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Pinewood Group plc

Audited results for the year ended 31 March 2016

Pinewood Group plc, a world leading studio and production services operator, delivers another year of strong growth.

Today the Company publishes its audited results for the year ended 31 March 2016.

Strategic progress

· Strategic review announced on 10 February 2016 in progress

· The first phase of PSDF "Pinewood East" is now complete and part occupied

· Pinewood Atlanta Studios Phase Three construction commenced with completion expected before the end of Pinewood's 2017 financial year

Financial highlights

(i) Normalised EPS - EPS adjusted for exceptional items and fair value movements on financial derivatives and the taxation on both of these (See Note 9).

(ii) Adjusted Media Services ROCE - annualised operating profit for Media Services before exceptional items including inter-segment revenue and share of results for joint ventures as a percentage of average capital employed, being total equity plus net debt, excluding capital employed in assets under the course of construction (See page 15).

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

"The Company is very pleased to report today another set of strong results showing a 10.9% increase in group revenue and a 31.1% increase in normalised earnings per share.

The result of the UK's referendum on membership of the EU is now known. In the context of our business, the decline in the £sterling exchange rate is undoubtedly positive for our international customers. We will continue to monitor sentiment around the issue going forward.

The Company is also pleased to confirm that the PSDF Phase One became fully operational on 30 June 2016 adding five stages and significant capacity to our existing world class offer. The Company is delighted that the first production to utilise the new facilities is "Film Stars Don't Die In Liverpool" produced by Barbara Broccoli who has a long association with the Pinewood Group through the Bond franchise. We have, as expected, already signed a contract for an additional major film production which will fully utilise these new facilities from August 2016.

This financial year has started strongly with good visibility for the balance of 2016".

Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

Enquiries

Pinewood Group plc +44 (0)1753 656732

Andrew M. Smith

Corporate Affairs Director & Company Secretary

Peel Hunt LLP +44 (0)207 418 8900

Edward Knight / Euan Brown

Notes to editors

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

· Pinewood Studios, Shepperton Studios and Pinewood Studio Wales together accommodate 40 stages and three dedicated digital television studios

· Pinewood Studios is home to Europe's only 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, television and video game production as part of its growing range of services

· Pinewood Studios and Shepperton Studios have been home to over 2,000 films in more than 80 years and have hosted over 800 TV shows

· There are 247 independent, media related companies based within the Group's Media Hub

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

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.

Chairman's Statement

Once again Pinewood Group plc has delivered record revenues as the Company capitalises on the continuing demand for screen-based entertainment. Group revenues for the year ended 31 March 2016 were 10.9% higher at £83.2m (year ended 31 March 2015: £75.0m).

The Company remained capacity constrained during the year which makes the results particularly pleasing and gives confidence that the recently opened additional capacity will significantly enhance Pinewood's offer to the global screen-based industries.

The Board's strategy for the Pinewood Group is to capture more of the value chain in content creation across film, television and games. Clearly, expanding facilities at Pinewood Studios will be a major part in delivering this. The Board has identified additional opportunities internationally; in pre and post production; in ancillary services and in consultancy. These opportunities will expand and enhance our offer to customers and will leverage Pinewood's reputation for expertise and excellence.

While management has continued to drive the business forward, delivering another set of excellent results, the Board commissioned a Strategic Review of the capital base and structure.

The Company announced a Strategic Review on 10 February 2016, as follows:

"The objectives of last year's share placing, which was successfully completed on 17 April 2015, were to raise proceeds of £30m to part fund Phase One of the PSDF development and also to create a more diversified shareholder base that would be able to support the Company through subsequent phases of growth and enable the Company to move up to a full listing on the main market.

The shareholder register, however, remains tightly held, which has continued to stifle liquidity in the shares and has prevented the Company from achieving its aim of obtaining a main market listing.

The Board has now determined that it is appropriate to evaluate alternative opportunities to maximise value for the Company's shareholders and to build on Pinewood's successes to date. We believe there is a requirement for a funding strategy to be in place to fully realise the Company's future potential (for instance to fund PSDF Phases Two and Three). Accordingly, Rothschild has been appointed to assist with a strategic review of the overall capital base and structure, which could include a sale of the Company."

The Strategic Review is ongoing and we will, of course, update shareholders on its progress when there is further information to share.

The Board has decided to recommend a final dividend of 3.2p per share, recognising the strong performance for the year to 31 March 2016. It is worth recording that as at 31 December 2001, and following the acquisitions of Pinewood and Shepperton Studios, staff numbers were 254. As at 31 March 2016, staff numbers were also 254, but the Group has 6 additional sites, a television studios business and many other new activities. This is a tribute to management's constant drive for efficiency and our staff's high levels of commitment.

My thanks must go to the staff and management of the Company who have played such an important role in achieving this record performance.

Lord Grade of Yarmouth, CBE

Chairman

10 July 2016Strategic Report

This Strategic Report has been prepared solely to provide additional information to shareholders to assess the Company's business strategies and the potential for those strategies to succeed.

The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

The Directors, in preparing this Strategic Report, have complied with Section 414c of the Companies Act 2006.

Our business model

Pinewood Group plc is a leading provider of studio and related services to the global screen-based industries. Our services support the screen based industries including film production, filmed television and studio television recording, digital content services and the provision of facilities to media related business.

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 screen-based industries; and Media Investment, which provides investment funding and production services to the screen-based industries.

The Media Services segment has principally three complementary operating streams - Film; Television; and Media Hub.

Within Film and TV, operations are further divided into Production Services (which includes stage and ancillary), Digital Content Services ("DCS") and International.

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

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

The Company's television ("TV") 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 TV studios, film stages and post production services to support all forms of television production.

The Media Hub is currently home to 247 independent businesses representing and providing expertise, equipment and support to the film, television, games, advertising and photographic industries. These companies come together to form a unique cluster and centre of excellence for the entire creative industry.

The Media Investment segment (trading as "Pinewood Pictures") includes an agreement to source and advise on film, high-end television and video game investment opportunities for two media development funds; a £25m fund established by the Isle of Man Treasury and a £30m fund established by the Welsh Government. In addition, the segment involves identification and investment by the Company in British qualifying film and high-end television productions.

