PWS.L Regulatory News (PWS)

Pinewood Shepperton plc

Publication of the preliminary results for the year ended 31 March 2013

Pinewood Shepperton plc ("the Company"), a leading provider of services to the global film and television industry, today publishes its preliminary results for the year ended 31 March 2013 ("the year").

Key developments during the year

·; The Company completed a successful refinancing of its main banking facilities in May 2012.

·; The Company's shares were removed from trading on the Main Market of the London Stock Exchange, delisted from the Official List and admitted to trading on AIM, alongside with a £5.4m placing of new ordinary shares.

·; Completed a multimillion pound investment programme to expand the Company's digital offering and HD television facilities.

·; Agreement signed with the Isle of Man Treasury to source and advise on film investment opportunities for a £25 million fund.

·; Commenced building of a new £7.5 million, 45,000 sq ft stage, workshops and offices facility designed to accommodate television and film productions.

Key developments since year end

·; Joint venture agreement with River's Rock LLC, forming Pinewood Atlanta LLC, which will create world class studio facilities for the production of film, television, music and video games in Georgia, USA.

·; 50:50 joint venture agreement with Seven Stars Media Limited, to assess a number of business proposals in the growing entertainment market in China.

·; Pinewood Studios Development Framework refused planning permission by South Bucks District Council Planning Committee - Public Inquiry to start 19 November 2013.

Financial highlights

·; Revenue £55.6m (15 month period ended 31 March 2012: £63.0m).

·; Operating profit £5.4m (15 month period ended 31 March 2012: £2.7m).

·; Operating profit before exceptional items £8.4m (15 month period ended 31 March 2012: £13.2m).

·; Operating profit from Media Services activities £10.5m (15 month period ended 31 March 2012: £13.9m).

·; Basic earnings per share 3.6p (15 month period ended 31 March 2012: 6.3p loss)

·; Basic earnings per share adjusted for exceptional items 10.1p (15 month period ended 31 March 2012: 14.6p).

·; Final dividend of 1.5p per share declared (15 month period ended 31 March 2012: nil).

·; Net debt of £44.7m (31 March 2012: £50.4m) and gearing ratio of 55.8% (31 March 2012: 69.0%).

Commenting on the results, Ivan Dunleavy, Chief Executive, said:

"2012/13 saw another year of strong growth in a globally competitive market. The trend for rising demand for the Studios' facilities, especially in film, has continued.

"The Company has made a positive start to the new financial year. Since 1 April 2013, the Company has been experiencing high levels of utilisation in television, playing host to a number of productions and several film productions have contracted stages.

"Our customers are concerned that the Company has sufficient capacity to meet their needs. On 31 May 2013, the Company submitted to the Planning Inspectorate an appeal against the refusal of planning permission for the Pinewood Studios Development Framework ("PSDF") by South Bucks District Council to create additional capacity at Pinewood Studios. The Public Inquiry is due to start on 19 November 2013. The need for further, effective infrastructure to meet demand for the UK is a priority.

"The Board looks forward to the future with confidence."

Enquiries

Pinewood Shepperton plc +44 (0)1753 656732

Ivan Dunleavy - Chief Executive

Andrew Smith - Director of Strategy and Communications and Company Secretary

N+1 Singer +44 (0)207 496 3170

Richard Lindley / Sandy Fraser

Notes to editors

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

·; Pinewood, Shepperton and Teddington Studios together accommodate 34 stages, five dedicated digital television studios and five digital presentation studios

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

·; Pinewood and Shepperton Studios have been home to over 1,500 films in more than 75 years

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

·; There are over 241 independent, media related companies based at Pinewood and Shepperton's Media Hub

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

·; The Group now offers financing to UK film and television production as part of its growing range of services

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

Pinewood Shepperton plc has again delivered a strong performance with revenues of £55.6m for the year ended 31 March 2013 (15 month period ended 31 March 2012: £63.0m).

The Company continued to invest in its facilities to ensure it remains the preferred destination for the screen based industries. These investments have included a new 45,000 sq ft facility which will comprise a state-of-the art 30,000 sq ft stage together with 15,000 sq ft of workshops and offices designed to accommodate television and film productions. The £7.5m facility will be completed by September 2013. The Company also completed a £2.1m investment programme to expand its digital offering and high definition ("HD") television facilities. 

The Company signed an agreement with the Isle of Man Treasury ("IOMT") to source and advise on film investment opportunities for the £25m fund established by the IOMT and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT. Since signing the agreement, the fund, known as Pinewood Pictures, has co-invested in three films, including one investment made post year end.

South Bucks District Council Planning Committee refused planning permission for the Pinewood Studios Development Framework ("PSDF"), a £200m project expected to create 3,100 new jobs. The Company remains fully committed to the PSDF, a long term scheme of national significance designed to address increasing global demand for capacity in the UK and deliver growth for the next 15 years. The Company lodged an appeal against the decision and a Public Inquiry will begin on 19 November 2013.

The Company's international strategy has also continued to progress, announcing two major new initiatives in China and the United States of America post year end. These new partnerships add to the Company's existing presence in Canada, the Dominican Republic, Germany and Malaysia and give the Company access to regions of the world where content production is growing.

The Company completed a successful refinancing of its main banking facilities in May 2012. Pinewood's shares were delisted from the Official List and admitted to trading on AIM on 23 July 2012, alongside a £5.4m placing of new ordinary shares. The Company now has three major shareholders, Goodweather Investment Management Limited (58.05%), Warren James Holdings Ltd (26.69%) and the Treasury Department of the Isle of Man Government (9.90%). All three major shareholders have independently stated their long-term support for the Company.

On 25 October 2012 Steve Christian joined the Board as Executive Director responsible for coordinating the investment advice to the Isle of Man Treasury and on 27 November 2012, Ruth Prior joined the Board as an Independent Non-Executive Director and chairs the Audit Committee. Subsequent to the year end, on 29 April 2013, Thomas Allison was appointed to the Board as a Non-Executive Director replacing Mark Senior, as a Peel Holdings (the parent company of Goodweather Investment Management Limited) nominated Non-Executive Director. Mark Senior was appointed as a Non-Executive Director in 2011. I would like to thank Mark for his valuable contribution to the Board.

