March. Comparative information is therefore for the six months ended 31 December 2011.

Key developments

·; Commenced site clearance at Pinewood for a new 45,000 sq ft studio facility.

·; An agreement with the Isle of Man Treasury to source and advise on film investment opportunities for its £25m fund was signed on 25 October 2012.

·; Digital television upgrade programme completed and operational.

Financial highlights for the six months ended 30 September 2012

·; Revenue £27.1m (six months ended 31 December 2011: £24.6m).

·; Operating profit before exceptional items £6.1m (six months ended 31 December 2011: £3.7m).

·; Profit before tax £3.0m after exceptional items (six months ended 31 December 2011: £5.4m loss).

·; Basic earnings per share 4.2p (six months ended 31 December 2011: 11.4p loss)

·; Interim dividend of 0.5p per share declared (six months ended 31 December 2011: nil).

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

"Current trading is positive with a high level of contracted revenues for the remainder of the current financial year."

"The number of film productions contracted so far for next year is encouraging and the Board looks forward to the future with confidence."

"The Company is delighted to welcome Ruth Prior who has joins the Board on 27 November as an Independent Non-Executive Director."

Enquiries

Richard Lindley/Sandy Fraser

Notes to editors

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

·; Pinewood Shepperton plc provides finance to UK film and television production.

·; Pinewood, Shepperton and Teddington 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.

·; Pinewood Studios has Europe's largest green screen.

·; Pinewood and Shepperton Studios have been home to over 1,500 films in the last 76 years.

·; Pinewood, Shepperton and Teddington Studios have hosted over 600 TV shows.

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.

Group Overview

MEDIA SERVICES

The Media Services segment has principally three complementary revenue streams - Film, Television and Media Park.

Film

Film revenues for the six months to 30 September 2012 ("the period") were £18.8m (six months ended 31 December 2011: £16.4m).

Following a record level of film production spend in the UK of £1.1 billion in 2011, which resulted in the UK film industry contributing £4.6 billion to UK GDP, the demand for premium stage space and production facilities has continued. This was, as predicted, further evidenced during the period with high utilisation rates of the Company's facilities. Our lack of capacity resulted in potential customers having to use other studios. In the light of the continuing and future demand for its facilities, the Board approved the building of a new £6.9m, 45,000 sq ft studio facility at Pinewood Studios on 24 September 2012.

The largest film production based at Pinewood Studios during the period was Maleficent (Disney) and the largest production at Shepperton Studios was Thor: The Dark World (Marvel). Productions which used the Company's facilities and services during the period included Les Misérables (Working Title/Universal), the latest Jack Ryan film Maryland (Paramount), Fast and Furious 6 (Universal), Kick Ass 2 (Marv Films/Kick Ass 2 Productions) and the 23rd James Bond film Skyfall (Eon Productions/MGM/Sony Pictures).

The Company generated Digital Content Services ("DCS") revenues during the period of £3.0m (six months ended 31 December 2011: £3.5m) which are included in the Film and Television revenues quoted and reflect the evolving business model.

DCS provides sound and picture post production, media storage, management and distribution for original English language and internationally re-versioned content. During the period a wide variety of creative and process-based services were delivered to film, television and video games clients. In addition, complete service packages - incorporating stages, sound & picture post production and digital laboratory services for both 2D and 3D content - were delivered to the BBC's latest series of Would I Lie to You, the episodic period drama Paradise, a notable Hollywood blockbuster and to three Pinewood-backed films.

 International re-versioning of soundtracks and the renewed long-term agreement with Disney Character Voices International continued to perform well, as did similar services delivered to most major film studios.The preservation and restoration of a number of significant archive features was carried out during the period; including the classic Ealing Film Man in a White Suit, the Hammer horror Dracula: Prince of Darkness and the 1966 Rolling Stones documentary Charlie is my Darling.Building on the DCS offering, the Company invested in the new Dolby® Atmos™ system - a significantly enhanced surround sound experience to that delivered by traditional 5.1 and 7.1 cinema. The first installation in the UK was made at the Powell Theatre at Pinewood. The Korda Theatre at Shepperton is set to follow in January 2013.

