Pinewood Shepperton's profits plunge due to tax status uncertainty |
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Published
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Wed, 29 Mar 2006 08:15
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LONDON: Film production company Pinewood Shepperton Plc., said its profits before tax for 2005 plunged to 571,000 pounds from 6.4 million pounds in 2004 and blamed the disappointing results on the uncertainty caused by the government's decision to change the taxation methods for film makers.
The company's turnover for the year fell to 33.4 million pounds from 38.7 million pounds. The company's studios and other facilities are being made use by the makers of the latest James Bond film Casino Royale.
It said the new tax reliefs announced by the government in the latest budget should help it stage a recovery.
Chairman of the company Michael Grade said trading conditions, particularly for the first half of 2005, are challenging.
The government had been providing certain tax reliefs to film producers by way of incentives to make the movies in the country, but last year it said it is planning to change the system as it found that the tax breaks were being abused by some unscrupulous elements. As the announcement led to a period of uncertainty, many producers decided to wait and watch.
However, the budget last week suggested a simpler system whereby films with budgets of less than 20 million pounds will receive a 20 per cent tax credit, while films costing more than 20 million pounds will receive 16 per cent credit. The company believes the new system has given clarity.
The company had bought over Teddington Studios last year and it is now eyeing for more acquisitions. It is also planning to almost double the size of its facilities by expanding the sites.
Pinewood Shepperton shares were up 2.25 pence at 223 pence, valuing the company at 103 million pounds.
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