The Board is committed to paying dividends in line with its dividend policy of not less than three times cover and as a result the Board has decided to recommend a dividend of 1.5p per share.

Pinewood Shepperton's results for the year were achieved following major contributions by my fellow Directors and especially the staff. I thank them for their continued support.

Lord Grade of Yarmouth, CBE,

Chairman

26 June 2013

Operating Review 

During the year ended 31 March 2013, the Company amended its operational reporting structure to improve its management of several new activities. As a result, the Company has identified 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.

In addition an analysis of the composition of operating profit between Media Services, Media Investment in respect of Film Production Companies, Media Investment in respect of activities excluding Film Production Companies and exceptional items has been included within the Group Income Statement to provide improved clarity of the constituent elements of the Group's operating profit.

MEDIA SERVICES

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

Film

Film revenues for the year ended 31 March 2013 were £35.2m (15 month period ended 31 March 2012: £43.4m).

The largest film production based at Pinewood Studios during the year was Maleficent (Disney) and at Shepperton Studios was Thor: The Dark World (Marvel). Productions which used the Company's facilities and services during the year included Fast and Furious 6 (Universal), Jack Ryan (Paramount), The Muppets Again (Disney) and Kick-Ass 2 (Universal), plus additional filming for 47 Ronin (Universal), Gravity (Warner Bros.) and World War Z (Plan B Entertainment).

Digital Content Services ("DCS") revenues included within the total film revenue for the year ended 31 March 2013 were £6.2m (15 month period ended 31 March 2012: £8.0m).

DCS provides sound and picture post production, media storage, management and distribution for original English language and internationally re-versioned content. During the year a wide variety of creative and process-based services were delivered to film, television and video game clients.

Notable sound post production work completed during the period included the UK's first Dolby Atmos mix of Danny Boyle's latest project Trance (Pathe/Fox)and also of Alfonso Cuaron's Sci-Fi thriller Gravity (Warner Bros.). 

International re-versioning of sound-tracks and the long-term agreement with Disney Character Voices International continues to perform well, as do established and growing relationships with many major film, television and video game companies.

A new product was launched during the period called Digital Production Services ("DPS"); the secure management of the data generated from 2D and 3D digital film shoots on-set and on location. The inaugural client was Marvel's Thor: The Dark World, that was shot at Shepperton Studios.

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. This has been achieved by taking advantage of the investment in core networking infrastructure undertaken at the Studios over the last four years, which now allows network speeds of 10Gb/s. This, in conjunction with the Data Centre, Digital Screening Services, the Media Transfer Centre and additional high speed network services has led to increased demand from customers.

International International revenues for the year included within film, principally representing sales and marketing fees, were £1.0m (15 month period ended 31 March 2012: £1.2m). Pinewood is an expanding global brand, delivering premium services around the world. Its international initiatives, currently in six regions, are progressing well. The Company continues to actively explore strategic opportunities in other regions of the world. In the United States of America, post year end, the Company announced a new joint venture called Pinewood Atlanta LLC, which will work to initially develop 288 acres of land south of Atlanta, Georgia, into world class studio facilities for the production of film, television, music and video games. The business will operate under the Pinewood trademark and Pinewood has received 40% of the shareholding in the joint venture, to which Pinewood will provide sales and marketing services. Phase 1 will comprise 100,000 sq ft of film stage space, 50,000 sq ft of workshops and 200,000 sq ft of production facility and media campus space. Construction has commenced on the Pinewood Atlanta Studio build with completion scheduled in mid 2014.

In China, the Group has entered into a 50:50 joint venture agreement with Seven Stars Media Limited, one of China's leading private media groups which provides content creation and distribution, media services and events. The joint venture, to be called "Song Lin", initially will assess a number of business proposals in the growing entertainment market in China. Under the terms of the joint venture, Pinewood will provide its expertise with limited capital investment.

The Company has a sales and marketing agreement with Pinewood Toronto Studios ("PTS").

During the year, PTS attracted a number of high profile film and television productions which included Carrie (MGM/Screen Gems), RoboCop (MGM/Sony) and the Canadian television sitcom Spun Out (CTV). 

Pinewood Iskandar Malaysia Studios is in the final phase of construction with stages and associated facilities due for completion in July 2013, when film stages, workshops and offices will be operational. TV studios and post production facilities went live following completion of the technical installation and systems integration at year end. The facility consists of five film sound stages totalling 100,000 sq ft and two fully integrated TV studios totalling 24,000 sq ft. A full range of workshops, offices, art departments, artists' facilities and technical space will also be available.Construction of the water tank, offices and ancillary space at Pinewood Indomina Studios in the Dominican Republic has been completed. The tank and equipment have been tested and are now open. All special effects equipment has been manufactured and is on site. By the middle of 2014 the Company expects 53,000 sq ft of film stages will be completed along with workshops, adding a further 90,000 sq ft of film and television facilities.

Television

Television ("TV") revenues for the year were £5.2m (15 month period ended 31 March 2012: £10.2m), which includes a four-month period where Pinewood's television studios were closed for a £1.8m refurbishment.

The Company has a leading television business which provides a range of unique TV production facilities, often utilising its stages and DCS offerings to host and service large 'event' television productions, such as the recent semi-finals and finals of the BBC's The Voice.

The Company has developed its television offering at Pinewood Studios by investing significantly to increase its ability to provide a comprehensive range of production facilities to the TV community including high definition ("HD") television studios, film stages and post production services to support all genres of television production. The Company believes this comprehensive range of facilities continues to give its business a competitive edge.