International

International film revenues for the period were £0.5m (six months ended 31 December 2011: £0.5m).

The Company has a sales and marketing agreement with Pinewood Toronto Studios. During the period, the Studios attracted a number of high profile film and television productions which included Robocop (MGM), Carrie (MGM) and Wolves (Copperheart Entertainment). Construction of Pinewood Iskandar Malaysia Studios has commenced and it is expected that the film stages will be completed in May 2013 with television stages completed in October 2013. It will be the largest purpose built facility in the region. The 60,500 sq ft water tank at Pinewood Indomina Studios in the Dominican Republic reached practical completion in mid October 2012, with stages due to be completed by March 2013.

The Company is actively exploring further strategic opportunities in other areas of the world where the demand for creative content is set to increase.

Television

The Company's television revenues in the period were £2.5m (six months ended 31 December 2011: £3.6m).

During a period of high demand from its film clients, the Company used its TV Studios for film production and also took the opportunity to upgrade its HD Television galleries. As a consequence, three large television productions could not be accommodated.

As the third largest provider of television studios in the UK, the Company continues to invest in its facilities and has recently completed a major investment in its television business. The two upgraded 9,000 sq ft HD. 5.1 Broadcast TV studios went live at Pinewood on 1 September 2012. This £1.7m investment is in addition to the £5.6m 30,000 sq ft Richard Attenborough television/film stage which opened earlier this year at Pinewood Studios and the expansion of the DCS offering. The Company continues to grow its television offering at Pinewood Studios in preparation of the expiry of the lease at Teddington Studios on 24 December 2014.

Pinewood and Teddington television studios played host to new and repeat business from Would I Lie To You (Zepperton), Keith Lemon's Lemonaid (talkbackTHAMES), Antiques House (ITN Productions) and The Angelos Epithemiou show (Pett Productions). The Ministry of Curious Stuff (BBC) was the first production to successfully utilise the new 9,000 sq ft HD, 5.1 broadcast TV studio facility.

Media Park

Media Park revenues (including the Group's 50% interest in the Shepperton Studios Property Partnership) for the period were £3.1m (six months ended 31 December 2011: £3.2m).

The total number of Media Park companies accommodated during the six month period was 266 (six months ended 31 December 2011: 276) while occupancy for the six month period was 96% (six months ended 31 December 2011: 97%). The Company continued to rationalise and refurbish its stock of buildings available for both Media Park occupiers and productions.

MEDIA INVESTMENT

Media Investment revenues, excluding intersegment revenues, for the period were £2.8m (6 months ended 31 December 2011: £1.3m).

The Company's co-investment of selected UK independent films continues to progress. Two further films were announced during the period, bringing the total to four, namely:A Fantastic Fear of Everything (Pinewood Films/Keel Films), Last Passenger (Pinewood Films/Future Films/BFI /Pathe Pictures), Belle (Pinewood Films/DJ Films/BFI/CinemaNX/Bankside) and Dom Hemingway (Pinewood Films/Recorded Picture Co/CinemaNX/Hanway Films).

Building on the success of Pinewood Films, the Company announced on 1 October 2012 that it had signed an Agreement with the Isle of Man Treasury ("IMOT") to source and advise on film investment opportunities for the £25m fund established by the IOMT and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT. On 22 October 2012 the Company further announced that it has received the consents required from the Financial Services Authority for the Agreement to become unconditional and accordingly the Agreement came into effect on 25 October 2012.

Pinewood Studios Development Framework

The Company announced on 16 May 2012 a consultation on the future development of Pinewood Studios with local and national stakeholders and the producers and developers of creative content. A planning application is expected to be submitted shortly.

Dividend

The Board has declared an interim dividend for the period of 0.5p per share (six months ended 31 December 2011: nil). The dividend is to be paid on 8 February 2013 to Shareholders on the register at 11 January 2013 (ex-dividend date of 9 January 2013)

Corporate

Pinewood's shares were delisted from the Main Market of the London Stock Exchange and admitted to trading on AIM on 23 July 2012, along with a £5.4m (before fees) placing of new ordinary shares. 

