PWS.L Regulatory News (PWS)

Pinewood Group plc

Interim Results for the six months ended 30 September 2015

Pinewood Group plc ("the Company"), the world leading studio and production services operator, maintained the positive momentum reported at full year and is operating its studios at near capacity as demand continues for its offer to the screen-based industries.

Strategic progress

· Raised £30m through the issue of 8,000,000 new ordinary shares

· New banking facilities of up to £135m

· Phase one of the Pinewood Studios Development Framework ("PSDF") to be completed by June 2016 within budget

· Pinewood Atlanta Studios Phase 2 development completed

· Full ownership of Shepperton Studios with review of existing masterplan underway

· Development of full service production company in the Republic of Ireland

· Completion of Phase One consultancy to Shanghai Film Group

· M T Rainey appointed to the Board

· Search process underway for additional independent Non-Executive Director

Financial highlights

*Basic and Normalised EPS based on weighted average number of shares of 56.7m for the six month period ended 30 September 2015 (six months ended 30 September 2014: 49.4m)

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

"The first six months of the year have maintained the positive momentum reported in our full year results in June 2015. Productions based at the studios during the period include the year's biggest films SPECTRE and Star Wars: Episode VII - The Force Awakens. Media Investment deal flow on behalf of third party clients remains weighted to the balance of the year.

The construction of phase one of the Pinewood expansion, designed to meet strong demand, is on schedule for completion in June 2016 and is within budget. Having taken full ownership of Shepperton Studios in the previous financial year, 100% of these earnings now accrue to the Company and we are able to review the existing masterplan for development of this facility.

The positive results reported today have continued into the second half and we are encouraged by the visibility we have for the remainder of the year and into 2016".

Enquiries

Pinewood Group plc +44 (0)1753 656732

Andrew M. Smith

Corporate Affairs Director and 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 37 stages and three dedicated digital television studios

· Pinewood Studios is home to Europe's leading studio-based underwater filming stage, as well as one of the largest exterior water tanks in Europe

· The Group now offers financing to UK film, 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

· Pinewood Studios and Shepperton Studios have hosted over 800 TV shows

· There are approximately 260 independent, media related companies based within the Pinewood, Shepperton and Wales Media Hubs

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

Business model

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

The Group has a powerful set of competitive differentiators: its acknowledged industry leadership in providing these services over an 79 year history; the power of its brand in international markets and the full service offering to its clients.

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, operations are further divided into Stage and Ancillary, which provides production facilities to clients, 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, China, the Dominican Republic and Malaysia and a joint venture in the United States of America.

The Company's television ("TV") business provides a range of 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 260 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 Group in British qualifying film and television productions.

Objectives and Strategy

The Group's mission is to:

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

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

• Leverage our brand heritage through international operations;

• Leverage our brand heritage 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 existing 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 to limit speculative risk.

• 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.

Key Performance Indicators

The Board uses a number of key performance indicators ("KPIs") to monitor the Company's performance, as well as to measure progress against the Company's objectives.

The KPIs used to measure performance, and which are discussed in further detail below for the year, are:

* Media Services EBITDA is derived by adding back depreciation and amortisation to operating profit before exceptional items

The Board believes the current suite of KPIs provide an appropriate measure of the Company's performance. However, as the business continues to implement its objectives and strategic plans, the Board recognises the business will become more complex and will continue to assess the adequacy and appropriateness of the KPIs listed above.

Media Services review

Total revenues within this segment were £32.5m for the period (six months ended 30 September 2014: £27.0m), including £0.2m of intersegment revenue (six months ended 30 September 2014: £0.6m). Inter-segment revenues relate to revenue generated from the utilisation of the Company's core services by the Group's wholly owned Film Production Companies.

Film

Film revenues for the period were £26.8m (six months ended 30 September 2014: £22.5m), an increase year on year of 19%. The increase is due to high stage utilisation across existing facilities.