Pinewood and Teddington television studios played host to new and repeat business from Would I Lie To You (Zepperton), The Rob Brydon Show (talkbackTHAMES), Not Going Out (Avalon), Count Arthur Strong (TalkbackTHAMES) and Bedtime Live (Twofour). During the year, television productions such as Got To Dance (Princess Productions), Love Machine (Shine) and I Love My Country (Avalon) utilised large film stages at Shepperton and Pinewood Studios.

In addition, complete service packages - incorporating stages, sound and picture post production - were delivered to productions such as the latest series of the BBC's comedy panel show Would I Lie to You (Zepperton) and the period drama series The Paradise (BBC).

In April 2013, the Company welcomed the introduction of new fiscal incentives for high-end filmed television drama.

Pinewood was also pleased to welcome Camelot on site in January 2013. Pinewood will broadcast the National Lottery live each week for a minimum of four years, with an option for a further two years, and is constructing a purpose built facility, TV3, for Camelot to take possession of from August 2013.

Teddington Studios Limited has exercised an option to terminate its leasehold interest in Teddington Studios on 24 December 2014. The Group has elected to consolidate the activity from this site with the activities at Pinewood during 2013 and as a result has determined the lease on the Studio is an onerous contract. The estimated costs under the onerous lease are fully provided for in the income statement for the year ended 31 March 2013, although the estimate may vary as a result of changes in the utilisation of the leased premises.

Media Hub

During the year the Company's Media Park offering was rebranded the "Media Hub". Gross revenues for the year (including the Company's 50% interest in the Shepperton Studios Property Partnership) were £6.3m (15 month period ended 31 March 2012: £8.0m).

The total number of Media Hub companies accommodated during the year was 241 at Pinewood and Shepperton Studios; occupancy at the end of the twelve month period was 97% (15 month period ended 31 March 2012: 276 companies, 92% occupancy). The Company continued to rationalise and refurbish its stock of buildings available for both Media Hub occupiers and productions.

The Pinewood Studios Development Framework ("PSDF")

PSDF is a £200m proposed long term scheme of national significance designed to address increasing global demand for capacity in the UK and deliver growth for the next 15 years. It comprises a substantial expansion of the existing Pinewood Studios by adding a total of 100,000 sq m of new facilities, including 15 studios and stages, workshops, production offices and streetscapes for filming. Once complete, this would make a major contribution to achieving Government priority objectives to grow the UK's creative industries, promote growth and create an estimated 3,100 new jobs. South Bucks District Council Planning Committee rejected the application on 15 May 2013. The Company lodged an appeal against the decision on 31 May 2013. The Public Inquiry will start on 19 November 2013.

Total costs incurred since the inception of PSDF to 31 March 2013 were £1.8m, and have been capitalised within 'Property, plant and equipment'. 

MEDIA INVESTMENT

Media Investment revenue for the year was £8.9m (15 month year to 31 March 2012: £1.4m).

Pinewood Productions' (formerly known as Pinewood Films) co-investment of selected UK independent films continues to progress. Three further films were announced during the year, bringing the total to five, namely: A Fantastic Fear of Everything (Pinewood Films/Keel Films), Last Passenger (Pinewood Films/Future Films/BFI /Pathe Pictures), Belle (Pinewood Films/DJ Films/BFI/CinemaNX/Bankside), Dom Hemingway (Pinewood Films/Recorded Picture Co/CinemaNX/Hanway Films) and Camera Trap (Pinewood Productions/Pinewood Pictures/GasWorks Media).

The Company announced on 1 October 2012 that it had signed an Agreement with the Isle of Man Treasury ("IOMT") to source and advise on film investment opportunities for the £25m Media Development Fund established by the IOMT, and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT to be known as 'Pinewood Pictures'. On 22 October 2012, the Company further announced that it had received the consents required from the Financial Services Authority for the Agreement to become unconditional and accordingly the Agreement came into effect on 25 October 2012.  During the year Pinewood Pictures advised on investments by IOMT in two films - Camera Trap (Pinewood Productions/Pinewood Pictures/GasWorks Media), a co-investment with Pinewood Productions, and The Christmas Candle (Pinewood Pictures/Christmas Candle LLC). Under the agreement, the Company earned revenue from the IOMT of £0.2m during the year as an annual management fee.

Dividend

The Board is committed to pay dividends in line with its dividend policy of not less than three times cover and as a result the Board has recommended an increased final dividend of 1.5p (15 month period ended 31 March 2012: nil), making a total dividend for the year of 2.0p (15 month period ended 31 March 2012: nil).

Outlook

2012/13 saw another year of strong growth in a globally competitive market. The trend for rising demand for the Studios facilities, especially in film, has continued.

The Company has made a positive start to the new financial year. Since 1 April 2013, the Company has been experiencing high levels of utilisation in television, playing host to a number of productions and several film productions have contracted stages.

Our customers are concerned that the Company has sufficient capacity to meet their needs. On 31 May 2013, the Company submitted to the Planning Inspectorate an appeal against the refusal of planning permission for the Pinewood Studios Development Framework ("PSDF") by South Bucks District Council to create additional capacity at Pinewood Studios. The Public Inquiry is due to start on 19 November 2013. The need for further, effective infrastructure to meet demand for the UK is a priority.

The Board looks forward to the future with confidence.

Ivan DunleavyChief Executive

26 June 2013

Financial Review

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

Segment information

During the year ended 31 March 2013, the Company amended its operational reporting structure to improve its management of several new activities undertaken since the initial adoption of IFRS 8 Operating Segments ("IFRS 8"). As a result, the Company has identified 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.

In addition, an analysis of the composition of operating profit between Media Services, Media Investment in respect of Film Production Companies, Media Investment in respect of activities excluding Film Production Companies and exceptional items has been included within the Group Income Statement to provide improved clarity of the constituent elements of the Group's operating profit.

Revenue

Total revenues for the year were £55.6m (15 month period ended 31 March 2012: £63.0m).

