Incentive imbroglio unsettling film industry |
|
|
|
Published
:
Tue, 21 Jun 2005 14:05
|
LONDON: Well known film studios Pinewood Shepperton, the home for legendary Harry Potter, Batman and James Bond movies, lost 20 per cent of its value in a day after it gave a second profit warning in three months and its shares took a dip in the market Monday.
The company had said it may not meet the market forecasts either in the interim or in the full year results, mainly because of the uncertainty over tax incentives on investments in films. The government feels the incentives offered by the previous regime had been abused by some investors through "double-dipping" and has suggested a review. The Treasury has plans to introduce a new set of incentives but this may not happen in the immediate future because of the formalities involved.
Pinewood Shepperton's chief executive, Ivan Dunleavy, said a three-month industry consultation that had been due to start in June is not likely to begin before the end of July. "There will be some time needed at the end of the consultation for discussion, which means that the issue is with us for the remainder of this year."
| He said most of the film companies are holding off from converting provisional bookings because of the uncertainty. There are reports that production of future Harry Potter and James Bond films are being shifted to studios in Central Europe. For sure, Hollywood's Paramount Pictures had canceled the shoot of its blockbuster, The Watchmen, at the studios.
The company said it expected to report interim operating profit of about £2 million. It will not achieve full-year operating profit estimates of about £8.7 million. It would not also pay any interim dividend or even final dividend.
The announcement brought the company's shares down by 20 per cent well below the year-old listing price of 180p.
The strength of the pound against the dollar has also caused the pull-out of several film companies from Britain in favor of Central European countries.
Pinewood Shepperton had bought Teddington Studios for £2.7 million in April this year.
A Treasury spokesperson denied that there is any uncertainty over the future of the incentives. The Chancellor had said in the budget that the current reliefs would continue to be available until 31 March 2006 at least.
The issue is also having repercussions on the labor front. Labor unions are alleging that hundreds of film industry workers were being laid off because there was less work available.
|
|
|
|
|
|
Print this Story
