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Hollywood’s Sunset Studios is moving ahead with its plans to pump around £700m in a new film studio in Waltham Cross, a project that should generate around 4,500 jobs and create the largest film studio in Europe.
The Hollywood giant has submitted a range of plans and proposals to the local council, after holding a consultation last autumn.
The new complex, which will be located close to the M25, is designed with “this century and the next” in mind, according to the developers’ plans.
https://www.cityam.com/hollywood-takes-over-waltham-cross-as-700m-plan-for-europes-largest-film-studios-with-4500-jobs-moves-ahead/
News from last week of another large new production facility which I'd never even heard of before:
Https://www-bbc-co-uk.cdn.ampproject.org/c/s/www.bbc.co.uk/news/uk-england-berkshire-60720947.amp
"Winnersh Film Studios: Approved plan to bring up to 1,000 new jobs
13 March 2022"
Extract:
"The site includes two sound stage buildings and four workshops at one part of the site at the Winnersh Triangle Business Park and four workshops at another.
About 250 direct and 250 indirect jobs will be created at the studios in the short-term. The same number will be expected to be created by the studios in the long-term, Stage Fifty said.
The company also owns Farnborough Film Studios in Hampshire."
Are they trying to fill a large buy order!!!
"For this year ending December 2022, Cenkos forecasts £3.7m pretax profit with £5m next year. This allows for a larger PLC central cost base as well as higher director emoluments, which temporarily drives deleverage of EBITDA margin. But I feel that profit is not necessarily the correct measure of progress at ADF because of this high depreciation charge on the equipment, running at c. 10% of sales, which disguises the large and stable cash generation. Instead, EBITDA (earnings before interest, tax, depreciation and amortisation) is a better measure. Cenkos is forecasting EBITDA to run as high as £7m or 9.2p a share this year and £9.5m or 12.5p a share next year. This implies that the shares are trading at 6.8 times cash earnings and 5 times cash earnings one year out.
Very likely to buy rival On-Set
Visibility of work is clearly very good. For the current year, ADF has issued £20m of quotes for new business. Of these, £10m are now firm bookings as filming is going ahead and a further £5m is likely to occur as they are repeat bookings. In other words, given brokers are expecting sales of £29.2m this year, ADF has 52% of the forecast “in the bag.” But if the historical run rate of 80% contract extensions continues, visibility is 90%.
At the same time, further sizzle is added to the story because Proctor is on the lookout for acquisitions, with the acquisition of a small trailer business in Scotland being considered. But I suspect it will buy rival On-Set, which has a high quality fleet and similar employment contracts. This would add 250 vehicles and if it happens, I expect the price to take off. Alternatively, given its strength in logistics, it could easily make bolt on acquisitions of businesses involved in transportation of props, lighting, storage, catering as well as expanding into Europe. I am a buyer."
The new issue of SCSW is now out, so it should be OK to copy some extracts from the prior issue, which had ADF as its main tip:
Https://www.scsw.co.uk/article.php?id=9267
"The average age of the fleet is only 2.5 years. Such a comprehensive and high quality fleet means that ADF has become the supplier of choice for large scale and quality productions, says Proctor. Scale is a barrier to entry; Proctor says it would cost £40m and take 3-4 years to replicate the business fleet and any would-be-assailant would need costly specialised equipment and workshops to modify them (interior fit out, plumbers, electricians etc) and make them suitable for use."
"Most of the work tends to be repeat from the same client base, which includes Netflix, Disney, Apple, Amazon, HBO and NBC (Sky). The top four clients represent 55% of sales. Proctor says demand is running so high at the moment that whereas it historically used to be booked 3-4 months ahead of filming starting, bookings are now made 6 months in advance."
"Changing requirements add 80% to contract
Clients almost always change their requirements in the run up to filming and ADF has a track record of regularly boosting sales and profits as contracts become bigger than the original specification; in the five years pre-Covid, additional vehicles on average added 80% to the size of the original win.
To give an example of just what has been happening, take the example of Netflix’s The Crown, which had a production budget of £100m for the first series; by the time they filmed series 5, it had risen to £194m and they insisted on the same ADF team to handle the work. Facility vehicle spend for Series 1 was initially guided at £0.6m but additional requirements meant this more than doubled to £1.3m. The same has been true for each subsequent series - only bigger. Series 5, initially estimated at £2m, ended at £3.9m.