Media Services

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

Total revenues within this segment were £47.2m for the year (15 month period ended 31 March 2012: £61.6m), including £0.5m of intersegment revenue (15 month period ended 31 March 2012: £nil).

Film revenues for the period were £35.2m (15 month period ended 31 March 2012: £43.4m), reflecting high levels of utilisation due to the Company's ongoing success in winning business in a buoyant but highly competitive international market. Included in total film revenues are international revenues for the year of £1.0m (15 month period ended 31 March 2012: £1.2m). These revenues were earned from providing international sales, marketing and studio development services in Canada, the Dominican Republic and Malaysia.

Television revenues for the year were £5.2m (15 month period ended 31 March 2012: £10.2m), principally reflecting tough ongoing market conditions, a high level of facility utilisation by film customers, which has reduced the availability for television production use, and a period of facility downtime associated with the TV refurbishment project.

Media Hub revenues, inclusive of service, utility and facility charges for the year were £6.3m (15 month period ended 31 March 2012: £8.0m). This includes the Group's 50% interest in revenues from the Shepperton Studios Property Partnership of £0.7m (15 month period ended 31 March 2012: £0.8m).

Media Investment

The Media Investment segment generates revenue from the provision of content investment and production services, principally to the film industry. In the prior period, revenue from these activities was included in the Media Services film sector.

Total revenues within this segment were £8.9m for the year (15 month period ended 31 March 2012: £1.4m). The increase in revenue from this segment is due to additional Pinewood Productions (formerly known as Pinewood Films) investments made during the year and the commencement of the Group's management of the IOMT's Media Development Fund from 25 October 2012. 

Profit performance and earnings per share 

Gross profit for the year was £17.8m (15 month period ended 31 March 2012: £24.9m). Of this total, the Media Services segment contributed gross profit of £19.2m and gross margin of 41% (15 month period ended 31 March 2012: gross profit of £25.2m, margin 41%).

Operating profit for the year was £5.4m (15 month period ended 31 March 2012: £2.7m).

Operating profit from Media Services activities for the year was £10.5m (15 month period ended 31 March 2012: £13.9m) reflecting the production mix with reduced operating costs. Operating profit margin before exceptional items for Media Services (excluding intersegment profit) for the year was 22% (15 month period ended 31 March 2012: 23%).

Operating loss from Media Investment in respect of Film Production Companies ("FPC") activities for the year was £1.5m (15 month period ended 31 March 2012: £0.3m) reflecting the accounting treatment of the Group's FPC's offset by the UK film tax relief available to FPC's for qualifying film production expenditure on British qualifying films.

Operating loss from Media Investment activities excluding Film Production Companies for the year was £0.6m (15 month period ended 31 March 2012: £0.5m loss), principally reflecting the Group's accounting policy for film investments.

Net exceptional items for the year were £3.0m (15 month period ended 31 March 2012: £10.5m) as detailed below.

Group reorganisation

The Group incurred exceptional reorganisation costs of £0.2m in the year (15 month period ended 31 March 2012: £0.3m) in relation to the restructuring of certain business areas.

AIM listing

As a result of the admission of the Company's ordinary shares to trading on AIM, the Group incurred £0.3m of non-recurring professional advisor fees during the year (15 month period ended 31 March 2012: £nil).

Isle of Man Media Development Fund

The Group incurred costs of £0.4m in the year (15 month period ended 31 March 2012: £nil) mainly in relation to professional fees as a result of signing an agreement with the Isle of Man Treasury ("IOMT") to source and advise on film and high end television investment opportunities for the £25 million fund established by the IOMT and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT.

Teddington exit

The Group has announced plans to cease activity at the Teddington Studio site during 2013 and as a result has established an onerous lease provision for £1.5m (15 month period ended 31 March 2012: £nil). Also included are accelerated depreciation costs of £0.6m (15 month period ended 31 March 2012: £nil) arising from the revision of the expected useful lives of plant and equipment in use at the site.

Project Pinewood

In the 15 month period ended 31 March 2012, the Group incurred exceptional costs of £7.1m in relation to Project Pinewood costs following the Secretary of State's decision on 20 January 2012 to refuse planning permission for Project Pinewood. No such Project Pinewood costs were incurred in the year ended 31 March 2013. Costs relating to PSDF have been capitalised within 'Property, plant and equipment'.

Exceptional income for the year was £nil (15 month period ended 31 March 2012: £0.5m of VAT refunds).

EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation) for the year was £13.2m (15 month period ended 31 March 2012: £17.9m).

Profit before tax, after exceptional items, for the year was £1.3m (15 month period ended 31 March 2012: £1.9m loss).

Basic earnings per share for the year were 3.6p (15 month period ended 31 March 2012: 6.3p loss). Basic earnings per share after adjusting for exceptional items for the year were 10.1p (15 month period ended 31 March 2012: 14.6p). See Note 9 for further details.

The weighted average number of shares in issue at 31 March 2013 was 48.7m (31 March 2012: 46.9m). At 31 March 2013, there are no shares potentially issuable as a result of employee share schemes and therefore the weighted average diluted number of shares was also 48.7m (31 March 2012: 46.9m).

AIM listing & share placing

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

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

Return on capital employed

The Group measures return on capital employed by reference to operating profit from Media Services before exceptional items, as a percentage of average capital employed, being total equity plus interest bearing loans and borrowings, which for the year was 8.5% (15 month period ended 31 March 2012: 11.5%).

Dividend

The Board has declared a final dividend of 1.5p per share (15 month period ended 31 March 2012: nil). The dividend is to be paid on 7 October 2013 to shareholders on the register at 6 September 2013 (ex-dividend date of 4 September 2013).

The Board is committed to paying dividends in line with its dividend policy of not less than three times cover. 

Cash flow and net debt

The Company generated operating cash flow before changes in working capital for the year of £12.3m (15 month period ended 31 March 2012: £16.2m). After adjusting for movements in working capital, cash generated from operations for the year was £13.5m (15 month period ended 31 March 2012: £16.1m), from which finance costs of £3.5m (15 month period ended 31 March 2012: £4.1m) were paid and a net corporation tax refund of £0.9m (15 month period ended 31 March 2012: £3.0m paid) was received.