The demand for the Company's facilities throughout the period continued to be strong, as reflected in stage occupancy of 87% (six months ended 30 September 2014: 86%).

The largest film production based at Pinewood Studios during the period was the 24th James Bond film, SPECTRE (Eon/MGM) 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 period include the Star Wars spin off, Rogue One (Lucasfilm), Star Wars Episode VIII (Lucasfilm), The Huntsman (Universal) and Me Before You (MGM).

DCS revenues included within the total film revenue for the period have increased by 33% over the prior period at £4.8m (six months ended 30 September 2014: £3.6m).

Notable sound post production work completed during the period included Spooks: The Greater Good (Shine Production/Kudos/Pinewood Pictures), Everest (Working Title), Steve Jobs (Universal Pictures) and Brooklyn (Wildgaze Productions).

DCS continues to enhance its offering to the growing number of feature films choosing to shoot with digital camera technology and television productions wishing to work in a digital file based environment at the Studios.

Games audio services include internationally recognised foley recording and editing; custom sound design; localisation in over 40 languages and a casting database of 4000 character voices.

Pinewood Digital have completed works on Avengers: Age of Ultron (Marvel), Ex Machina (DNA) and Pride and Prejudice and Zombies (Cross Creek Pictures).

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

Pinewood Creative was launched in September 2014 at Pinewood Studios, and has developed from the original Studio Woodmill to now offer a full range of creative services. As well as an upgraded mill facility these additional services include a full range of 3D design, model making, set building and fit out services.

Pinewood entered into a profit sharing agreement with Jewson in January 2015, to be the preferred supplier of products to Pinewood and Shepperton for an initial period of five years.

Pinewood Group entered into a joint venture with MBS Equipment on 1 January 2015 known as Pinewood MBS Lighting Limited ("PMBS"). PMBS is the exclusive lighting provider to productions based at Pinewood Studios and Shepperton Studios.

The Pinewood Creative, Jewson and PMBS initiatives are examples of the Group expanding its revenue generating capacity and leveraging its brand.

Pinewood Studio Wales

In January 2015, Pinewood Studio Wales opened. In this initial period of operation the Company has worked hard to establish the studio's market position and the Company believes this will allow the studio to become more effective in the longer term. As a result, the studio has only hosted 3 productions to date but is now home to 14 tenant companies and is targeting film and high-end TV drama productions to utilise the facility.

InternationalInternational revenues for the period included within film were £1.4m (six months ended 30 September 2014: £1.8m) and relate to sales and marketing agreements in Toronto, Malaysia and Dominican Republic, the Pinewood Atlanta Studios plus consultancy services provided in China.

Pinewood Atlanta Studios

Pinewood Atlanta Studios now has 218,000 sq ft of sound stages and 300,000 sq ft of production facility accommodation and production workshops following the completion of the Phase 2 of development in June 2015. Demand for the studios has been good with productions from Marvel and Sony occupying facilities during the six month period to 30 September 2015.

China

China's box office growth is projected to pull ever nearer to the US and exceed it by 2020. There are 100 new screens being built every week - yet the country remains under-screened. The growth in the market and the recently signed China-UK Co-Production Treaty provides the Company with a number of opportunities which it is actively assessing. Currently, the Company provides consultancy services to a number of leading 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 with the studio complex scheduled to open in 2017. In addition, the Company completed the first phase of consultancy advice to the Shanghai Film Group on its studio facilities in Chidden. Active discussions about co-productions are currently taking place.

Television

Television ("TV") revenues for the period were £1.9m (six months ended 30 September 2014: £1.7m). The Group's TV studios have hosted new productions including the innovative and technically challenging shows, Dino Autopsy (Impossible Factual) and The Alternative Election (Zeppotron), the latter of which involved an 8 hour live broadcast from the Pinewood TV studios.

Returning productions including Through the Keyhole (Talkback), Would I Lie To You? (Zeppotron), 15 to 1 (Remedy) and Duck Quacks Don't Echo (Magnum) have all utilised the Group's digital HD TV studios during the period.

