Pinewood Group, which runs Pinewood and Shepperton Studios — home to recent blockbusters including “No Time to Die,” “Black Widow” and “Cruella” — has posted a £102.9 million ($125 million) turnover for the financial year ending March 31, 2022.
That’s a £6 million increase on the previous year despite the fact that for much of 2021 the COVID-19 pandemic was still having an impact via social distancing, mandatory self-isolation and lockdowns. Despite this, the U.K. has experienced a production boom since shooting started back up in July 2020 following the implementation of COVID-19 protocols.
The 60-page financial report, filed at U.K. companies registrar Companies House earlier this week, states that “The Group has operated at full capacity throughout the year,” which ran from March 2021-2022.
In terms of profit, those revenues translated into £63.6 million gross profit — up on £3.1 million the previous year — and a net profit of £31.3 million, which is slightly down from £33.7 million the previous year. The report puts this down to the high level of production which resulted in a “reduced opportunity for generating resale income and an increased usage of ancillary studio services, which are principally sold at cost.”
The Group also paid back £0.5 million towards the Coronavirus Job Retention scheme, which they took part in during the throes of the pandemic and noted that “revenue from international agreements declined marginally compared with prior year.” This was due, the report states, to “the exit” of the Group’s sales and marketing agreement in October 2020 with Trilith Studios in Atlanta, Georgia (previously known as Pinewood Atlanta Studios).
However the report notes that agreements with studios in Toronto and the Dominican Republic are still generating income.
The directors have instructed that no dividends be paid this financial year.
Pinewood Group provides sound stages and “other production accommodation” such as offices and wardrobe facilities. It also offers post-production and other studio services as well as “international sales, marketing and customer support on behalf of third party studios,” according to the report.
In order to keep up with demand, the Group is embarking on ambitious developments at both Pinewood and Shepperton, which are set over a combined 502 acres of land. At Pinewood, which is located between London and Windsor, the Group is constructing another five sound stages, due to come online this summer, which have already been snapped up by Disney in a long-term lease. The group has also applied for planning permission to build a hub that includes production facilities, a skills and training accommodation and a visitor attraction.
Meanwhile at Shepperton, construction has commenced on an expansion that will double the size of the current production hub. The studio has already signed long-term contracts with both Netflix and Amazon to lease the space.
“This sees 100% of the Group’s production accommodation, existing and currently under construction, being let under long-term index-linked contracts,” the report states.
Pinewood Group’s report notes that in the last financial year, a whopping £84.1 million of the company’s turnover came from just two customers (who are not named), and in the previous year £80 million turnover came from just three customers (also not named).
The issue of long leases being snapped up by larger studios is a thorny one in the U.K., with smaller productions scrabbling to find space to shoot due to the boom in production.
However, from Pinewood’s point of view, the long leases are a crucial form of risk management. “We face competition from existing studios and new market entrants, both in the U.K. and internationally,” the report states under a heading titled “Principal Risks and Uncertainties.”
“With long-term contracts in place for 100% of the existing production accommodation at our U.K. sites, where the rent is payable in advance, the risk of low occupancy levels or downward pressure on our rates is substantially eliminated in the medium-term,” the report continues.
Other risks identified in the report include Brexit, the ongoing COVID-19 pandemic, a skilled labor shortage, which the Group acknowledges could be exacerbated by a “material increase in the amount of studio space in the south-east [of the U.K.],” and personal injury “as productions and construction teams use and move around our sites, given the nature of their operations and activities.”
In order to mitigate some of these risks, the Group is working with the BFI and U.K. government to help address the skills shortages and also has a “disaster recovery plan” in place in the event of a “major incident” such as a fire or explosion.
“A major incident, such as a fire or explosion, could put people and/or the site at risk, resulting in a loss of turnover and damage to the Group’s operations and reputation,” the report acknowledges, adding that the Group employs an in-house health, safety and fire team who “carry out regular risk assessments.”
In March, a set on Disney’s upcoming live-action “Snow White” set caught fire while in 2006 a fire broke out during a shoot for Bond film “Casino Royale.” There were no injuries reported in either incident.