Cash outflow on capital expenditure during the year was £9.6m (15 month period ended 31 March 2012: £16.2m). The main areas of expenditure during the year were on the South Dock Stage redevelopment, £2.2m, TV studio upgrade, £1.8m, and Pinewood Studios Development Framework, £1.8m.

Net debt at 31 March 2013 was £44.7m (31 March 2012: £50.4m) which included £12.0m (31 March 2012: £12.0m) relating to the Company's 50% interest in the non-recourse Aviva loan to Shepperton Studios Property Partnership ("SSPP"). The decrease in net debt over the year is principally driven by the capital injection of £5.4m from the new share issuance and £1.6m of cash being held by the FPC's for the sole and restricted purpose of completing the Media Investment productions of Last Passenger (Pinewood Films/Future Films/BFI/Pathe Pictures), Belle (Pinewood Films/DJ Films/BFI/CinemaNX/Bankside), Camera Trap (Pinewood Productions/Pinewood Pictures/GasWorks Media) and The Christmas Candle (Pinewood Pictures/Christmas Candle LLC).

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

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

In addition to the £55m banking facilities, there are non-recourse facilities provided to SSPP by the Company's joint venture partner, Aviva, which total £40m, of which £24m was drawn at 31 March 2013 (31 March 2012: £24m). This loan, which is 50% consolidated at £12m (31 March 2012: £12m) is included in the Company's statement of financial position. These facilities, which are available until 2026, are covenant free with no scheduled repayments.

Investment property

Investment property is recognised in accordance with International Accounting Standard 40 Investment Property ("IAS 40") as a category within assets in the Company's statement of financial position. At 31 March 2013, investment property was recorded at depreciated cost of £6.1m (31 March 2012: £6.2m). This compares to the Directors' assessment of the fair value of £7.3m (31 March 2012: £7.3m). Further information on the basis for the Directors' fair value assessment can be found in Note 11.

Capital commitments

The Company had total capital commitments of £7.8m at 31 March 2013 (31 March 2012: £2.5m) in relation to three large scale redevelopment and construction projects in progress at Pinewood Studios.

Financial gearing

At 31 March 2012, net debt including the Group's share of the SSPP non-recourse drawn loan was £44.7m (31 March 2012: £50.4m). Financial gearing at 31 March 2013 excluding fair value and loan issue costs was 56.3% (31 March 2012: 68.3%).

Finance costs and hedging

Net finance costs for the year were £4.0m (15 month period ended 31 March 2012: £4.6m) which includes £0.4m of exceptional finance costs and £0.4m of swap termination costs as noted below. The Company has at its disposal undrawn facilities for which it pays non-utilisation fees as a percentage of the margin. Net finance costs were covered 2.6 times by operating profit before exceptional items for the year (15 month period ended 31 March 2012: 2.9 times). The Company continues to use interest rate derivatives to manage interest rate exposure.

At 31 March 2013, £22.5m (31 March 2012: £22.5m) of the Company's facilities were under interest rate swaps and £2.6m (31 March 2012: £1.1m) under a fixed interest rate asset financing facility.

Exceptional finance and swap termination costs

The Company incurred £0.4m of exceptional finance costs and £0.4m of swap termination costs in the year (15 month period ended 31 March 2012: £nil) in relation to the refinancing of its banking facilities. These costs are included within finance costs in the Group income statement.

Taxation

The total corporation tax credit for the year, based on profit before tax of £1.3m, was £0.4m (15 month period ended 31 March 2012: £1.1m charge).

The corporation tax credit for the year includes £1.5m of UK film tax relief for film production companies (15 month period ended 31 March 2012: £0.3m) which reflects the accounting treatment of the Group's FPCs and offsets the operating loss from Media Investment in respect of Film Production Companies.

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 26% (15 month period ended 31 March 2012: 23%).

Going concern

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

The Business review contains forward-looking statements that are made by the Directors in good faith. This information is based on the view of the Board of Directors at the date of approval of this Annual Report and based on knowledge and information at that time together with what are considered to be reasonable judgements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors outside of the Group's control which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including factors outside of the Group's control. Any forward-looking statements speak only as of the date that they are made, and the Group gives no undertaking to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based.

Ivan Dunleavy

Chief Executive

26 June 2013

Key business risks

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

Group income statement for the year ended 31 March 2013 and 15 month period ended 31 March 2012

Group statement of other comprehensive income for the year ended 31 March 2013 and 15 month period ended 31 March 2012

Group statement of financial position at 31 March 2013 and 31 March 2012

The financial statements of Pinewood Shepperton plc, Company number: 03889552, were approved and authorised for issue by the Board of Directors on 26 June 2013. They were signed on its behalf by:

Ivan Dunleavy

Chief Executive

Group statement of cash flows for the year ended 31 March 2013 and 15 month period ended 31 March 2012

Included within the overdraft balance are cash and cash equivalents of £1,634,000 (15 month period ended 31 March 2012: £161,000) which is unavailable for general use. Please see Note 21 of the Annual Report.

Group reconciliation of movement in net debt for the year ended 31 March 2013 and 15 month period ended 31 March 2012

Group statement of changes in equity

From 1 April 2012 to 31 March 2013

From 1 January 2011 to 31 March 2012

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 year ended 31 March 2013 or period ended 31 March 2012, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 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.

Extracts of notes to the consolidated financial statements for the year ended 31 March 2013

1. Basis of preparation and statement of compliance

The statutory accounts have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation and with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS. The Group has applied all accounting standards and interpretations issued by the International Accounting Standards Board and International Financial Reporting Interpretations Committee as endorsed by the EU relevant to its operations and effective for accounting periods beginning on 1 April 2012.