During the period two Non-Executive Directors resigned from the Board, Peter Hosker and John Whittaker. Two new appointments have been made, Andrew Smith, as an Executive Director for Strategy and Communications from 1 May 2012 and Steve Christian as an Executive Director from 25 October 2012.

Outlook

Current trading is positive with a high level of contracted revenues for the remainder of the current financial year.

The number of film productions contracted so far for next year is encouraging and the Board looks forward to the future with confidence.

The Company is delighted to welcome Ruth Prior who has joins the Board on 27 November as an Independent Non-Executive Director.

Ivan DunleavyChief Executive

Financial Review

Following the change to its accounting reference date from 31 December to 31 March during the prior financial year, the Company is delivering unaudited interim consolidated results for the six months ended 30 September 2012 ("the period"). The comparatives presented are for the six months ended 31 December 2011, being the previous interim period results prepared.

The Board uses a number of key performance indicators ("KPIs") to monitor Company performance, as well as to measure progress against the Company's objectives. The KPIs used are revenue, profitability, return on capital employed, cash flow and net debt, all of which are discussed as part of the Financial Review.

Segment information

During the period ended 30 September 2012, the Company amended its operational reporting structure to improve its management of several new activities undertaken since the initial adoption of IFRS 8 Operating Segments ("IFRS 8"). As a result of this reporting restructure, the Company 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.

Revenue

Total revenues for the period were £27.1m (six months ended 31 December 2011: £24.6m).

Media Services

The Media Services segment has principally three complementary revenue streams - Film, Television and Media Park.

Total revenues within this segment were £24.5m for the period (six months ended 31 December 2011: £23.3m), including £0.2m of intersegment revenue (six months ended 31 December 2011: nil).

Film revenues for the period within this segment were £18.8m (six months ended 31 December 2011: £16.4m), reflecting high levels of utilisation due to the Company's ongoing success in winning business in a buoyant but highly competitive international market. Included in Film are international film revenues for the period of £0.5m (six months ended 31 December 2011: £0.5m). These revenues were principally earned from providing international sales, marketing and studio development services in Canada, the Dominican Republic and Malaysia.

Television revenues for the period were £2.5m (six months ended 31 December 2011: £3.6m) principally reflecting tough ongoing market conditions, a high level of facility utilisation by film customers, which has reduced the availability for television production use and a period of facility downtime associated with the TV refurbishment project.

Media Park revenues, inclusive of service, utility and facility charges for the period were £3.1m (six months ended 31 December 2011: £3.2m). The results for the period include the Company's 50% interest in revenues from the Shepperton Studios Property Partnership ("SSPP") of £0.3m (six months ended 31 December 2011: £0.3m).

Media Investment

The Media Investment segment generates revenue from the provision of content investment and production services, principally to the film industry. Revenue in this segment was previously included in the Media Services Film sector.

Total revenues within this segment were £3.0m for the period (six months ended 31 December 2011: £1.3m), including £0.2m of intersegment revenue (six months ended 31 December 2011: nil). The increase in revenue from this segment is due to additional Pinewood Film investments made during the period.

Profit performance and earnings per share

Gross profit for the period was £10.5m (six months ended 31 December 2011: £8.5m) and gross margin for the period was 39% (six months ended 31 December 2011: 35%). Of this total, the Media Services segment contributed gross profit of £11.1m and gross margin of 45%, including intersegment gross profit of £0.2m.

Operating profit before exceptional items for the period was £6.1m (six months ended 31 December 2011: £3.7m) reflecting the production mix with reduced operating costs. Operating profit margin before exceptional items for the period was 22% (six months ended 31 December 2011: 15%).

EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation) for the period was £8.1m (six months ended 31 December 2011: £5.7m).

Profit before tax after exceptional items for the period was £3.0m (six months ended 31 December 2011: £5.4m loss).

Basic and diluted earnings per share for the period were 4.2p (six months ended 31 December 2011: loss per share, 11.4p). Basic and diluted earnings per share for the period after adjusting for exceptional items were6.7p (six months ended 31 December 2011: 3.5p).

The diluted and weighted average number of shares in issue at 30 September 2012 was 48.1m (31 December 2011: 46.8m).