Our objectives and strategy

The Group's vision is to build upon its UK facility focused business to become a global production services business to the screen based industries and to develop opportunities to capture more of the value chain. This is reinforced in the Group's mission to:

• Continue to be the leading global supplier for the production of film;

• Become the leading UK destination for the production of TV, games and digital media;

• Leverage our brand through international operations;

• Leverage our brand through diversified services and markets;

• 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 its stage and studio facilities and services;

• Investment in digital activities and technology; and

• Increased media and content investment activity.

• Property development:

• Plan to increase overall capacity; and

• Demand-led Media Hub expansion.

• Leveraging the brand:

• Selective growth through joint ventures with limited capital commitment;

• Lower risk investment in screen content; and

• Provision of investment advice to third party 'content' funds.

Future developments

Media Services

The Company continues to focus on being the leading destination for production of film and leveraging the Pinewood brand through additional services and international activities.

The Pinewood Studios Development Framework

The PSDF comprises a substantial expansion of the existing Pinewood Studios by ultimately adding a total of 1,000,000 sq. ft. of new facilities including 10 large stages with supporting workshops, production offices and infrastructure.

Phase One of the scheme incorporates five sound stages totalling 150,000 sq. ft., 140,000 sq. ft. of workshops across 10 buildings and office buildings totalling 31,000 sq. ft. The stages were completed on 30 June 2016.

The Company will consider the timing of the future phases based on demand, the utilisation of Phase One and availability of appropriate financing.

Media Investment

Future Funds

The Company is considering possible further media investment funds. Both in terms of fund advice and direct diversification opportunities, this segment continues to be an important driver for the future.

Pinewood Television

On 26 January 2016, the Company announced a joint venture with StoryFirst PST Limited. The new company is named Pinewood Television Limited ("Pinewood Television") and its principal business is to create, develop and finance high quality drama series for television for the international market.

Helen Gregory has been appointed Creative Director to lead the company and the creative process from development through production to delivery to broadcasters and distributors. Helen is an award winning producer of drama and comedy for BBC 1, BBC 2, BBC 3, ITV, C4, Five and Sky and was previously a commissioning editor for Drama at Channel Four.

Pinewood Television is expected to be both an originating producer and a co-producing partner for major drama projects looking for deficit funding. It is now in the process of arranging long term dedicated external financing.

Outlook

The Company is very pleased to report today another set of strong results showing a 10.9% increase in group revenue and a 31.1% increase in normalised earnings per share.

The result of the UK's referendum on membership of the EU is now known. In the context of our business, the decline in the £sterling exchange rate is undoubtedly positive for our international customers. We will continue to monitor sentiment around the issue going forward.

The Company is also pleased to confirm that the PSDF Phase One became fully operational on 30 June 2016 adding five stages and significant capacity to our existing world class offer. The Company is delighted that the first production to utilise the new facilities is "Film Stars Don't Die In Liverpool" produced by Barbara Broccoli who has a long association with the Pinewood Group through the Bond franchise. We have, as expected, already signed a contract for an additional major film production which will fully utilise these new facilities from August 2016.

This financial year has started strongly with good visibility for the balance of 2016.

Media Services Review

Commercial Director's Overview

Media Services has enjoyed another strong performance with total revenues within this segment delivering £66.6m for the year (year ended 31 March 2015: £57.2m), including £0.9m of intersegment revenue (year ended 31 March 2015: £1.3m). Intersegment revenues relate to revenue generated from the utilisation of the Company's core services by the Group's wholly-owned Film Production Companies ("FPCs").

The demand for the Company's facilities throughout the year has been strong, as reflected in stage occupancy of 90% (year ended 31 March 2015: 80%); however this ongoing strong film demand has limited television's access to our film stages.

Revenues grew not only through strong utilisation of ancillary facilities on the lot but also due to a positive contribution from our new Pinewood MBS Lighting business both "on-the-lot" and "off-the-lot".

During the year, Pinewood was home to the latest Bond film SPECTRE as well as the largest grossing film of 2015, Star Wars: VII The Force Awakens (Lucasfilm) and along with Shepperton Studios hosted seven of the top 25 grossing films of the year.

In its first full year of trading, Pinewood Creative, which represents a new activity providing creative services (including 3D printing) to "on-the-lot" and "off-the-lot" customers, such as Merlin Entertainment and Hampton Court Palace, enjoyed a strong performance, exceeding expectations.

Digital Content Services, delivered record revenues of £9.4m (year ended 31 March 2015: £7.2m) during the year through growing our DPS services (secure management of data generated from film cameras) and also with Disney where I'm pleased that we have renewed our relationship to manage their International release versions for a further 5 years.

Television had a resilient year, despite strong film demand limiting opportunity, generating revenues of £5.2m (year ending 31 March 2015: £5.8m), with Pinewood's multi-camera HD studios hosting a number of high profile light entertainment shows including Still Open All Hours (BBC) and Birds of A Feather (Freemantle).

Pinewood is host to 247 (31 March 2015: 242) tenant companies across our Media Hub facilities and it is extremely encouraging that tenant occupancy stands at 98% (year ending 31 March 2015: 97%) with over 90% of companies renewing leases that were due to expire during the year.

Internationally, we have established Production Services businesses in Canada, USA and Ireland where we continue to work with our clients whilst they are on location.

In Atlanta, business was buoyant with the Company's share of joint venture profits increasing from £400,000 for the year ending 31 March 2015 to £1,200,000 for the year ending 31 March 2016. Phase Three of the Pinewood Atlanta Studios development is currently under construction. When completed in early calendar year 2017, we will have added a further 128,000sq. ft. of stage space creating a total of 346,000sq. ft. of stages at Pinewood Atlanta Studios.

Film

Film revenues for the year ended 31 March 2016 were £53.0m (year ended 31 March 2015: £43.9m), a year on year increase of 20.6%. The increase is due to high utilisation of stage and ancillary studio space, expansion of the Group's offering in complementary activities, growth in DCS revenues and a higher level of international activity.

The largest film production based at Pinewood Studios during the period was Star Wars: Episode VIII (Lucasfilm) and the largest production at Shepperton Studios was Beauty and the Beast (Disney).