These financial statements are presented in Pounds Sterling, and rounded to the nearest thousand pounds (£000) except when otherwise stated, because that is the currency of the primary economic environment in which the Company operates.

Subject to changes of accounting policy noted below, the accounts are prepared on the basis of the accounting policies as set out in the previous annual financial statements.

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, show that the Group should be able to operate within the level of its current facilities. The Directors therefore consider that the Group has adequate resources to continue in operational existence for the foreseeable future and as such it is appropriate to adopt the going concern basis in preparing these financial statements.

The Group's assessment of going concern is explained further in the Directors' report within the Annual Report and further information on the Group's borrowings is given in Note 12.

Basis of consolidation

The Group consolidated financial statements comprise the financial statements of Pinewood Shepperton plc and its subsidiaries and joint ventures as at 31 March 2013 and 31 March 2012. All intercompany transactions, balances, income and expenses are eliminated in full on consolidation. All subsidiaries are consolidated for the financial year ending 31 March 2013 regardless of the individual entities statutory reporting date.

Subsidiaries and joint ventures 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 or joint venture, the consolidated financial statements include the results for the part of the reporting year during which Pinewood Shepperton 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 disclosures required under IFRS 8 "Operating segments" ("IFRS 8") following the Group's amendment to its operational financial reporting structure (see Note 3 "Segment information and revenue analysis") and the newly applicable accounting standard detailed below:

IFRS 7 Financial instruments: Disclosures on transfers of assets (Amendment)

The IASB has issued an amendment to IFRS 7 Financial instruments: Disclosures, which increases the required disclosures in respect of risk exposures arising from transferred financial assets. The adoption of the amendment did not have any impact on the financial position or performance of the Group.

The following are not effective at the date of these accounts but we expect them to have a material impact once they have been adopted:

In May 2011, a package of five Standards on consolidation, joint arrangements, associates and disclosures was issued, including IFRS 10 Consolidated financial statements, IFRS 11 Joint arrangements, IFRS 12 Disclosures of interests in other entities, IAS 27 Separate financial statements (as revised in 2011) and IAS 28Investments in Associates and Joint Ventures (as revised in 2011). The standards and amendments are effective for annual periods beginning on or after 1 January 2014 for companies preparing financial statements under IFRS as adopted by the EU, with earlier application permitted provided all these standards are applied at the same time.

The key requirements of these five Standards are described below:

IFRS 10 Consolidated financial statements

IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements and builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. In addition, IFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor's return.

IFRS 11 Joint arrangements

IFRS 11 replaces IAS 31 Interests in Joint Ventures and provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures will no longer be permitted.

IFRS 12 Disclosures of interests in other entities

IFRS 12 includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off-balance-sheet vehicles.

Amendments to IFRS 10, 11 and 12 on transition guidance

These amendments provide additional transition relief relating to the first time application of IFRSs 10, 11 and 12, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before IFRS 12 is first applied.

IAS 27 (revised 2011) Separate financial statements

As a consequence of the new IFRS 10, IAS 27 has been revised and now includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10.

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)

As a consequence of the new IFRS 11 and IFRS 12, IAS 28 has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates.

The Group anticipates that the application of these five standards will have a significant impact on amounts reported in the consolidated financial statements. The application of IFRS 11 in particular is expected to be material as it will change the accounting of the Group's three joint ventures (see Note 28 of the Annual Report) which are currently accounted for using the proportional consolidation method. Under IFRS 11, these will be accounted for under the equity method, resulting in the aggregation of the Group's proportionate share of the joint ventures net assets and items of profit and loss and other comprehensive income into a single line item which will be presented in the consolidated statement of financial position and income statement as 'investment in joint ventures' and 'share of profits of joint ventures' respectively.

The following are not effective at the date of these accounts and we do not expect them to have a material impact once they have been adopted:

IAS 1 Financial Statement Presentation - Presentation of Items of Other Comprehensive Income

The amendments to IAS 1 change the grouping of items presented in OCI and introduce new terminology for the statement of comprehensive income and income statement. Items that could be reclassified (or "recycled") to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified. The amendment affects presentation only and there will be no impact on the Group's financial position or performance. The amendment becomes effective for annual periods beginning on or after 1 July 2012 for companies preparing financial statements under IFRS as adopted by the EU.

IFRS 9 Financial Instruments: Classification and Measurement

IFRS 9 as issued reflects the first phase of the IASB's work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard is effective for annual periods beginning on or after 1 January 2015 for companies preparing financial statements under IFRS as adopted by the EU.

In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of the Group's financial assets, but will potentially have no impact on classification and measurements of financial liabilities. The Group will quantify the effect in conjunction with the other phases, when issued, to present a comprehensive picture.

IFRS 13 Fair Value Measurement

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The Group anticipates that the application of the new standard may affect certain amounts reported in the financial statements and result in more extensive disclosures. This standard becomes effective for annual periods beginning on or after 1 January 2013 for preparing financial statements under IFRS as adopted by the EU.

Amendments to IFRSs Annual improvements to IFRS 2009-2011

These annual improvements, address six issues in the 2009-2011 reporting cycle. It includes changes to:

·; IFRS 1, First time adoption

·; IAS 1, Financial statement presentation

·; IAS 16, Property plant and equipment

·; IAS 32, Financial instruments; Presentation

·; IAS 34, Interim financial reporting

These amendments become effective for annual periods beginning on or after 1 January 2013 for companies preparing financial statements under IFRS as adopted by the EU.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration receivable, net of discounts, rebates, VAT and other sales taxes or duty. The Group has assessed its revenue arrangements and has concluded that it is acting as a principal in all of its revenue arrangements. Where a contract spans an accounting cut off date, the value of the revenue recognised is the time proportion of the total value of the contract completed by the cut off date. The following specific recognition criteria apply:

Media services:

·; Film customers utilise services for a period of time. Film revenues are also derived from international agreements to provide sales and marketing services. Revenue is recognised as the Group earns the right to consideration for the service provided and this is time apportioned and earned as time elapses.

