media services
Transcription
media services
Pinewood Group plc A leading provider of studio and related services to the global screen based industries Interim Results 1 December 2015 1 DISCLAIMER This presentation has been prepared by Pinewood Group plc ("Company") and relates to the Company’s financial result for the period ended 30 September 2015. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase, any Shares or any other securities, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with, any investment decision. Further, this presentation does not constitute a recommendation regarding any decision to sell or purchase securities in the Company. No representation or warranty, expressed or implied, is made or given as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of the information contained in this presentation has been independently verified and no responsibility or liability is assumed for any such information or opinions or for any errors, omissions or misstatements or otherwise for any other communications or otherwise contained in or referred to in this presentation, or for any indirect or consequential loss or damage suffered by any person as a result of relying on a statement in, or omission from, this presentation, and any such liabilities are expressly disclaimed. In particular, but without limitation, no representations or warranties are given as to the prospects of the Company and nothing in this presentation should be relied upon as a promise or representation as to the future. This presentation is not being issued, and is not for distribution in, the United States of America or in any jurisdiction where it is unlawful or where such distribution would breach any regulatory requirements. This presentation contains written and oral ‘forward-looking statements’, which include all statements that do not relate solely to historical or current facts. These forward-looking statements speak only as at the date of this presentation. All forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside of the Company’s control that could cause actual results to differ materially from such statement. The Company undertakes no obligation publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Recipients should be aware there is no guarantee that there will be a liquid market for the Company's shares in the future. 2 INTERIM RESULTS 2015-16 3 1. Highlights and KPIs 2. Financial Review 3. Operating Review and Strategic Update 4. Outlook Ivan Dunleavy Chief Executive Chris Naisby Finance Director Highlights and KPIs 4 HIGHLIGHTS 5 • Media Services revenue up 20% to £32.5m • Media Services operating profit up 37% to £8.3m • Consolidated profit after tax up 13% to £4.3m • Adjusted eps up 17% to 9.0p • Phase one PSDF to be completed by June 2016, within budget • Full ownership of Shepperton Studios with review of existing masterplan underway • Pinewood Atlanta Studios Phase 2 development completed KPIs H1 2015-16 H1 2014-15 £32.5m £27.0m £8.3m £6.1m £12.6m £9.2m 10.2% 9.3% Stage occupancy 87% 86% Media Hub occupancy (as a % of net lettable area) 95% 97% 3 7 (£0.1m) (£0.3m) Film finance funding invested by the Group £1.0m £1.0m Film finance funding from third party funds £3.4m £6.4m £4.3m £3.8m 9.0p 7.7p £6.7m £11.5m £55.8m £31.8m Media Services Revenue (including inter-segment) Operating profit before exceptional items EBITDA Return on capital employed Media Investment Number of active Film Production Companies during the year Loss after tax Group performance Profit after tax Normalised earnings per share Unrestricted cash generated from operations Net debt 6 Financial Review 7 REVENUE SPLIT 6 months ended 30 September 2015 Revenue Split by Segment 16% Media Investment 84% Media Services Media Services Revenue Split External investment advisory 15% Television Media Hub 12% 6% International 4% Digital Content Services 15% 8 Media Investment Revenue Split External Film 63% Film Production Companies 85% INCOME STATEMENT £000’s • • • Total revenue -1% with reduced FPC activity in Media Investment during the period Media Services operating profit +37% year on year Finance costs on increased debt and inclusive of £1.0m fair value movement • Underlying earnings +35% year on year • Underlying EPS +17% including the impact of new shares issued 9 H1 2015-16 H1 2014-15 % Change 38,246 38,506 (1%) 32,495 27,001 20% 5,980 12,119 (51%) Operating Profit: 7,034 2,452 187% Media Services 8,324 6,094 37% Media Investment (1,290) (3,642) 65% Finance Costs (3,162) (1,204) (163%) PAT 4,300 3,798 13% Underlying earnings 5,126 3,798 35% 9.0p 7.7p 17% Revenue: Media Services Media Investment Underlying EPS (p) INCOME STATEMENT £000’s • Media services margins include the impact of the acquisition of SSPP in December 2014 • Media Services headline ROCE +10% • Excluding the PSDF asset in the course on construction Media Services ROCE is 11.7% • Underlying earnings +35%. With Media Investment loss reduced to £67,000 10 H1 2015-16 H1 2014-15 % Change 12,635 9,169 38% Margin (%) 39.2% 34.8% Media Services EBIT 8,324 6,094 Margin (%) 25.8% 23.1% 10.2% 9.3% 10% Underlying earnings 5,126 3,798 35% Media Services earnings 5,193 4,104 27% (67) (306) 78% Media Services EBITDA Media Services ROCE Media Investment earnings 37% CASH FLOW 6 mths to 6 mths to 12 mths to 30-Sept 30-Sept 31-Mar • Operating cash conversion presented excludes FPC operating loss and restricted cash £000’s 2015 2014 2015 Unrestricted operating cash flow 6,724 11,469 20,456 Operating cash conversion (%) 83% 218% 203% (2,339) (1,070) (2,463) • Cash conversion includes an anticipated working capital outflow of £5.7m, in the period, largely due to the timing of film starts and VAT payments Tax (paid)/received (428) (1,170) (1,012) Free unrestricted cash flow 3,957 9,229 16,981 (17,493) (3,615) (45,586) 28,779 - - (23,983) (827) 35,063 1,234 2,921 (876) Net (decrease)/increase in cash (7,506) 7,708 5,582 Total (overdraft)/cash (1,149) 8,483 6,357 Unrestricted cash (2,933) 4,136 5,807 1,784 4,347 550 (55,830) (31,760) (71,918) - (12,004) - (55,830) (43,764) (71,918) • Investment activities spend includes PSDF spend of £13.9m and Atlanta investment of £1.6m Interest paid Investment activities Proceeds from share issue Financing activities Restricted cash movement Restricted cash Net debt per Financial Statements SSPP debt (IFRS 11 adj) Proforma net debt 11 BALANCE SHEET Total New Debt Facilities 30 30 31 Sept Sept March 2015 2014 2015 181.8 117.8 165.4 Investment property 5.7 5.9 5.8 Investment in Joint Ventures 6.2 9.1 4.0 Intangible & long term assets 5.9 6.2 6.1 Current assets 15.4 28.0 19.2 TOTAL ASSETS 215.0 167.0 200.5 Equity 123.0 87.6 91.5 £m Assets Property, plant and equipment Liabilities Loans and borrowings Derivative financial instr. Current liabilities Total liabilities TOTAL EQUITY & LIABILITIES NAV per share Gearing 12 54.7 40.2 78.3 1.2 0.2 0.3 36.1 39.0 92.0 79.4 30.4 215.0 167.0 200.5 214p 177p 185p 43.0% 36.9% 78.6% 109.0 Facilities £m RCF 35.0 Term loan 100.0 Core bank facility 135.0 Overdraft Asset financing Total 5.0 12.0 152.0 On 17 April 2015, the Group fully repaid and terminated its previous £85m banking facility and drew under the new £135m agreement as outlined above for the first time. Key covenants include: - Leverage - Interest cover - Loan to value Operational Review and Strategic Update 13 MEDIA SERVICES • Revenue £32.5m (6 months to Sept 2014: £27.0m) • Stage occupancy 87% (6 months to Sept 2014 : 86%) • Media Hub occupancy 95% (6 months to Sept 2014 : 97%) • Major productions hosted in the first half included: – • • • • • SPECTRE (Eon/MGM), Star Wars: Episode VII The Force Awakens (Lucasfilm), Beauty and the Beast (Disney) Pinewood entered in to profit sharing agreement with Jewson for an initial period of 5 years DCS work included Everest (Working Title) and Steve Jobs (Universal Pictures) TV studios hosted innovative and technically challenging shows, Dino Autopsy (Impossible Factual) and The Alternative Election (Zeppotron) Full ownership of Shepperton Studios and reviewing the masterplan Pinewood Studio Wales now home to 14 tenant companies Pinewood Studio Wales 14 SPECTRE © 2015 Metro-Goldwyn-Mayer Studios Inc., Danjaq, LLC and Columbia Pictures Industries, Inc. All rights reserved. Dino Autopsy © National Geographic © Shepperton Studios Limited Everest © Universal Pictures The Alternative Election Night © Zeppotron INTERNATIONAL • Revenue £1.4m (6 months ended 30 Sept 2014: £1.8m) – included in Film revenue • Pinewood Atlanta Studios phase two development completed in June 2015 – • Demand has been good with Marvel and Sony occupying facilities Company