Other major productions which were based at Pinewood and Shepperton during the year included the 24th Bond film, SPECTRE (Eon), Rogue One: A Star Wars Story (Lucasfilm) Assassin's Creed (New Regency), Bridget Jones's Baby (Working Title/Universal) and The Huntsman (Universal).

Pinewood Creative and 3D services have completed work for a number of film, commercials and TV clients on the lot including Disney, BBC and Discovery Channel. In addition the department has successfully completed work for retailers including Burberry and Harrods; the entertainment market including Merlin Group and Kidzania. They also constructed a number of props and models for major events in the UK including a Henry VIII exhibition at Hampton Court.

DCS revenues included within the total film revenue for the year ended 31 March 2016 were £9.4m (year ended 31 March 2015: £7.2m).

Notable sound post production work completed during the year included Everest (Working Title Films), Victor Frankenstein (20th Century Fox), The Other Side of The Door (20th Century Fox) and Roger Waters The Wall (Universal Pictures). The Company also successfully completed sound work for the video games industry on Uncharted (Sony) Guitar Hero Live (Activision) and War Hammer (Creative Assembly).

Digital Production Services ("DPS"), the secure management of data generated from digital film shoots on set and on location, continues to grow with services provided to productions including Rogue One: A Star Wars Story (Lucasfilm), Jason Bourne 5 (Universal), Time Out of Mind (New Regency), Life on the Road (Independent) and Dr. Strange (Marvel). DCS continues to enhance its offering to productions shooting on film, 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. As well as the Company offering dailies grading for feature films and TV, the department has expanded its offering with full picture post production services including digital intermediate for Film and TV.

International 

International revenues for the year included within Film were £3.5m (year ended 31 March 2015: £3.1m) and relate to sales and marketing agreements in Toronto, Malaysia and Dominican Republic, and consultancy services provided in China, as further discussed below.

Pinewood Toronto Studios

Pinewood Toronto Studios ("PTS") hosted the biggest budget studio film to shoot in Ontario: Bravo 14 (aka Suicide Squad) which began principal photography in June 2015 and ended in September 2015. Other productions to shoot at PTS during the year were Paramount's xXx: The Return of Xander Cage and Downsizing. TV series The Expanse - Season 1 (for Syfy Channel) wrapped in September and started prep on Season 2 this April, The Strain - (for F/X) started photography for Season 3 this January.

Pinewood Dominican Republic 

Pinewood Dominican Republic ("PDR") hosted the Weinstein Company's 47 Meters Down in August, and as part of Lantica Media's co-financing deal with Pantelion (the Spanish language division of Lionsgate Films): Ladrones, Cinderello, Navidad en el Caribe. PDR handled all production service and water tank work for Paramount's xXx: The Return of Xander Cage during February and March 2016.

Pinewood Malaysia

Pinewood Iskandar Malaysia Studios hosted the Netflix series Marco Polo Season 2 from April 2015 to February 2016.

Pinewood Atlanta Studios

Pinewood Atlanta Studios ("PAS"), hosted Marvel's Captain America 3: Civil War and Guardians of the Galaxy 2 which occupied facilities in late 2015 with production commencing in April 2016. In June 2015, construction was completed on Phase Two of development, comprising 100,000sq. ft. of film sound stages (five stages), 45,000sq. ft. of workshops and 20,000sq. ft. of offices in addition to the six stages built in Phase One. Sony's Passengers moved into the Phase Two stages once ready.

PAS has established several exclusive vendor relationships with MBS Lighting, Hollywood Trucks and Home Depot. PAS also took over sales and management of the Pinewood Atlanta Studios Production Centre formerly managed by Rivers Rock LLC.

Pinewood Digital Content Services opened a preview theatre in the Production Centre this March and serviced Fox Searchlight's Three Billboards outside Ebbing, Missouri for on set digital dailies in North Carolina.

Earlier this year PAS announced Phase Three of construction to include 6 stages, 50,000sq. ft. of workshops and 20,000sq. ft. of offices which are expected to be completed in early calendar year 2017.

China

The Company provides consultancy services to a number of leading Chinese film industry companies. During the year the company continued to provide advice on the design and construction of the Qingdao Oriental Movie Metropolis, a film facility comprising 45 stages for the Wanda Group. Construction on Phase One commenced in 2015 with the studio complex scheduled to open in 2017. In addition the Company continues to provide third party advice.

Pinewood Production Services

Pinewood International established new production services divisions in Toronto (Pinewood Production Services Canada, "PPSC"), Atlanta (Pinewood Productions Services Georgia, "PPSG") and Ireland (Pinewood Productions Ireland Limited, "PPIL") to facilitate productions shooting outside of the studio lots in each of these territories.

Television

TV revenues for the year were £5.2m (year ended 31 March 2015: £5.8m), with the year on year reduction being principally due to strong film demand limiting opportunity.

Pinewood's dedicated multi-camera HD studio facilities hosted a number of key UK light entertainment shows including Birds of A Feather (Fremantle Media), Would I Lie To You (Endemol/Shine) and Red Dwarf (BabyCow/UKTV). The TV studios also facilitated the live election coverage for Channel 4 and A Dinosaur Autopsy for Discovery network. In addition, utilising the company's flexible media stages, the television business facilitated Bring The Noise (Olga/Sky1) and a number of critically acclaimed Dramas including The Crown (Leftbank/Netflix) and Humans (Kudos/Channel 4).

Pinewood Studio Wales

Pinewood Studio Wales ("PSW") has played host to a number of key television dramas filming in Wales including The Bastard Executioner (Fox) and more recently Sherlock (Hartswood/BBC) and Class, a BBC; Dr Who spin off TV drama. Pinewood DCS in Wales and London is servicing The Collection (Lookout Point). The tenant community continues to grow with Alpha Grip and Take 2 joining PSW recently.

Our TV media services offer continues to expand and now in addition to our TV studios and media stages we offer Pinewood Creative Services, Pinewood MBS Lighting and a comprehensive range of Digital Content Services to the UK TV market.