·; Television revenue is derived from the provision of services and is recognised on a time apportioned basis in relation to the television production process.

·; Media Hub revenue, which includes revenue from investment property, is derived from customers contracting to use the Group's facilities for a period of time. Revenue is recognised on a straight line basis over the term of the agreement.

·; Royalty revenue is recognised on an accruals basis in accordance with the relevant contracted agreement. Revenue is recognised as the Group earns the right to consideration for the royalty and this is time apportioned and earned as time elapses.

Media investment:

·; External investment management revenue is derived from the provision of services on a per film investment basis, with revenue from an annual management fee recognised on a straight line basis over the course of the year.

·; Film Production Companies revenue relates to the funding provided from the various financiers (excluding loans against tax credit, which are recognised as a liability on the balance sheet). Revenue recognised is the proportion of completion of the relevant project.

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 reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. Operating segments are aggregated where there is a high degree of consistency across these factors, and the segments have similar economic characteristics.

During the year ended 31 March 2013, the Group has amended its operational reporting structure to enable the chief operating decision maker to improve its management of several new activities undertaken since the initial adoption of IFRS 8 Operating Segments ("IFRS 8"). As a result of this reporting restructure, the Group has determined it now has two reportable segments, Media Services, which provides studio and related services to the film, television and wider creative industries, and Media Investment, which provides content investment and production services principally to the film industry. Following this change to the composition of reportable segments, the prior period figures shown below have been restated as required by IFRS 8.

The accounting policies of all operating segments are the same as those described in Note 2, 'Accounting Policies' within the Annual Report.

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 year ended 31 March 2013 and the 15 month period ended 31 March 2012 (restated) is presented below:

The Group evaluates the performance of reportable segments based on a measure of profit before tax.

Geographical information

All revenues continue to arise primarily in the United Kingdom, being the Group's country of domicile, except for £1.0m (15 month period ended 31 March 2012: £1.2m) of revenue generated from the Group's overseas activities.

Information about major customers

Revenue from one Media Services customer, operating through several separate subsidiaries, of £15.6m (15 month period ended 31 March 2012: two customers £8.8m and £7.4m) was recognised in the year.

4. Interests in joint ventures

(a) The Group has a 50% interest in Shepperton Studios Property Partnership, an entity controlled jointly with a third party, Aviva Group, which holds a 995 year lease on the Shepperton Studios property. The Group's share of the joint venture's assets, liabilities and results, which are proportionately consolidated in the Group financial statements, are as follows:

The Group's share of the capital commitments in respect of property, plant and equipment was £nil (15 month period ended 31 March 2012: £nil).

(b) The Group also has a 50% interest in Pinewood Studio Berlin Film Services GmbH in Germany. The Group's share of this joint venture's assets, liabilities and results are proportionately consolidated in the Group financial statements as follows:

The Group's share of the capital commitments in respect of property, plant and equipment was £nil (15 month period ended 31 March 2012: £nil).

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

5. Exceptional income

Items that are material either because of their size or their nature, or that are non-recurring are considered as exceptional items. Exceptional income was £nil for the year (15 month period ended 31 March 2012: £541,000). Exceptional income in the prior year consisted of:

VAT claim

The Group successfully agreed VAT refunds for the 15 month period ended 31 March 2012 of £541,000 relating to prior periods. This benefit was treated in the income statement as exceptional. No such refunds were received in the year to 31 March 2013.

6. Exceptional administrative expenses

Exceptional administrative expenses for the year were £2,997,000 (15 month period ended 31 March 2012: £11,025,000) and consist of:

Teddington exit

The Group has announced plans to cease activity at the Teddington Studio site during 2013 and as a result has established an onerous lease provision for £1,538,000 at 31 March 2013 (15 month period ended 31 March 2012: £nil). Also included are accelerated depreciation costs of £553,000 (15 month period ended 31 March 2012: £nil) arising from the revision of the expected useful lives of plant and equipment in use at the site and £28,000 of initial site exit expenses.

Isle of Man Media Development Fund

The Group incurred costs of £361,000 in the year (15 month period ended 31 March 2012: £nil) mainly in relation to professional fees as a result of signing an agreement with the Isle of Man Treasury ("IOMT") to source and advise on film investment opportunities for the £25 million fund established by the IOMT and to monitor and capitalise on UK distribution rights in films and television programmes funded by the IOMT.

AIM listing

As a result of the Company's ordinary shares admission to AIM, the Group incurred £337,000 of non-recurring professional advisor fees during the year (15 month period ended 31 March 2012: £nil).

Group reorganisation

The Group incurred exceptional reorganisation costs of £180,000 in the year (15 month period ended 31 March 2012: £287,000) in relation to the restructuring of certain business areas.

Project Pinewood

The Company wrote off £7,070,000 of Project Pinewood costs in the 15 month period ended 31 March 2012 following the Secretary of State's decision on 20 January 2012 to refuse planning permission for Project Pinewood, previously capitalised within 'Property, plant and equipment' in the Group statement of financial position. No such costs have been expensed in the year to 31 March 2013.

Acquisition by Peel

The Group incurred exceptional costs of £2,400,000 in the 15 month period ended 31 March 2012 relating to bid defence costs incurred in relation to the acquisition of a majority shareholding in the Company by Peel Acquisitions. No such costs have been incurred in the year to 31 March 2013.

Accelerated share option costs due to the acquisition by Peel Acquisitions

The Group also incurred share option costs of £1,268,000 in the 15 month period ended 31 March 2012 relating to accelerated share based charges as a result of the acquisition of a majority shareholding in the Company by Peel Acquisitions becoming unconditional on 21 June 2011. No such costs have been incurred in the year to 31 March 2013.

7. Finance costs

During the year, the Group has capitalised borrowing costs amounting to £81,000 (15 month period ended 31 March 2012: £nil) on qualifying assets. Borrowing costs were capitalised at a weighted average rate of general borrowing of 4.5%.