The increasing size and length of productions means that not only is there a greater need for a bigger fleet but the revenue per job is increasing - the firm’s average revenue per production has more than doubled in the last three years to £607,000 as programmes and films have become longer and more complex. Facility vehicles represent around 2% of the cost of production, which is why clients tend not to quibble on the pennies."
"Due to the material increase in the consumption of film and TV through streaming services, all the major US streaming companies have set up permanent bases in the UK, taking out studio leases of 10 years or more. ADF recently signed a 15 year lease at a site in Longcross, which will become its main operational centre and is one mile away from Netflix’s studios. Other studios in the vicinity include Shepperton (also leased by Netflix), Pinewood (leased by Disney) and Elstree (Sky)."
ADF's own Twitter page is quiet in business terms (though it does show how busy they are with loads of job opportunities), but the CEO's Twitter page is very informative.
I assume that the retweets that Marsden Proctor highlights are for TV/film productions which ADF are working on - and there are lots of them, too many to mention individually:
Https://twitter.com/marsproctor
(FTSE) bullish pendant formed and ... poor momentum. volumes are small this am, confirms institution are generally out of trading .
FTSE pivoted at 8.55am today at the FIb pivot point with 2 strong support just above it (which FTSE is above it now). all indications are green at the moment. lets hope no bad news come out.
Shares have leapt higher on optimistic reports from Russia, with the FTSE 100 jumping over 80 in a matter of seconds.
Russian news agency InterFax reported that President Putin said that "there are certain positive developments in the negotiations on Ukraine".
The Footise is up 129 points (1.8%) on the day at 7,228.09 and indices in Europe have jumped even higher, with the Dax and CAC up more than 3%, and US futures also shooting higher.
Panic over and all buys up to now today. Filming LORD OF THE RINGS shortly in Wales.
There should be a substantial bounce here imho, especially given ADF are on such a cheap current year P/E of barely above 12 .
Extract from the recent Cenkos update on 11th February;
"ADF find themselves in a truly unique part of the market where they are at the epicentre of the battle for content between mega-cap streaming companies, and we see that clearly today with the demand for their services continuing to grow rapidly. In our view, the previously released scenario analysis becomes increasingly relevant and we believe a fair value range for the share price is 85p-106p."
my heart is sinking today seeing all my shares are blue except this one. and its still digging a hole.... anyhow, I topped up rather than crystalizing losses.... steady the ship!
ITV's shares were sold off heavily yesterday. The reason? They're going head to head with the streamers (Netflix, Amazon etc) and investing much more heavily in content - ££1.23 billion this year and £1.35 billion in 2023.
Which has to be yet more good news for ADF:
Https://www.thetimes.co.uk/article/itv-banks-on-its-x-factor-to-counter-the-streamers-3w0ztm0qc
John Lee has bought into ADF per his new column in today's FT:
Https://www.ft.com/content/3d1e7613-301b-4ee8-a760-303481558041
I'll copy the relevant text here before it becomes subscriber-only! Any recommendation from John Lee should bring in further interest here:
"Turning to portfolio activity, I am particularly pleased with a new issue, Facilities by ADF, although I only bought a small holding at 55p on the first day of dealings. They are now nearer 80p. The company provides a rental range of the trucks and trailers used by actors, make-up artists, technicians on location and sets for the burgeoning content creation sector in the UK and Europe.
Few have appreciated the scale of investment in developing and upgrading studios — an estimated £1bn, according to the British Film Institute, in sites like Shepperton and the new Sky Studios Elstree, with total UK studio space planned to exceed that of Los Angeles."
A very strange decline at present.
I'd have thought the present tragedy would actually benefit ADF if anything, since locations in a vast swathe of Eastern Europe/Russia are now out of bounds or risky, so should encourage even more filming in the UK and Western Europe.
Must be a few nervous nellies out there with short-term profits to take!
thansk Cynsand... I might top up actually.
Tree shakers. The news is good. The industry is getting a big uplift from America - Netflix et al.
Top slice if you feel the need. IMHO one should buy rather than sell. I have.
gosh, whats with the sudden sp drop today? anyhow, HODLing as I have since IPO... hmm...