Media Hub

Media Hub revenues inclusive of service, utility and facility charges for the year were £7.6m (year ending 31 March 2015: £6.2m). Media Hub revenue now includes £1.2m for Shepperton Media Hub following the Shepperton Studios Property Partnership transaction in December 2014.

The total number of Media Hub companies accommodated at the year-end was 247 at Pinewood Studios and Shepperton Studios, with occupancy of 98% across a net lettable area of 306,000 sq. ft. (year ended 31 March 2015: 242 companies, 97% occupancy, 359,000sq. ft.).

The Company accepted a surrender of the Technicolor lease on 1 February 2016. The successful reallocation of this space to Film production accommodation resulted in a 41,000 sq. ft. reduction in the net lettable area in Media Hub.

Media Investment Review

Media Investment revenue for the year was £17.4m (year ended 31 March 2015: £19.0m).

The year on year reduction is principally driven by a reduction in the earnings and cash neutral Film Production Company activity (£15.5m in the year ending 31 March 2016 versus £17.8m in 2015).

Revenues excluding this have grown by 55.6% from £1.2m in the year ending 31 March 2015 to £1.9m in the year ended 31 March 2016 principally due to other income and commissions earned from the UK distribution activity undertaken by the Company on Spooks: The Greater Good and Pressure and additional producer fees.

Yu-Fai Suen joined Pinewood Pictures on 7 March 2016 as Managing Director.

Investment advisory 

The Company has continued to advise on the Isle of Man Media Development Fund and the Welsh Media Investment Budget.

During the year to date, the Isle of Man MDF has invested in five online games including JCB: Mars Pioneer and Grimm: Origins (an ancillary to the successful Universal TV series Grimm), as well as Scott Free's Mindhorn, a comedy feature film set on the IOM.

Pinewood advised on the Welsh MIB investment into horror feature film Don't Knock Twice from the Welsh company Red & Black Films.

The Welsh Ministers also invested, alongside Pinewood, in both Lone Scherfig's Their Finest Hour and a Half and Amazon-backed TV series The Collection to be produced by Lookout Point/BBC Worldwide. Investment advisory revenue for the year was £0.8m (year ended 31 March 2015: £0.8m).

In addition to the investment made by third party funds, the Group also provided film finance totalling £1.4m to its wholly-owned subsidiary FPCs (year ended 31 March 2015: £1.0m).

During the year the Company earned other commissions and investment recoupment totalling £1.2m against film investments made in prior years (year ended 31 March 2015: £0.5m). The recoupment revenue has been generated principally from the release of Riot Club and further income from Dom Hemingway.

Film production companies

Revenue from FPCs for the year totalled £15.5m (year ended 31 March 2015: £17.8m). An FPC is considered active from the close of film financing until the production is completed and delivered.

The operating loss from FPC activity of £3.5m (year ended 31 March 2015: £4.3m) was offset by UK film tax relief of £3.3m (year ended 31 March 2015: £4.1m) as expected.

Included in the Group net cash balance of £1.4m, is £2.0m (year ended 31 March 2015: £0.6m) restricted solely for use in the production of specific FPC operations. The Group trade receivables balance of £11.4m includes £6.4m (31 March 2015: £0.7m) consolidated from FPC activities whilst the Group trade and other payables balance of £42.7m includes £12.9m (31 March 2015: £5.1m) from FPCs. The year on year variance is driven by the timing of completion of active FPCs.

Financial Review

Finance Director's Overview

Since changing the financial year end, which resulted in the period to 31 March 2012 being a 15 month period, Group revenue has increased from £55.0m for the year ended 31 March 2013 to £83.2m for the year ended 31 March 2016.

In Media Services revenue has grown from £46.5m for the year ended 31 March 2013 to £66.6m for the year ended 31 March 2016, representing compound annual growth of 12.7% over this period. Whilst this includes the impact of the acquisition of the 50% share of Shepperton Studios Property Partnership (Media Hub revenue has increased from £5.6m to £7.6m over this time period principally due to this) the key driver for the increase is Film revenue which has increased from £35.2m in 2013 to £53.0m for the year ended 31 March 2016. The Group's strategy to increase capacity, invest in digital activities and leverage the Pinewood brand is reflected in this growth.

In Media Investment performance is most meaningfully assessed at the profit after tax level which, for the year ended 31 March 2016, is a profit of £0.4m (year ended 31 March 2015: £0.1m loss). The segment (established in 2012) has recorded improving results and the Company believes the profit recorded for the year ended 31 March 2016 once again represents an endorsement of the Group's strategy to increase activity in this segment.

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 are:

Group profit after tax for the year ended 31 March 2016 was £8.1m (year ended 31 March 2015: £8.1m) including the impact of exceptional items and the movement on fair value of financial derivatives.

Normalised profit after tax and earnings per share are adjusted to exclude exceptional items and the mark to market impact of the Company's financial derivatives. Results for the Group are more meaningfully reviewed at the after tax level due to the impact of the UK Film Tax Credit in the Media Investment segment.

Normalised profit after tax and earnings per share of £10.1m and 17.7p respectively represent growth of 51.6% and 31.1% (year ended 31 March 2015: £6.7m and 13.5p). The growth is driven by increased Media Services sales revenue, the benefit of the acquisition of the 50% share of Shepperton Studios Property Partnership ("SSPP"), previously owned by Aviva Investors, in December 2014, an improved Media Services operating margin, and the profit after tax in Media Investment.

EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation) for the year was £21.0m (year ended 31 March 2015: £12.2m), including £3.7m of Media Investment loss (year ended 31 March 2015: £5.3m loss) but excluding the EBITDA attributable to the Group's share of joint ventures. After adding back the FPC loss which is offset by the UK Film Tax Relief and the Group's share of joint ventures, adjusted EBITDA is £25.6m (year ended 31 March 2015: £17.6m).

Profit margins

The Media Services segment gross margin, including intersegment revenues, for the year ended 31 March 2016 was 41.4% (year ended 31 March 2015: 37.2%). The Media Services operating margin before exceptional items is 25.3% (year ended 31 March 2015: 19.3%). The year on year increase is principally driven by operational gearing and the acquisition of the other 50% of SSPP offset by an increase in depreciation costs.