AIM Listing & Share placing

On 23 July 2012 the Company's ordinary shares were admitted to trading on AIM. The ordinary shares were removed from trading on the main market of the London Stock Exchange plc and their listing on the Official List was cancelled.

In conjunction with the proposal to seek Shareholder approval for the delisting and admission of the ordinary shares to trading on AIM, the Company also raised £5.4m (before expenses of £0.3m) by way of a placing of 2,160,000 new ordinary shares at a price of 250 pence per new ordinary share.

Exceptional items

The Company has incurred exceptional charges of £820,000 during the period, detailed as follows:

Group reorganisation

The Company incurred exceptional reorganisation costs of £124,000 in the period (six months ended 31 December 2011: £240,000) in relation to the restructuring of certain business areas.

AIM listing

As a result of the admission of the Company's ordinary shares to trading on AIM, the Company incurred £336,000 of professional advisor fees during the period (six months ended 31 December 2011: nil).

Isle of Man Media Development Fund

The Company incurred costs of £360,000 in the period (six months ended 31 December 2011: nil) in relation to professional fees and integration costs as a result of signing an agreement with the Isle of Man Treasury ("IOMT") to source and advise on film investment opportunities for the £25m fund established by the IOMT and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT.

Return on capital employed

The Company measures return on capital employed by reference to annualised operating profit before exceptional items, as a percentage of average capital employed, being total equity plus interest bearing loans and borrowings, which for the twelve months ended 30 September was 8.9% (twelve months ended 31 December 2011: 8.7%).

Dividend

The Board has declared an interim dividend of 0.5p (six months ended 31 December 2012: nil). The dividend is to be paid on 8 February 2013 to shareholders on the register at 11 January 2013 (ex-dividend date of 9 January 2013).

Cash flow and net debt

The Company generated operating cash flow for the period of £7.2m (six months ended 31 December 2011: £6.0m). After adjusting for movements in working capital, cash generated from operations for the period was £10.0m (six months ended 31 December 2011: £4.0m), from which finance costs of £1.9m (six months ended 31 December 2011: £2.0m) were paid and a net corporation tax refund of £0.1m (six months ended 31 December 2011: £1.2m paid) was received.

Cash outflow on capital expenditure during the period was £4.4m (six months ended 31 December 2011: £7.8m). The main areas of expenditure during the six month period were on the TV studio upgrade, £1.6m, and Pinewood Studios Development Framework, £0.5m.

Net debt at 30 September 2012 was £41.9m (31 December 2011: £50.1m) which included £12.0m (31 December 2011: £12.0m) relating to the Company's 50% interest in the non-recourse Aviva loan to SSPP. The decrease in net debt over the period is principally driven by the capital injection from the new share issuance and £4.6m of cash being held by Pinewood Films No.3 Limited for the sole and restricted purpose of completing the Media Investment production of Belle.

On 28 May 2012, the Company arranged new banking facilities of up to £55m which comprise a £35m revolving credit facility, a £15m term facility and a £5m overdraft facility. These facilities are secured on certain of the Company's assets. The revolving credit facility has no scheduled repayments and matures in November 2016. The term facility contains scheduled repayments of £1.5m on both 30 June 2015 and 30 June 2016, and matures in November 2016. The £5m overdraft facility is reviewed annually.

The revolving credit and term facilities have a range of covenants and events of default, together with variable margins between 435 and 285 basis points over LIBOR.

In addition to the £55m banking facilities, there are non-recourse facilities provided to SSPP by the Company's joint venture partner, Aviva, which total £40m, of which £24m was drawn at 30 September 2012 (31 December 2011: £24m). This loan, which is 50% consolidated at £12m (31 December 2011: £12m) is included in the Company's statement of financial position. These facilities, which are available until 2026, are covenant free with no scheduled repayments. 

Investment property

Investment property is recognised in accordance with International Accounting Standard ("IAS") 40, "Investment Property" as a category within assets in the Company's statement of financial position. At 30 September 2012, the investment property was recorded at the depreciated cost of £6.1m (31 December 2011: £6.2m).

Capital commitments 

The Company had capital commitments of nil at 30 September 2012 (31 December 2011: nil).