The Group has also accommodated the BBC Dramas W1A, Stag and Cuckoo and the large light entertainment show Bring The Noise (Twentythree 06) on Pinewood's multi-use stages.

The Television market remains buoyant. Light entertainment continues to dominate the schedule of traditional Broadcasters. The newer pay-on-demand platforms continue the drive to create high-end television productions, and are motivated to film in the UK by the UK High-End TV tax credit. During the period the Company has not accommodated any high end television productions at its Pinewood and Shepperton sites, as these have focussed on film activity.

Media Hub

Media Hub revenues inclusive of service, utility and facility charges for the period were £3.8m (six months ending 30 September 2014: £2.8m). The increase is predominantly due to Shepperton Media Hub revenues of £0.6m now being consolidated in revenue throughout the period as a result of the Group acquiring 100% ownership of the Shepperton Studios Property Partnership ("SSPP") in December 2014.

The total number of Media Hub companies accommodated at the end of the period was 260 at Pinewood Studios, Shepperton Studios and Pinewood Studio Wales with occupancy of 95% across a net lettable area of 377,000 sq ft (six months ended 30 September 2014: 241 companies, 97% occupancy, 362,000 sq ft).

Gross and operating margins

The Media Services segment gross margin, excluding intersegment revenues, for the six months ended 30 September 2015 is 43.2% (six months ended 30 September 2014: 41.9%). The year on year variance is principally driven by the acquisition of 100% ownership of SSPP.

The Media Services operating margin is 25.8% (six months ended 30 September 2014: 23.1%). The increase in operating margin is again due to the acquisition of SSPP.

Return on capital employed

The Company measures return on capital employed ("ROCE") for the Media Services segment by reference to annualised operating profit before exceptional items, including intersegment profit and share of results of joint ventures, as a percentage of average capital employed, being total equity plus interest bearing loans and borrowings. ROCE for the twelve months ended 30 September 2015 was 10.2% (twelve months ended 30 September 2014: 9.3%).

The PSDF is a capital intensive project with significant long-term infrastructure spend front-loaded. Capital employed at 30 September 2015 includes £24.5m of assets in the course of construction and land of £5.3m relating to this project, totalling £29.8m (30 September 2014: £9.5m) which are not yet revenue generating, and are not expected to be so until the year ending 31 March 2017. Excluding these assets from average capital employed gives a ROCE of 11.7% for the 12 months ended 30 September 2015 and 10.9% for the prior period.

Media Investment review

Segment revenue for the period was £6.0m (six months ended 30 September 2014: £12.1m). Due to the timing of deal flow, the Company has only had 3 live FPCs in the period (six months ended 30 September 2014: 7) and as a result revenue from FPCs is £5.0m (six months ended 30 September 2014: £11.6m).

Investment advisory

Investment advisory revenue for the period was £0.4m (six months ended 30 September 2014: £0.4m).

The Company continues to advise on funds totalling £55m, across film and television production and game development and publishing. During the period, Pinewood Pictures has advised on funding by the Welsh Government for feature films Don't Knock Twice (from Welsh company Red and Black Films) and Their Finest Hour and a Half (a Lone Scherfig film, produced by Amanda Posey and Stephen Woolley); and on funding by the Isle of Man Treasury of four massively multiplayer online games, to be published by new publisher Gamesco and feature film Mindhorn (from Scott Free).

During the period Pinewood Pictures distributed the feature films Spooks: The Greater Good and Pressure.

In addition to investments made by these third party funds, the Group also provided film finance totalling £0.85m to its wholly-owned subsidiary Film Production Companies ("FPCs") (six months ended 30 September 2014: £1.0m) and £0.15m to third party FPCs (six months ended 30 September 2014: £Nil).

Film production companies

Revenue from FPCs for the period totalled £5.0m (six months ended 30 September 2014: £11.6m). An FPC is considered active from the close of film financing until the production is completed and delivered.