Results for the Media Investment segment are more meaningfully reviewed at the profit after tax level due to the impact of the UK Film Tax Relief.

The profit after tax for the segment is £0.4m (year ended 31 March 2015: £0.1m loss).

Normalised Group profit after tax for the year ended 31 March 2016 was £10.1m which was a 12.1% margin (year ended 31 March 2015: £6.7m, 8.9% margin).

Exceptional items

The Group discloses as exceptional items on the face of the income statement those items 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.

The Company earned net exceptional operating income of £0.4m (year ended 31 March 2015: £nil) as detailed below, consisting of £0.3m of exceptional costs and £0.7m of exceptional income.

Strategic review

On 10 February 2016 the Company announced that it had appointed Rothschild to advise on a strategic review of the Company. Expenses incurred to 31 March 2016 relate to professional fees and were £0.3m (year ended 31 March 2015: £nil).

Technicolor lease surrender

During the year the Company accepted a surrender of the lease to Technicolor Limited. The net income from the lease surrender, after related expenses, was £0.7m (year ended 31 March 2015: £nil).

These exceptional items are further disclosed in Note 4 of these financial statements.

In the prior year to 31 March 2015, the Company also earned exceptional income (after operating profit) of £1,952k, which arose as a result of the SSPP transaction as detailed further in Note 5.

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 revenue and share of results of joint ventures, as a percentage of average capital employed, being total equity plus net debt. ROCE for the twelve months ended 31 March 2016 was 10.3% (twelve months ended 31 March 2015: 10.1%).

The increase in ROCE is principally driven by capital investment during previous years, including SSPP, now becoming revenue generating.

The PSDF is a capital intensive project with significant long-term infrastructure spend front-loaded. Capital employed at 31 March 2016 includes £53.7m of assets in the course of construction and land of £5.3m relating to the project, totalling £59.0m (31 March 2015: £11.4m) which were non-revenue generating in the year, and are not expected to be so until the year ending 31 March 2017. Excluding these assets from average capital employed gives an adjusted ROCE of 12.8% for the year ended 31 March 2016 and 11.2% for the prior period.

Taxation

The total corporation tax credit for the period, based on profit before tax of £7.8m, was £0.3m (year ended 31 March 2015: £3.1m).

Corporation tax paid in the year ended 31 March 2016 was £1.2m (year ending 31 March 2015: £1.2m).

The Group qualified for an aggregate film tax credit of £3.3m (year ended 31 March 2015: £4.1m) on the expenditure from the film production companies that are group subsidiaries.

The underlying rate of tax on profit before accounting for UK film tax relief from FPCs, prior year adjustments and exceptional items is 23.5% (year ended 31 March 2015: 23%).

Liquidity management

The Company's cash balance (including restricted cash of £2.0m) decreased by £5.0m during the year, which includes a £1.5m increase in the FPC cash balance relating to FPC activity that is not available for general business operations. The main drivers of this decrease are the Company's investing activities during the period, principally in relation to the PSDF Phase One development.

As anticipated capital expenditure has increased from £7.1m in the comparative year to £46.3m principally due to the PSDF Phase One development.

As a result of the share placing on 17 April 2015, the cancellation of existing bank facilities and the inflow from new banking facilities agreed on 6 March 2015, cash inflow from financing activities in the period was £21.8m (year ended 31 March 2015: £35.1m).

The movements in the Company's cash position has had an impact on net debt and gearing. At 31 March 2016 net debt was £72.8m although this included £2.0m of restricted FPC cash. Excluding this amount, net debt was £74.8m (31 March 2015: £71.9m including FPC cash; £72.5m excluding FPC cash). Gearing has decreased from 78.6% at 31 March 2015 to 58.5% at 31 March 2016, excluding fair value and loan issue costs principally due to the cash inflow from financing activities being through relatively more equity than debt at the balance sheet date.

Interest rate risk is the risk that the fair value or future values of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long term debt obligations with floating interest rates. In order to manage its interest rate risk the Company's policy is to have at least 50% of its borrowings at fixed rates of interest. To do this, the Company enters into interest rate swaps, in which the Company agrees to exchange, at specific intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principle amount.

At 31 March 2016, the Group had the following interest rate swaps in place to minimise the volatility in cash flows from a change in LIBOR:

* The instrument commenced on 1 July 2016 with contractually committed fair value recognised at 31 March 2016

The interest rate swap finance costs are charged to the Group income statement as payable. Any change in the fair value is recognised in the income statement.

Net finance costs for the period were £6.9m (year ended 31 March 2015: £3.9m) which included fair value movements on interest rate swaps of £2.9m (year ended 31 March 2015: £0.1m).

Dividend

The Board is committed to pay dividends in line with its dividend policy of not less than three times cover. The Board has declared a final dividend of 3.2p (year ended 31 March 2015: 2.8p).

The dividend is £1,837,000 and is to be paid on 3 October 2016 to shareholders on the register at close of business on 2 September 2016 (ex-dividend date of 1 September 2016).

Share issuance

On 17 April 2015 the Company raised £30m (before expenses of £1.2m) by way of a placing of 8,000,000 new ordinary shares at a price of 375 pence per new ordinary share. As a consequence of the new share issue £1.2m of costs have been charged to the share premium account.

Going concern

In assessing the going concern basis, the Directors considered the Group's business activities, the financial position of the Group and the Group's financial risk management objectives and policies. The Group meets its day-to-day working capital requirements through its bank facilities. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, economic uncertainty and the results of the European Referendum, show that the Group should be able to operate within the level of its current facilities. Although the Group is in a net current liability position of £22.7m, the Group currently has £62.0m of undrawn committed loan facilities in place. The Directors are confident these undrawn debt facilities provide sufficient headroom to support continued trading.

The Directors have specifically considered the level of capital commitment at 31 March 2016 and the projected spend on the PSDF compared with the existing financing and the additional financing completed in April 2015 (see Note 12).

Information on the Group's risks, management and exposure are set out in the "Principal Risks and Uncertainties" section of the Annual Report. 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 the financial statements.