Related party transactions

The related party transactions which have taken place are set out in Note 15 to the condensed set of financial statements, together with any changes to related party transactions disclosed in the annual report for the fifteen month period ended 31 March 2012 that could have a material effect on the financial position or performance of the Company.

Financial gearing

At 30 September 2012net debt, including the Company's share of the SSPP non-recourse drawn loan and the restricted cash held for sole use by Pinewood Films No.3 Limited in relation to the production of Belle, was £41.9m (31 December 2011: £50.1m). Financial gearing at 30 September 2012, excluding fair value and loan issue costs, was 52.7% (31 December 2011: 69.6%).

Finance costs and hedging

Net finance costs for the period were £2.3m (six months ended 31 December 2011: £2.2m) which includes £0.6m of exceptional finance costs as noted below. The Company has at its disposal undrawn facilities for which it pays non-utilisation fees as a percentage of the margin. Net finance costs were covered 2.66 times by operating profit before exceptional items for the period (six months ended 31 December 2011: 1.74 times). The Company continued to use interest rate derivatives to manage interest rate exposure.

At 30 September 2012, £22.5m (31 December 2011: £22.5m) of the Company's facilities were under interest rate swaps and £1.1m (31 December 2011: £1.4m) under a fixed interest rate asset financing facility.

Exceptional finance costs

The Company incurred £0.6m of exceptional finance costs in the period (six months ended 31 December 2011: nil) in relation to the refinancing of its banking facilities. These costs are included within finance costs in the group income statement.

Taxation

The total corporation tax expense for the period, based on profit before tax of £3.0m, was £0.9m (six months ended 31 December 2011: £0.1m credit).

The underlying rate of tax on profit before prior year adjustments and exceptional items is 24% (six months ended 31 December 2011: 26%). This has increased to an effective rate of 32% of profit after accounting for prior year adjustments, principally as a result of a tax provision in relation to the 2006 joint venture transaction with Aviva.

Going concern

In assessing the going concern basis, the Directors consider the Group's business activities, the financial position of the Company and the Company's financial risk management objectives and policies. The Directors considered that the Company has adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to adopt the going concern basis in preparing these consolidated financial statements.

Ivan DunleavyChief Executive

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 2012 which comprises the income statement, the balance sheet, the statement of changes in equity, the statement of recognised income and expense, the cash flow statement and related notes 1 to 17. 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 have been prepared in accordance with the accounting policies the group intends to use in preparing its next annual financial statements.

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 2012 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.

Deloitte LLP

Chartered Accountants and Statutory Auditor

Manchester, United Kingdom

26 November 2012

Condensed group income statement for the six months ended 30 September 2012

1. Corporate information

Pinewood Shepperton plc ("the Company") is a company incorporated and domiciled in the United Kingdom whose shares are admitted to trading on the AIM market of the London Stock Exchange. The unaudited interim condensed consolidated financial statements of the Company and its subsidiaries (together "the Group") for the six months ended 30 September 2012 were authorised for issue by the Board of Directors on 26 November 2012.

2. Basis of preparation and accounting policies

Basis of preparation

The unaudited interim condensed consolidated financial statements for the six months ended 30 September 2012 have been prepared in accordance with International Accounting Standard 34 "Interim financial reporting", as adopted by the European Union.

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 as at 31 March 2012, from which comparative information included in the interim condensed consolidated financial statements has been extracted. The consolidated financial statements for the fifteen month period ended 31 March 2012, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.

Comparative figures are presented for the six months to 31 December 2011 due to the change in accounting reference date from 31 December to 31 March in the prior year. The Directors do not consider the operations of the Group to be highly seasonal, and therefore believe the six months to 31 December 2011 to be a reasonable comparative for the six months to 30 September 2012.

Prior period restatement

The condensed group income statement for the six months ended 31 December 2011 has been restated. Total costs of £1,152,000 incurred in relation to Media Investment activities originally included within Administrative expenses have been reallocated to Cost of sales to better reflect the substance of the transactions. This reallocation was made in the audited financial statements for the fifteen month period ended 31 March 2012.

The restatement has been made in accordance with International Accounting Standard 8 "Accounting policies, changes in accounting estimates and errors".