Included within FPC revenue is revenue relating to Star Wars Episode VIII (Lucasfilm). The Company provided production services during the period through its wholly owned subsidiary Space Bear IR DAC, a company based in Ireland.

Kill Your Friends, produced by the Group in 2014 featured at the Toronto International Film Festival.

The operating loss from FPC activity of £1.1m (six months ended 30 September 2014: £2.8m) as expected is largely offset by UK Film tax relief of £1.0m (six months ended 30 September 2014: £2.6m).

Included in the Group cash balance (excluding overdraft) is £1.8m of amounts restricted solely for use in the production of specific FPC operations (six months ended 30 September 2014: £4.3m).

The decrease year on year on the FPC-related balances is largely due to the timing of active FPCs and movement in restricted cash.

Loss after tax

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

At the after tax level, the loss after tax for the segment is £0.1m for the period (six months ended 30 September 2014: £0.3m loss) due to an increase in other income and commissions.

Group performance

Total consolidated revenue for the period is £38.2m (six months ended 30 September 2014 restated: £38.5m). Due to the timing of deal flow in Media Investment, the Company has only had 3 live FPCs in the period (six months ended 30 September 2014: 7) and as a result revenue from FPCs is £5.0m (six months ended 30 September 2014: £11.6m).

Profit after tax for the period ended 30 September 2015 was £4.3m (six months ended 30 September 2014: £3.8m). The FPC loss before tax is largely offset by the UK Film Tax relief and therefore the revenue movement noted above has not impacted Group profits. The year on year growth is due to increased film activity in Media Services and a reduced loss in Media Investment.

Basic and diluted earnings per share for the period were 7.6p based on a weighted average share capital of 56,666,757 shares (six months ended 30 September 2014: 7.7p). Normalised basic and diluted earnings per share for the period were 9.0p (six months ended 30 September 2014: 7.7p).

EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation) for the period was £11.3m (six months ended 30 September 2014: £5.6m), including £1.3m of Media Investment loss (six months ended 30 September 2014: £3.6m loss).

Taxation

The total corporation tax charge for the period, based on profit before tax of £4.4m, was £0.1m (six months ended 30 September 2014: £2.0m credit).

The Group qualified for an aggregate film tax credit of £1.0m (six months ended 30 September 2014: £2.6m) on the expenditure from the FPCs that are Group subsidiaries.

The underlying rate of tax on profit before accounting for UK film tax relief from FPCs is 24% (six months ended 30 September 2014: 21%).

Liquidity management

The Company's cash balance (including restricted cash of £1.8m) decreased by £7.5m during the period, which includes a £1.2m increase 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, and movements in working capital. A working capital outflow in the period of £6.3m (six months ended 30 September 2014: £8.9m inflow) includes an outflow of £0.6m relating to FPC restricted cash (six months ended 30 September 2014: £5.7m inflow). An outflow from Media Services deferred income of £1.8m, an outflow from VAT and payroll taxes due to timing differences of £2.0m (most significantly relating to PSDF invoice payments and LTIP costs), and the prepayment of rent, rates and insurance costs of £1m are the principal contributors to the working capital outflow in the period.

Capital expenditure has increased from £2.4m in the comparative six month period to £15.9m principally due to the PSDF 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 £4.8m (six months ended 30 September 2014: £0.8m).

The movements in the Company's cash position has had an impact on net debt and gearing. At 30 September 2015 net debt was £55.8m although this included £1.8m of restricted FPC cash. Excluding this amount, net debt was £57.6m (30 September 2014: £31.8m including FPC cash; £36.1m excluding FPC cash). Gearing has decreased from 78.6% at 31 March 2015 to 43.0% at 30 September 2015, excluding fair value and loan issue costs principally due to the cash inflow from financing activities.