Corporate Responsibility Review

Corporate Affairs Director's Overview

During the year ended 31 March 2016 we have continued to play a key role in working with opinion formers and stakeholders, and deploying evidence based arguments for the development of policy around the screen based industries in general, but particularly around skills and training to ensure the UK has a skilled workforce. In 2015 the total UK film production activity was £1.4 billion, the second highest total since records began, and total UK production spend for high-end television programmes was £759 million. High levels of production spend have continued with £297 million spent on film and high-end television in Q1 2016. With additional stage capacity coming on stream from 30 June 2016 at Pinewood Studios, adding to the skilled workforce to meet the growing demand from film and high-end television productions which is why we have been actively involved in developing these skills with the BFI, Creative Skillset, Film Skills Council, the British Film Commission and the Local Enterprise Partnership.

As Board Director responsible for China, a key part of our international growth strategy, I am pleased with the progress to date. During the year China accounted for 38.3% of international revenues. China is the second largest cinema box office in the world and is likely to be the largest next year. The Company currently provides consultancy services to Chinese film industry companies. During the period, the Company continued to provide advice on the design and construction of the Qingdao Oriental Movie Metropolis, a film facility comprising 45 stages for the Wanda Group. Construction on Phase One commenced in 2015 and is scheduled to open in 2017. In addition the Company completed the provision of consultancy advice to the Shanghai Film Group on its studio facilities in Chidden. The Company is in the process of opening a representative office in Beijing and exporting its UK educational and training initiatives such as The Business of Film, MOOC, and the Pinewood Studios Management Diploma to the flourishing Chinese film market.

Corporate Responsibility

Pinewood has been at the forefront of developing a more business focused approach in film making and has developed, in conjunction with the Open University, a free online course (MOOC) 'The Business of Film'. The course is available for anyone to inspire learners, whatever their background to progress and continue to develop the UK industry into the future. Nearly 10,000 people have completed the course to date.

We continue to support and encourage the next generation of employees in the UK screen-based industries. By giving training, studio information visits and work experience, the Company seeks to develop a skilled production resource base in order to maintain the high degree of excellence that draws overseas productions to this country.

During the period we have sponsored Lord Puttnam's Atticus Education Online Seminars on Creativity in Film based at Bath Spa University and the Best British Short Film Award for the Iris Prize through the use of our post production facilities.

The Company supports two undergraduate scholarships to the National Film and Television School. Pinewood offers the Rye Studio School with visits to the studios and the BFI Academy schemes which introduce young people across the country to film and television production.

Pinewood Studios, Shepperton Studios and Pinewood Studio Wales also work with local schools, colleges and universities, including Buckinghamshire New University, Amersham and Wycombe College, Chalfont Community College and the London Film School. Visits to local secondary schools and colleges (in line with section 106 for PSDF) to explain about opportunities for work experience and roles working directly for The Pinewood Studios Group and to give information on jobs in the film and TV industries.

Employees

Training is seen as serving three main purposes: helping to meet the Company's corporate aims and objectives; helping to improve the individual's performance in undertaking their current duties; and developing the individual's abilities and potential by extending knowledge, skills and influencing attitudes. During the period, 50% of training was health and safety-related and 50% related to skills training and career progression. As part of the Pinewood Studios Group Apprenticeship Scheme, seven apprentices were recruited in 2015 in electrical, plumbing, carpentry and digital. The Company's Studio Management Diploma has been expanded with 44 employees and ten external students having been enrolled on the course since inception in 2013.

The Company actively considers the position of its employees' rights through comprehensive and regularly reviewed employment practices in the areas of recruitment, training, welfare, remuneration and employee relations. As Corporate Affairs Director I have Board responsibility for these areas and regularly update the Board on relevant issues.

At the Executive Management Team level, the Group Human Resources Manager maintains responsibility for all operational human resources issues and provides the Board with a monthly report.

In addition to a published grievance policy, the Company maintains a 'Whistleblower' policy providing an opportunity for employees to raise grievances with senior management initially and then ultimately with the Senior Independent Non-Executive Director, Ruth Prior.

The Company's stated policy on Equal Opportunities recognises the diversity of individuals and has procedures in place to ensure that recruitment and promotion recognises such diversity and is not biased by any consideration of age, gender, disability, colour, racial origin, religion or sexual orientation. We provide employees with reasonable conditions of employment and career prospects.

Employees receive regular and relevant communication via the Company's intranet site Spotlight and staff briefings regarding operational issues and trading performance and, where appropriate, the views of employees are sought in guiding business practices and strategy.

Executive Management Team

The Executive Management Team members are the first line of support for the Board and their combined experience and backgrounds assist us in delivering the Group's strategy and maximising stakeholder value. They are a key part of the succession plan for the Group and their training and development needs are reviewed regularly to ensure that the talent pool is developed and retained.

Details of the Executive Management Team can be found on the Group's website, www.pinewoodgroup.com/about-us/management-team.

Health and Safety

The Company is committed to maintaining a safe working environment and monitoring its already high standards of health and safety, acknowledging its responsibilities under the Health and Safety at Work Act 1974 and subordinate regulations.

The Company places the safety of all persons in high regard and has a detailed policy that clearly details each employee's responsibilities. With the continued high levels of business and the Company's expansion, the Health, Safety and Fire Team remain focused on raising the profile of Health and Safety both within the business and with our clients. The Group Health, Safety and Fire Team are always available to provide advice supplemented by information on the Company's intranet, Spotlight, which is accessible to all staff and clients.

There has been a very slight increase in the number of minor staff accidents with no reportable injuries under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations ("RIDDOR").

M T Rainey, Non-Executive Director, had Board accountability during the year for Health and Safety issues, supported by Nicholas Smith, Commercial Director and the Executive Management Team. The Board monitors relevant Health and Safety issues each month.

Environmental

The Group's environmental policy seeks to minimise any adverse impact that the Group's business activities may have on the environment, to ensure we are compliant with the increasing number of regulatory requirements, to reduce CO² emissions and to continuously improve the environmental performance of the Group.

This policy has been endorsed by the Environment Agency who, following a recent visit to Pinewood, commented that the efforts being made were a 'truly international success'.