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 fifteen month period ended 31 March 2012, with the exception of disclosures required under IFRS 8 "Operating segments" ("IFRS 8") following the Group's amendment to its operational financial reporting structure (see Note 3 "Segment information and revenue analysis").

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 16 "Principal Risks and Uncertainties".

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 27 "Financial risk management, objectives and policies" of the Group's Annual Accounts for the fifteen month period ended 31 March 2012. The Directors, having made appropriate enquiries, consider that the Group has adequate resources to continue in the operational business for the foreseeable future and have therefore continued to adopt the going concern basis in preparing these consolidated financial statements. 

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.

During the period ended 30 September 2012, the Group amended its operational reporting structure to improve its management of several new activities undertaken since the initial adoption of IFRS 8. As a result of this reporting restructure, 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. Following this change to the composition of reportable segments, the prior period figures shown below have been restated as required by IFRS 8.

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.

The following is an analysis of the Group's revenue by reportable segment for the periods under review:

Segment profit represents the profit earned by each segment without allocation of central selling, distribution and administration costs, exceptional items, finance costs and tax. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

The following is a reconciliation of the segmental profits to profit before tax for the periods under review:

4. Exceptional income

Exceptional income for the six month period was nil (six months ended 31 December 2011: £41,000 of VAT refunds).

5. Exceptional charges

Exceptional administrative expenses for the period total £820,000 (six months ended 31 December 2011: £7,034,000) and consist of:

Group reorganisation

The Group incurred exceptional reorganisation costs of £124,000 in the period (six months ended 31 December 2011: £240,000) in relation to the restructuring of certain business areas.

AIM listing

As a result of the Company's ordinary shares admission to AIM, the Group incurred £336,000 of professional advisor fees during the period (six months ended 31 December 2011: nil).

Isle of Man Media Development Fund

The Group incurred costs of £360,000 in the period (six months ended 31 December 2011: nil) mainly in relation to professional fees as a result of signing an agreement with the Isle of Man Treasury ("IOMT") to source and advise on film investment opportunities for the £25 million fund established by the IOMT and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT.

Project Pinewood

In the six months ended 31 December 2011, the Group incurred exceptional costs of £7,100,000 in relation to Project Pinewood costs following the Secretary of State's decision on 20 January 2012 to refuse planning permission for Project Pinewood. No such costs were incurred in the period ended 30 September 2012.

6. Taxation

The current corporation tax expense for the period, arising on profit before tax of £3.0m, was £0.9m (six months ended 31 December 2011: £0.1m credit).

The underlying rate of tax on profit before prior year adjustments and exceptional items is 24% (six months ended 31 December 2011: 26.4%). This has been increased to an effective rate of 32% on profit after accounting for prior year adjustments, principally as a result of a tax provision in relation to the 2006 joint venture transaction with Aviva.

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 month period ended 30 September 2012 is as follows:

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 Board of Directors approved and declared an interim dividend of 0.5p per share for the year ended 31 March 2013 on 26 November 2012. The dividend is to be paid on 8 February 2013.

8. Share capital and reserves

Authorised

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.

Nature and purpose of reserve

Share premium reserve

The share premium increased by £4.9m (six months to 31 December 2011: £0.2m) in the period as a result of the new shares issued less share issuance costs of £0.3m on 23 July 2012.

Capital redemption reserve

The capital redemption reserve arose as a result of the repurchase of shares in 2001.

9. Intangible assets

The goodwill of £5.6m (31 December 2011: £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 2012 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 fifteen month period ended 31 March 2012.

10. Property, plant and equipment

Significant additions

During the period ended 30 September 2012, the Group purchased additional Property, Plant and Equipment totalling £3.7m (six months ended 31 December 2011: £12.2m).

11. Investment property

Investment property is stated at depreciated cost excluding the day to day expense of servicing the property. At 30 September 2012, the Group recognised an investment property with a carrying value of £6.1m (31 December 2011: £6.2m).

12. 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 operations. The reconciliation below shows the breakdown of total cash per the statement of financial position at the period end:

13. Commitments and contingencies

Capital commitments

At 30 September 2012, the Group had capital commitments contracted but not provided for totalling nil (31 December 2011: nil).

