Pinewood dividend up in spite of US writers' strike

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The Independent Online

Pinewood Shepperton's annual revenues took a major hit from the strike by the US Writer's Guild, which forced the studios to postpone the prequel to the blockbuster film The Da Vinci Code.

Overall turnover for 2007 was £37.4m, 8.1 per cent down on the year before, and operating profit was £7.1m, a drop of 30 per cent, the company's annual results revealed yesterday. The film division showed revenues down £3m to £19.5m.

The postponement of Angels and Demons – the prequel to The Da Vinci Code was well-publicised – but the share price still dropped by 3 per cent yesterday.

"We did have a contract, and that was honoured, but we lost some of the additional spend when the film was postponed," Ivan Dunleavy, the company's chief executive, said.

"Film production involves assembling various pieces and that will have to start afresh and will take time."

The Writers' Guild delays come against a backdrop of wider issues in the movie production industry, caused by the weak dollar. The UK sector saw overall investment down 15 per cent in 2007 – 112 films, compared with135 the year before.

Pinewood had some major successes, including work on Sweeney Todd, The Bourne Ultimatum and The Golden Compass last year, and ongoing involvement with the next James Bond film, Quantum of Solace, which is due for release this year.

And despite earnings per share at 9.9p, compared with 10.3p the year before, the total dividend for the year was set at 3.3p, a 10 per cent rise. "The dividend is up, which is a measure of our confidence in the business going forward," Mr Dunleavy said.

The company is also trying to diversify. The television division saw revenues of £12.1m, up from £11.8m in 2006. And although Media Park income dropped from £6.3m to £5.8m, the scheme to establish the firm's studios as a creative industry hub took a boost with last December's agreement for a 42,000 square foot facility to be built for Technicolor at Pinewood Studios.

"We are looking at a very long-term stable revenues," Mr Dunleavy said.

The company is also pursuing ambitious plans, called Project Pinewood, to revamp 100 acres of adjacent green belt with residential facilities alongside permanent film and television locations. The planning application is expected to be submitted this year.

Analysts at Investec described the results as a "solid performance in a challenging year" and maintained a "hold" rating on the stock. The shares closed down 7.5p at 242.5p.

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