Key to this success has been the holistic approach taken to all environmental issues including reducing waste, the promotion of travel plans and energy management to reduce CO² emissions.

Close cooperative working not only between the different departments within the Company, but with the tenants, productions and the selected partner companies has also helped to achieve this goal.

Recycling 

The Company continues to recycle as much domestic waste as possible and diverts any non-recyclable waste from landfill to local Energy from Waste (EfW) facilities where it is incinerated to generate electricity for use in the neighbouring areas.

New operational procedures now ensure that any 'trade' waste generated by the Studios is segregated to improve recycling rates, deliver further cost savings and generate recycling rebates. This system also allows for the re-use of unwanted materials, furniture and equipment or for it to be donated to local charities and organisations.

A regular audit of the studios' waste enables its source to be identified and for it to be categorised and weighed to provide valuable information as to where and how the volumes can be further reduced.

Travel Plan

Travel Plan measures continue to be promoted to staff, tenants and productions to further reduce the number of vehicles arriving at the studios, to cut the associated CO² emissions and to encourage sustainable travel options and meet our targets for PSDF.

An independent travel survey has shown that the number of Single Occupancy Vehicles (SOV) arriving at the studio on the date of the survey constituted just 57% of all the journeys made. This is the lowest recorded rate since the first survey in 2011 when the SOV figure was at 65%.

Some of the travel initiatives include participation in the Cycle to Work scheme, provision of cycle shelters, travel information points, travel surveys, video conferencing facilities and the installation of electric car charging points. The Guaranteed Lift Home Policy and a Season Ticket Loan Scheme are also used to encourage staff to choose more sustainable modes of transport.

The two hybrid pool cars that are available when making business journeys also help to reduce CO² emissions and as they are centrally booked, this encourages members of staff to share journeys with their colleagues.

The shuttle bus services provided to and from local railway stations for anyone arriving at the studios, have the greatest impact on reducing the number of car journeys and the associated CO² emissions. In 2015 approximately 115,000 passenger journeys were made across the Group, which was the highest figure since the service began in 2008.

The addition of a new shuttle service to and from Gerrard's Cross in 2015 has assisted with the growth in passenger figures and is now becoming a well-established service.

In total approximately 678,000 passenger journeys have been made on the shuttle buses since 2008, when they first became operational.

Energy

The Group's absolute (or total) CO² emissions for 2015/16 were 4% lower than those in 2014/15 and 13% below those from the baseline year of 2010/11.

The 2015/16 benchmark CO² figure shows a reduction of 34% when compared to the Company's baseline CO² figure of 2010/11.

The significant reductions in CO² figures are achieved by the continuing investment and focus on the Group's energy saving measures and procedures identified by the Carbon Management Group. The Group consists of representatives from various Departments to identify and implement initiatives to reduce CO² emissions and energy consumption including:

• the conversion of Pinewood from gas oil to gas;

• replacing existing gas oil boilers with more energy-efficient gas fired models;

• measuring and monitoring of energy consumption;

• management of Building Management Systems (BMS);

• the identification of unnecessary energy consumption;

• extending the use of the Automated Meter Reading (AMR) system; and

• the installation of energy-efficient motors, devices and systems wherever possible, including stage lighting and boiler controls.

Compliance Schemes

The Company has to participate in the Government's Carbon Reduction Commitment Energy Efficiency Scheme (CRC), which aims to cut CO² emissions by reducing energy consumption. An 'Allowance' must be purchased from the Department of Energy and Climate Change (DECC) for every qualifying tonne of CO² emitted by the Group.

The Group must now also comply with additional mandatory schemes including the Energy Saving Opportunities Scheme (ESOS) that requires energy audits to be carried out every 4 years, Minimum Energy Performance Standards (MEPS) that sets minimum standards for a building's energy efficiency and the Heat Network (Metering and Billing) Regulations 2014 that requires specific heating systems to be identified and reported. In addition to the reporting element this scheme also requires that heat meters are installed in specified locations to assist with the monitoring of energy use.

Principal risks and uncertainties

The Board views effective risk management as a primary part of the Group's wider strategy and is fully committed to the identification, evaluation and management of significant risks facing the Group. The table below outlines the key risks and uncertainties identified by the Board, together with an outline of mitigation activities.

1. General risks

2. Financial risks

3. Operational Risks

By order of the Board,

Ivan Dunleavy

Chief Executive

10 July 2016

Group income statement for the year ended 31 March 2016 and 31 March 2015

The notes on pages 32 to 47 are an integral part of these consolidated financial statements.

Group statement of other comprehensive income for the year ended 31 March 2016 and 31 March 2015

The notes on pages 32 to 47 are an integral part of these consolidated financial statements.

Group statement of financial position at 31 March 2016 and 31 March 2015

The financial statements of Pinewood Group plc, Company number: 03889552, were approved and authorised for issue by the Board of Directors on 10 July 2016. They were signed on its behalf by:

Christopher Naisby, FCCA

Finance Director

The notes on pages 32 to 47 are an integral part of these consolidated financial statements

Group statement of cash flows for the year ended 31 March 2016 and 31 March 2015

Included within the cash and cash equivalents balance is a total of £2,040,000 (year ended 31 March 2015: £550,000) which is unavailable for general use.

The notes on pages 32 to 47 are an integral part of these consolidated financial statements.

Group reconciliation of movement in net debt for the year ended 31 March 2016 and 31 March 2015

The notes on pages 32 to 47 are an integral part of these consolidated financial statements.

Group statement of changes in equity

From 1 April 2015 to 31 March 2016

From 1 April 2014 to 31 March 2015

The notes on pages 32 to 47 are an integral part of these consolidated financial statements. 

Publication of non-statutory accounts

The financial information set out in these condensed financial statements does not constitute the Company's statutory accounts for the years ended 31 March 2016 or 31 March 2015, but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Sections 498(2) or (3) Companies Act 2006.

Extract of notes to the consolidated financial statements for the year ended 31 March 2016

1. Basis of preparation and statement of compliance

The consolidated financial statements of Pinewood Group plc and all of its subsidiaries have been prepared in accordance with IFRS as adopted by the EU as they apply to the financial statements of the Group for the year ended 31 March 2016 and applied in accordance with the Companies Act 2006.