Exceptional finance costs

The Company incurred £411,000 of exceptional finance costs in the year (15 month period ended 31 March 2012: £nil) in relation to the refinancing of its banking facilities.

8. Taxation

(a) The major components of corporation tax expense are:

The comparative figures presented for the 15 month period ended 31 March 2012 are restated to separately identify the UK Film Tax Relief previously included within the UK corporation tax line item.

The Group statement of changes in equity is set out on page 20.

(b) Reconciliation of the total tax (credit)/charge

A reconciliation between the tax (credit)/charge and the product of accounting profit multiplied by the standard rate of corporation tax in the UK for the year ended 31 March 2013 and 15 month period ended 31 March 2012 is as follows:

(c) Deferred tax

Deferred tax relates to the following:

The deferred tax assets are shown net against the non-current deferred tax liability in the statement of financial position.

The Government has announced a reduction in the main rate of corporation tax to 21% from 1 April 2014, although this is not expected to be substantively enacted until July 2014. A further 1% reduction in the main rate of corporation tax was announced in the 2013 budget and is due to take effect from 1 April 2015.

Deferred tax has been calculated at 23%, which is the rate enacted by the Finance Act 2012. The future 2% main reduction is not expected to have a material impact on the Group financial statements.

 (d) Potential unrecognised deferred tax assets

A potential deferred tax asset of £122,000 (31 March 2012: £138,000) in respect of £4,000 (31 March 2012: £4,000) non-trading losses and £501,000 (31 March 2012: £501,000) capital losses in Pinewood-Shepperton Studios Limited and £27,000 (31 March 2012: £27,000) trading losses in Teddington Studios Limited has not been recognised as it is not anticipated that suitable gains will arise to enable the reversal of these temporary differences.

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.

Diluted 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 adjusted for the effects of the dilution of 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 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 the exceptional items.

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 for approval at the Annual General Meeting and, based on the shares in issue at the date the Board approved the Group financial statements, this would amount to a total dividend payment of £741,000 (15 month period ended 31 March 2012: £nil).

10. Property, plant and equipment

Assets under construction at 31 March 2013 relate to costs capitalised under the Pinewood Studios Development Framework. These are not depreciated.

During the year, the Group has capitalised borrowing costs amounting to £81,000 (15 month period ended 31 March 2012: £nil) on qualifying assets. Borrowing costs were capitalised at a weighted average rate of general borrowing of 4.5%.

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

An impairment of leasehold improvements and fixtures, fittings and equipment has been recognised during the year on obsolete assets at the Teddington site.

Fixtures, fittings and equipment include the following amounts where the Group is a lessee under non-cancellable finance lease agreements:

The lease terms are 3 to 5 years, and ownership of the assets lies within the Group. Lease rentals amounting to £205,000 (15 months ended 31 March 2012: £nil) relating to the lease of this equipment are included in the income statement.

Shepperton Studios Property Partnership's ("SSPP") long leasehold interest in the Shepperton Studios site was valued at £39,520,000 by an independent firm of Chartered Surveyors at 31 March 2013 (31 March 2012: £37,065,000). The Group carries its 50% interest in the property, plant and equipment of SSPP at £19,205,000 (31 March 2012: £19,805,000), being depreciated cost.

11. Investment property

No independent valuation has been undertaken at the year end. A Directors' valuation was carried out in accordance with the 'Red Book' to determine the fair value of the investment property. A yield based valuation has been used which provided a fair value of £7,300,000 at 31 March 2013 using a 7.50% yield on annual rental income of £562,000 and allowing for purchasers costs of 5.76%. The previous valuation was performed at 31 December 2011 and also used the yield based valuation method which provided a fair value of £7,300,000, assuming a 7.25% yield and allowing for purchaser's costs of 5.76%.

12. Interest-bearing loans and borrowings

Banking facilities

On 28 May 2012, the Company arranged replacement banking facilities of up to £55m which comprise a £50m revolving facility, of which £15m is a term facility, and a £5m overdraft facility subject to annual review.

These facilities are secured on certain of the principal assets of the Group.

The term facility contains scheduled repayments of £1.5m on 30 June 2015 and 30 June 2016 and matures in November 2016. The revolving credit facility has no scheduled repayments and matures in November 2016.

The £5m overdraft facility is reviewed annually.

The revolving facility has a range of covenants and events of default together with variable margins between 435 and 285 basis points over LIBOR.

The banking facilities become repayable on demand following a change of control in the Group if the Group and the syndicate of banks' agent are unable to agree alternative terms within thirty days of the Group's notification of a change of control.

Covenants

The banking agreements contain a range of covenants appropriate for the revolving facility and overdraft facility. The Group was covenant compliant at 31 March 2013.

Cash flow hedge

At 31 March 2013, the Group held interest rate swaps designated as hedges against drawn debt obligations amounting to £22,500,000 (31 March 2012: £22,500,000). Further information can be found in Note 29 of the Annual Report.

Asset financing facility

The asset financing facility comprises of both a sterling chattel mortgage facility and a finance lease facility which are over a fixed term with fixed monthly payments and are secured over identifiable assets of an equal value. These assets are classified as 'Fixtures, fittings and equipment' within 'Property, plant and equipment' in the statement of financial position.

Share of joint venture loan

This relates to the Group's 50% interest, £12,002,000 (31 March 2012: £12,002,000) of the joint venture's £24,004,000 investor and development loan (31 March 2012: £24,004,000). These loans which have no financial covenants attached to them are secured by a fixed charge on the assets of Shepperton Studios Property Partnership, are non-recourse to the Group and are repayable in full on 30 September 2026. Interest on the loans is at base rate plus 2% with an interest rate floor of 6.5%. The interest rate floor is an embedded derivative in the loan agreement; however the derivative has not been separated from the loan agreement as it satisfies the criteria for non-separation in IAS 39.

Borrowing facilities

The available but undrawn committed facilities are as follows: