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Pinewood profits reel; turnaround seen

2006 prospects are rosy as tax incentives kick in

Profits at the U.K.’s Pinewood Shepperton, Europe’s largest studio group, slumped 91% from £4.6 million ($8 million) in 2004 to just $683,000 last year as uncertainties over tax incentives hit U.K.-based film production.

Revenues slipped 13% to $58.3 million from $67.6 million in 2004.

But Pinewood toppers reported Tuesday that an upswing had recently begun, and they are hoping the transition to the new film tax regulations will mean a comeback this year.

“Trading conditions, particularly for the first half of 2005, were challenging,” said Pinewood Shepperton chairman Michael Grade in a statement.

Pinewood’s revenues from television helped steady the ship, rising 32% to $15.5 million from $10.4 million in 2004. April’s acquisition of Teddington Studios contributed to the rise.

Grade stressed the studio’s ability to bounce back, predicting that revenues for the first half of 2006 will exceed the year-earlier period, buoyed by the “greater clarity and certainty” regarding U.K. film policy in the government’s March 22 budget.

Pinewood’s feature film biz did pick up in the second half of 2005 thanks to pics including “The Da Vinci Code,” “Children of Men” and “Stormbreaker.” Film revenues fell just 6% in the second half, after first-half film revs fell by 50%.

“The Magic Flute,” “Stardust” and “Casino Royale” are currently using the studios.

Overall film production spend in the U.K. for 2005 was down 45% to $976 million from $1.42 billion a year earlier.