The accounting policies which follow set out those policies which apply in preparing the financial statements for the years ended 31 March 2016 and 31 March 2015. The Group financial statements are presented in UK sterling and all values are rounded to the nearest thousand pounds (£000), except when otherwise indicated. The Group financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities (including derivative instruments) to fair value.

Going concern

In assessing the going concern basis, the Directors considered the Group's business activities, the financial position of the Group and the Group's financial risk management objectives and policies. The Group meets its day-to-day working capital requirements through its bank facilities. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, economic uncertainty and the results of the European Referendum, show that the Group should be able to operate within the level of its current facilities. Although the Group is in a net current liability position of £22.7m, the Group currently has £62.0m of undrawn committed loan facilities in place. The Directors are confident these undrawn debt facilities provide sufficient headroom to support continued trading.

The Directors have specifically considered the level of capital commitment at 31 March 2016 and the projected spend on the PSDF compared with the existing financing and the additional financing completed in April 2015 (see Note 12).

Information on the Group's risks, management and exposure are set out in the "Principal Risks and Uncertainties" section of the Annual Report. 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 the financial statements.

The Group's assessment of going concern is explained further in the Strategic report on page 17 of the Annual Report.

Basis of consolidation

The Group consolidated financial statements comprise the financial statements of Pinewood Group plc and its subsidiaries as at 31 March 2016 and 31 March 2015. All intercompany transactions, balances, income and expenses are eliminated in full on consolidation. All subsidiaries are consolidated for the financial year ending 31 March 2016 regardless of the individual entities statutory reporting date.

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where there is a loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting year during which Pinewood Group plc has control.

2. Changes in accounting policy and disclosures

The accounting policies adopted are consistent with those of the previous financial year, with the exception of newly applicable standards, amendments or interpretations issued by the International Accounting Standards Board ("IASB") that are mandatorily effective for annual periods beginning on or after 1 January 2015.

Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Annual Improvements to IFRSs 2010 - 2012 Cycle 

Annual Improvements to IFRSs 2011 - 2013 Cycle

Standards in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRSs that have been issued but are not yet effective and in some cases had not yet been adopted by the EU:

IFRS 9 Financial Instruments 

IFRS 15 Revenue from Contracts with Customers 

IFRS 16 Leases

IAS 16 and IAS 38 (amendments) Clarification of Acceptable Methods of Depreciation and Amortisation 

IAS 11 (amendments) Accounting for Acquisitions of Interests in Joint Operations

IAS 16 and IAS 41 (amendments) Agriculture: Bearer Plants

IAS 27 (amendments) Equity Method in Separate Financial Statements

IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Annual Improvements to IFRSs:

2012-2014 cycle (amendments) IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, IFRS 7 Financial Instruments: Disclosures, IAS 19 Employee Benefits and IAS 34 Interim Financial Reporting

The Directors do not expect that the adoption of the Standards listed above will have a significant impact on the financial statements of the Group in future periods, except that: IFRS 9 will impact both the measurement and disclosures of financial instruments; IFRS 15 may have an impact on revenue recognition and related disclosures; and IFRS 16 may have an impact on the accounting for leases. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of IFRS 9, IFRS 15 or IFRS 16 until a detailed review has been completed.

3. Segment information and revenue analysis

4. Exceptional administrative items

5. Exceptional income (after operating profit)

6. Interests in joint ventures

As at 31 March 2016, the Group had interests in the following joint ventures:

As at 31 March 2015, the Group had the following interests in joint ventures:

Pinewood Atlanta LLC / PAS Holdings Fayette LLC (collectively 'Pinewood Atlanta Studios')

The Group has a 40% interest in a joint venture with River's Rock LLC which has developed and operates a film studio, known as Pinewood Atlanta Studios, in Atlanta, Georgia. The Group also provides sales and marketing services to the joint venture. Pinewood Atlanta Studios is strategic to the Group's business given the similarity in nature to the Group's core Media Services operations.

The summarised financial information below represents amounts in Pinewood Atlanta Studios statement of financial position at that date, prepared in accordance with IFRSs, adjusted by the Group for equity accounting purposes.

Other joint venture interests

During the current year to 31 March 2016, the Group acquired a 50% interest in Pinewood Television Limited. As at the balance sheet date, the entity was in start-up phase, having incurred certain start-up costs and not yet commenced revenue generation.

During the prior year to 31 March 2015, the Group acquired the 50% interest in SSPP previously held by the clients of Aviva Investors as described in Note 5. As a result of the transaction, the Group now owns 100% of SSPP which has given the Group full control over the Shepperton site and future investment in the facilities there. Fuller details of this prior year transaction are included in the Annual Report and Accounts for the year ended 31 March 2015.

The summarised financial information below represents amounts in Pinewood Atlanta Studios' and Pinewood Television Limited's income statement for the year to 31 March 2016, and in SSPP's income statement until 3 December 2014, being the date of disposal of the Group's joint venture interest in the prior year.

Reconciliation of the above summarised financial information to the carrying amount of the interest in Pinewood Atlanta Studios recognised in the consolidated financial statements:

Reconciliation of movement in investment in joint ventures:

7. Finance costs

8. Taxation

 The major components of corporation tax expense are:

9. Earnings per ordinary share and dividend

Earnings per ordinary share

Basic earnings per ordinary share are calculated by dividing profit for the period attributable to the holders of ordinary equity of the parent by the weighted average number of ordinary shares outstanding during the period.

There are no potential ordinary shares outstanding from employee share schemes and therefore basic earnings per share are equivalent to diluted earnings per share.

The Group presents as exceptional items on the face of the income statement those items where the cost is 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 combined effect of any such exceptional items and fair value movements on financial derivatives.

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

Dividend paid

The Board is recommending a final dividend of 3.2p per share for approval at the Annual General Meeting to be paid on 3 October 2016 to shareholders on the register at close of business on 2 September 2016 (ex-dividend date of 1 September 2016). Based on the shares in issue at the date the Board approved the Group financial statements, this would amount to a final dividend payment of £1,837,000 (year ended 31 March 2015: £1,607,000).

10. Property, plant and equipment