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% (31 March 2014: 50%) of its borrowings at fixed rates of interest. To offset 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 30 September 2015, the Group had the following interest rate swaps in place to minimise the volatility in cash flows from a change in LIBOR:

* Cash flow hedge commences on 1 July 2016 but fair value recognised at 30 September 2015.

** Cash flow hedge commences on 1 January 2016 but fair value recognised at 30 September 2015.

The interest swap finance costs are charged to the Group income statement as payable on a quarterly basis in March, June, September and December. Any change in the fair value is recognised in the income statement.

Net finance costs for the period were £3.2m (six months ended 30 September 2014: £1.2m) which included fair value movements on cash flow hedge of £1.0m (six months ended 30 September 2014: £Nil).

Dividend

The Board is committed to pay dividends in line with its dividend policy of not less than three times cover and as a result the Board has declared an interim dividend of 0.8p (six months ended 30 September 2014: 0.7p).

The dividend is to be paid on 8 February 2016 to shareholders on the register at close of business on 8 January 2016 (ex-dividend date of 7 January 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

Having considered the performance of the Group for the period to 30 September 2015 above and future developments, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.

The Group has primary banking facilities in place until 30 April 2019. Although the Group is in a net current liability position of £20.8m, principally driven by the deferred income balance which arises as a result of the Group's billing profile on major contracts, the Group has £81.5m of undrawn committed loan facilities in place. The Group also has £9.4m of asset financing facility available to be drawn upon including £1.6m of a pre-approved facility. The Directors are confident these undrawn debt facilities provide sufficient headroom to support continued trading.

The Directors have specifically considered the level of capital commitment at 30 September 2015 and the projected spend on the PSDF compared with the financing facilities that have been put in place during the period.

The Group also has a strong brand and reputation in the marketplace with a growing number of customers and suppliers in the film and television industry. As a consequence, the Directors believe that the Group is well placed to manage its business risks and operations successfully.

Future Developments

The first six months of the year have maintained the positive momentum reported in the Company's full year results in June 2015. Productions based at the studios during the period include the year's biggest films SPECTRE and Star Wars: Episode VII - The Force Awakens. Media Investment deal flow on behalf of third party clients remains weighted to the balance of the year.

The construction of phase one of the Pinewood expansion, designed to meet strong demand, is on schedule for completion in June 2016 and is within budget. Having taken full ownership of Shepperton Studios in the previous financial year, 100% of these earnings now accrue to the Company and the Company is able to review the existing masterplan for development of this facility.

The positive results reported today have continued into the second half and the Company is encouraged by the visibility it has for the remainder of the year and into 2016.

INDEPENDENT REVIEW REPORT TO PINEWOOD GROUP 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 2015 which comprises the condensed Group income statement, the condensed Group statement of other comprehensive income, the condensed Group statement of financial position, the condensed Group statement of cash flows, the condensed Group reconciliation of movement in net debt, the condensed Group statement of changes in equity and the related notes 1 to 18. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules of the London Stock Exchange.

Deloitte LLP

Chartered Accountants and Statutory Auditor

Manchester, United Kingdom

30 November 2015

Condensed Group income statement for the six months ended 30 September 2015

Condensed Group statement of other comprehensive income

for the six months ended 30 September 2015

Condensed Group statement of financial position as at 30 September 2015

The interim financial statements of Pinewood Group plc, company number: 03889552, were approved and authorised for issue by the Board of Directors on 30 November 2015 and are signed on its behalf by:

Christopher Naisby, FCCA

Finance Director

Condensed Group statement of cash flows for the six months ended

30 September 2015

Condensed Group reconciliation of movement in net debt

for the six months ended 30 September 2015

Condensed Group statement of changes in equity

From 1 April 2014 to 30 September 2015

Notes to the condensed Group consolidated financial statements at 30 September 2015

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

The unaudited interim condensed Group financial statements of Pinewood Group plc (formerly Pinewood Shepperton plc) for the six months ended 30 September 2015 were authorised for issue by the Board of Directors on 30 November 2015 and the statement of financial position was signed on the Board's behalf by the Finance Director. Pinewood Group plc ("the Company") is a public limited company incorporated and domiciled in England and Wales. The registered office is located at Pinewood Studios, Pinewood Road, Iver Heath, Buckinghamshire, SL0 0NH, UK. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.