Guarantees

At 30 September 2012, the Group had guarantees in place, in the form of documentary credits, totalling £155,000 (31 December 2011: £155,000) in relation to certain Section 278 highways related infrastructure which have not been provided for.

14. Financial risk management, objectives and policies

The financial risk management, objectives and policies of the Group are disclosed in Note 27 of the Group's Annual Report and Accounts for the fifteen month period ended 31 March 2012.

15. Related party disclosures

The unaudited interim consolidated financial statements include the financial statements of Pinewood Shepperton plc, its subsidiaries and its 50% interests in the joint ventures listed in the following table.

Pinewood Shepperton plc is the parent entity of the Group.

Shepperton Studios Limited has a commercial property lease on the Shepperton Studios property. The net cost to the Group of principal lease rentals during the six month period ended 30 September 2012 was £565,000 (six months ended 31 December 2011: £499,000).

In addition the Group pays a top up rent to the joint venture partnership based on certain of its trading activities at the Shepperton Studios site. The net cost to the Group of the top up rent for the period was £163,000 (six months ended 31 December 2011: £100,000).

Shepperton Management Limited manages the assets of the joint venture partnership and charges an asset management fee based on independent valuations of the Shepperton Studios site. Asset management fees charged during the period were £61,000 (six months ended 31 December 2011: £60,000). The Group's share of amounts owed by the 50% joint venture partnership at 30 September 2012 was £802,000 (31 December 2011: £514,000).

Pinewood Germany Limited entered into a 50/50 joint venture with Studio Hamburg GmbH, to market their existing studio facilities in Hamburg and Berlin.

Board Changes

As part of the transfer to AIM, Peel Holdings Limited ("Peel"), whose subsidiary Goodweather Investment Management Limited held circa 68 per cent. of the Ordinary Shares following Admission, gave an undertaking to take all measures to ensure that the number of Peel directors on the Board of the Company shall be less than the number of independent directors (being the directors of the Company who are not affiliates of Peel, or affiliates of the Company's other major shareholder, Warren James Holdings Limited). Accordingly, John Whittaker and Peter Hosker resigned from the Board on 23 July 2012.

Peel Management fee

On 16 August 2012 the Group agreed an Advisory and Non-Executive Directors Services fee of £120,000 per annum with Peel Acquisitions (Pegasus) Limited. Fees charged in relation to these services during the period were £240,000 (six months ended 31 December 2011: nil), which includes £80,000 of fees incurred in relation to the AIM listing and new share placement.

16. Principal risks and uncertainties

There are no changes to the assessment and considerations of the principal risks as disclosed in the Group's Annual Report for fifteen month period ended 31 March 2012.

The principal risks to which the Group is exposed are disclosed in the "Key business risks" section of the Annual Report and Note 27 "Financial risk management, objectives and policies" of the Annual Accounts for the fifteen month period ended 31 March 2012. An electronic version of the Annual Report and Accounts can be found in the investor relations section of the Group's website: www.pinewoodshepperton.com.

17. Post balance sheet events

Isle of Man Media Development Fund

On 22 October 2012, the Group received all consents required from the Financial Services Authority for the Agreement ("the Agreement") with the Isle of Man Treasury ("IOMT") to become unconditional. Accordingly, the Agreement came into effect on 25 October 2012.

As a result of the Agreement becoming unconditional, Goodweather Investment Management Limited (a member of the Peel Group) sold 4,891,582 ordinary shares in the capital of Pinewood to IOMT at a price of 250 pence per share on 25 October 2012. IOMT has given an undertaking to the Group that it will not acquire any other shares in the Company until the expiry of the period ending two years after it acquires the shares, subject to certain exceptions including pursuant to a general offer or scheme of arrangement or to maintain an aggregate holding of 9.9% of Pinewood's issued share capital.

Also on 25 October 2012, Steve Christian, the Chairman of CinemaNX Limited (the previous adviser to the IOMT), joined the Board of Pinewood Shepperton plc as an Executive Directorand a core team of four CinemaNX Limited employees joined the Group to provide additional expertise and continuity.