Couldn’t buy any. Had to buy through a limit order; broker said there was very few shares available.
From The Times on Saturday - I'll paste the whole thing as I suspect it's subscriber-only:
Https://www.thetimes.co.uk/article/acef79e6-90fc-11ec-9569-fea923928840?shareToken=af95569de72dbce1daac14dfea2b8d01
"Hollywood losing out to blockbuster Britain
Saturday February 19 2022
Britain is on course to become bigger than Hollywood as developers rush to build film studios and capitalise on companies such as Amazon placing big bets on UK production.
Analysis by The Times showed that within two years there will be more studio facilities and square footage of studio space in the UK than the whole of Los Angeles, should developments open their doors as planned.
At least 20 new studios are in various stages of planning and construction, which would mean there is a minimum of 56 sites where blockbuster film and television shoots can take place. This would be two more than the 54 certified production facilities in Hollywood, according to a report last year by FilmLA, the Los Angeles filming permit office.
Research carried out last year by Lambert Smith Hampton, a property consultancy, found that the UK’s studio space could rise to 6.8 million sq ft if new sites and expansion plans are completed. Los Angeles has 5.3 million sq ft of studio space.
An estimated £1 billion is being poured into the studio gold rush, according to the British Film Institute, as Hollywood players come to the UK to take advantage of tax breaks and the skilled workforce.
Last week Amazon spent millions of pounds buying up exclusive filming space at Shepperton Studios. The US technology and entertainment company has taken a lease on expanded facilities at the complex in Surrey which is operated by Pinewood Group and was used to make the film 1917 and Downton Abbey.
Netflix and Disney have made similar moves to acquire UK filming space, as developments shoot up across the country. Studios are being built or expanded in places such as Belfast, Edinburgh, Leeds and Liverpool.
One of the biggest new facilities planning to open its doors in the next few months is Sky Studios Elstree, a 27.5-acre site in Hertfordshire. The studio will be the base for Sky original shows, which have recently included A Discovery of Witches and Chernobyl.
It will also house blockbuster films made by NBC Universal, the American entertainment company behind the Jurassic World franchise. Jurassic World Dominion, the latest instalment in the dinosaur series, was the first big Hollywood movie to be produced in the UK following the industry’s Covid-19 filming hiatus.
Caroline Cooper, chief operating officer of Sky Studios, said: “Hollywood has obviously got a great heritage but a lot of people recognise just what an attractive place the UK is to make content. There is a growing appetite for European content more generally, so it’s no surprise the UK has become the hub.”
Sky Studios will open in phases this year, with some sound stages — the cavernous internal spaces used to m
Facilities By ADF (@FacilitiesByADF) tweeted at 9:14 AM on Tue, Feb 22, 2022:
??VACANCY??
#jobalert #hiring #HIRINGNOW #Accounts
We are looking for an Account Manager to join our team! Click the link below for more information:
https://t.co/LExNm6SWZu
(https://twitter.com/FacilitiesByADF/status/1496050630523174913?t=lJJccuqCEYuICS52M6MB7A&s=03)
Just up in London for a few days and all is can see rolling into Hyde Park are Facilities ADF trucks & trailers.
Great to be invested in a Company that’s clearly doing The Business!!!
All brand new trucks too. What an outfit.
Worse case this might retrace back to 61.8% of ATH, if it does I will be topping up massively around 71p mark. There is support at 73/74p which I will look to top up. Not bothered with the ups and downs and nothing moves in straight line upwards.
Good to see the Naked Trader buying more ADF per his update yesterday afternoon . Here's what he said:
https://www.nakedtrader.co.uk/
"I bought some more Facilities by ADF.
Discussed them at the last update in depth so you can go back to the archive for that then lazy me has less writing to do about it.
I see the Mail on Sunday picked it up and tipped it.
Strange that paper seems to tip a lot of stuff after I feature them here (!?).
Anyway the write up was decent and agree with it, you should be able to google its write up.
Got lucky here I think with one of the few IPOS in the last 12 months that have actually been realistically priced and hopeful that it will hit 100p in time.
Today it issued an ahead of expectations statement and it was all rather bullish.
Unlucky they released the statement on a down day though. And of course as is typical on results day the shares fell - I might be tempted for another top up."