The unaudited interim condensed consolidated financial statements for the six months ended 30 September 2015 have been prepared in accordance with International Accounting Standard 34 Interim financial reporting, as adopted by the European Union.

2. Basis of preparation and accounting policies

Basis of preparation

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements as defined in Section 435 of the Companies Act 2006, and should be read in conjunction with the Group's Annual Report and Accounts for the year ended 31 March 2015, from which comparative information included in the interim condensed consolidated financial statements has been extracted. The consolidated financial statements for the year ended 31 March 2015, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union, upon which the auditors issued an unqualified opinion, and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006, have been delivered to the Registrar of Companies.

Going concern

Information on the Group's risks, management and exposure are set out in the "Key business risks" section of the Group's Annual Report and Note 28 "Financial risk management, objectives and policies" of the Group's Annual Accounts for the year ended 31 March 2015. Although the Group is in a net current liability position of £20.8m, the Group has £81.5m of undrawn committed loan facilities in place. The Group also has £9.3m of asset financing available to draw upon including £1.6m of a pre-approved facility. The Directors are confident these undrawn debt facilities provide sufficient headroom to support continued trading. The Directors, therefore consider that the Group has adequate resources to continue in the operational business for the foreseeable future and as such it is appropriate to adopt the going concern basis in preparing these consolidated financial statements.

Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's Annual Accounts for the year ended 31 March 2015, with the exception of newly applicable standards effective for annual periods beginning on or after 1 January 2015, none of which have a material impact on these accounts.

The Group has not early adopted any standard, interpretation or amendment that was issued but is not yet effective.

Significant accounting judgements and estimates

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed in Note 18 "Principal Risks and Uncertainties".

3. Segment information and revenue analysis

The Group identifies its operating segments based on a combination of factors, including the nature and type of service provided and differences in regulatory environment. Operating segments are aggregated where there is a high degree of consistency across these factors, and the segments have similar economic characteristics. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The Group has determined it has two reportable segments, Media Services, which provides studio and related services to the film, television and wider creative industries, and Media Investment, which provides content investment and production services, principally to the film industry.

The accounting policies of all operating segments are the same as those described in Note 2, "Basis of preparation and accounting policies".

The Group accounts for intersegment sales and transfers as if the sales or transfers were to third parties, i.e. at current market price.

Segment data for the period ended 30 September 2015 and 30 September 2014 is presented below:

During the period, the Group provided film finance totalling £850,000 to its wholly owned subsidiary FPCs (six months ended 30 September 2014: £969,000) and £150,000 to a third party FPC.

4. Interests in joint ventures

As at 30 September 2015 and 31 March 2015, the Group had interests in the following joint ventures:

Pinewood Atlanta LLC / PAS Holdings Fayette LLC

The Group has a 40% interest in a joint venture with River's Rock LLC which has developed and operates a world class 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.

Pinewood Atlanta Studios is the Group's only joint venture as at 30 September 2015. As at 30 September 2014, the Group had the following additional interests in joint ventures:

Shepperton Studios Property Partnership ("SSPP")

Up until 3 December 2014, the Group had a 50% interest in SSPP, an entity controlled jointly with a third party, Aviva Investors. On 3 December 2014, the Group acquired the 50% interest in SSPP previously held by clients of Aviva Investors. Full details of the transaction are included in Note 9 of the Group's Annual Accounts for the year ended 31 March 2015. The comparative figures for the period ended 30 September 2014 include the Group's 50% share in SSPP on an equity accounting basis. The current period to 30 September 2015 includes SSPP on a fully consolidated basis.

Shepperton Studios (General Partner) Limited

The Group also had a 50% interest in Shepperton Studios (General Partner) Limited until 3 December 2014. On that date, the Group acquired the other 50% interest as part of the SSPP transaction outlined above. There are no material amounts consolidated for this entity in either the current or prior period.

Reconciliation of movement in investment in joint ventures:

5. Finance costs

6. Taxation

The current corporation tax charge for the period, arising on profit before tax of £4.4m, was £0.1m (six months ended 30 September 2013: £2.0m credit). The corporation tax charge for the year includes £1.0m of UK film tax relief (six months ended 30 September 2014: £2.6m) which reflects the accounting treatment of the Group's FPCs and offsets the operating loss from Media Investment in respect of these FPCs.

The underlying rate of tax on profit before accounting for UK film tax relief from film production companies, prior year adjustments and exceptional items is 24% (six months ended 30 September 2014: 21%).

Reconciliation of the total tax charge

A reconciliation between the tax expense and the product of accounting profit multiplied by the standard rate of corporation tax in the UK for the six months ended 30 September 2015 is:

7. Earnings per ordinary share and dividend

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

Diluted earnings per ordinary share are calculated by dividing net profit for the period attributable to the holders of ordinary equity by the weighted average number of ordinary shares outstanding during the period adjusted for the effects of dilutive potential ordinary shares resulting from employee share schemes.

The Group presents as exceptional items on the face of the income statement those items where the cost or income is one off in nature and of such size or incidence that the additional disclosure is required for the reader to understand the financial statements. Basic and diluted earnings per share are also presented adjusting for the effect of the exceptional items and fair value movements.

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

Dividends paid

The final dividend for the year ended 31 March 2015 was paid on 5 October 2015.

The Board of Directors approved and declared an interim dividend of 0.8p per share for the year ended 31 March 2016 on 30 November 2015. The dividend is to be paid on 8 February 2016.

8. Share capital and reserves

Share Capital

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.

On 17 April 2015, 8,000,000 new ordinary shares of par value 10p were issued for cash and admitted to trading on AIM, giving rise to gross proceeds of £30.0m. The proceeds of this share issue were used to reduce drawn bank debt.

Share Premium

As a result of the issue of new ordinary shares at an exercise price of 375p, the Share Premium reserve was credited with £29,200,000, before directly attributable expenses totalling £1,222,000 were deducted.

Capital redemption reserve

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

Merger reserve

On acquiring Shepperton Studios Limited the Company issued ordinary shares as part of the consideration. Merger relief was taken in accordance with Section 131 of the Companies Act 1985 (since succeeded by Section 612 of the Companies Act 2006), and hence £0.3m was credited to the merger reserve.

9. Property, plant and equipment

Assets under construction at 30 September 2015, £24.5m, relate to costs capitalised under the PSDF. These are not depreciated.

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

10. Intangible assets

The goodwill of £5.6m (30 September 2014: £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 2015 and did not give rise to any indication of impairment.

The recoverable amount has been determined based on a value in use calculation using cash flow projections based on the Group's long range plan. The pre-tax cash flows over this period support the carrying value of the goodwill.

The key assumptions used to determine the recoverable amount for the cash generating unit were discussed in the Group's Annual Report and Accounts for the year ended 31 March 2015.

11. Trade receivables

12. Prepayments and other receivables

13. Cash

Included within the cash and interest bearing loans and borrowings balance per the statement of financial position at the period end are amounts which are unavailable for general use. These amounts relate to funds reserved solely for use in the production of specific Pinewood Film Production Company operations. The reconciliation below shows the breakdown of total cash per the statement of financial position at the period end:

The condensed Group statement of cash flows on page 18 presents the cash flows for the Group, which include cash flows in respect of both the Media Services and Media Investment segments. Included within the Media Investment segment, the cash flows of the Group's FPCs represent movements on the Group's restricted funds. Excluding these restricted cash flows, the movement of the Group's unrestricted cash flows can be presented as follows:

Unrestricted cash flows for the six months ended 30 September 2015