continued to provide advice on the design and construction of the Qingdao Oriental Movie Metropolis, a film facility comprising 45 stages for the Wanda Group – Construction on Phase One commenced in 2015 with the studio complex scheduled to open in 2017 Pinewood Toronto Studios 15 Pinewood Iskandar Malaysia Studios Pinewood Atlanta Studios Pinewood Dominican Republic Studios MEDIA INVESTMENT • Content Fund Management – Advise on the Media Investment Budget (£30m) for the Welsh Government • Agreement includes lease of Pinewood Studio Wales – Advise the Isle of Man Media Development Fund (£25m) – Investment advisory and other fees £0.9m (6 months ended 30 September 2014: £0.4m) • Content Investment – Low risk investment of £1.0m by Pinewood during the year (6 months ended 30 September 2014: £1.0m) • Their Finest Hour and a Half Kill Your Friends © Altitude Film Film Production Activity – Revenue £5.0m (6 months ended 30 September 2014: £11.6m) due to the timing of deal flow – Activity is earnings and cash neutral at the after tax level 16 Pressure © Pressure Films Limited THE PSDF Artist’s Impression of Fully Completed PSDF Existing Existing Pinewood Pinewood Studios Studios PSDF fully completed 17 THE PSDF - DETAILS 18 • The PSDF is a demand led expansion programme • Three phases of planned development adding a total of 1m sq ft of new facilities • PSDF Phase One: – Comprises five new large stages – The Design and Build contract for Phase One was signed on 19 May 2015 with Sir Robert McAlpine Limited – Development has commenced, with completion scheduled for H1 2016 – The cost of development will be funded by a combination of the new banking facilities agreed on 6 March 2015 and equity raised through the issuance of 8m new ordinary shares on 17 April 2015 Outlook 19 OUTLOOK • First six months of the year maintained the positive momentum reported in our full year results in June 2015. • Media Investment deal flow weighted to the balance of the year. • The construction of phase one of the Pinewood expansion is on schedule for completion in June 2016 and is within budget. • Encouraged by the visibility we have for the remainder of the financial year and into the first half of 2016/17 20 Appendix 21 OVERVIEW OF THE GROUP A leading provider of studio and related services to the global screen based industries • Eight decades of operational experience • Operational sites in five territories with: – – The National Lottery Live from TV Three 22 Pinewood SPECTRE © 2015Studios Metro-Goldwyn-May Studios Inc. Danjaq, LLC and Columbia Pictures Industries, Inc. All rights reserved. 68 stages worldwide; a unique combination of film facilities Five HD TV Studios • Over 2,000 films have used Pinewood’s facilities • Has hosted 59 blockbuster films with budgets > $100m in the last 7 years Pride and Prejudice and Zombies @ Universal Pictures Assassin’s Creed © Twentieth Century Fox Steve Jobs © Universal Pictures Alice in Wonderland: Through the Looking Glass © Disney Studios Star Wars: The Force Awakens © Lucasfilm LOCATIONS Pinewood Studios Pinewood Studio Wales Shepperton Studios Pinewood Productions Ireland Pinewood Studios Wales China Agreement Pinewood Toronto Studios Pinewood Atlanta Studios 23 Pinewood Dominican Republic Studios Pinewood Iskandar Malaysia Studios DRIVERS OF GROWTH Television Film • Growing global consumer demand, greater accessibility and quality of content is driving demand • Global box office for films = c.$36bn in 2014 – increase of 4% vs 2013 (1) − Projected to increase by 6.0% per annum 2015–2019 (1) Total film spend in the UK of c.£1,064m in Q1-3 2015 (c. £1,156m Q1-3 2014) (2) • UK inward investment spend of c.£909m in Q1-3 2015 (Q1-3 2014: c. £938m) (2) • • Global rise in TV viewing being driven by pay TV and trend towards highend productions to capture mass audiences • Greater accessibility • Spend on UK content rose by 9.4% to c. £6.46bn (3) • UK TV industry revenue generated c.£13.2bn (3) • UK HETV spend c. £564m in Q1-3 2015 (Q1-3 2014: c. £633m) (2) • UK HETV tax relief Chinese box office increased by 36% in 2014 to c.$4.3bn and is expected to increase by 15.5% from 2014-2019 to c$8.9bn (1) • 1: 2: 3: 4: 24 Source: PricewaterhouseCoopers Global Entertainment and Media Outlook 2015-2019 Source: Film, high-end television, animation programmes, and video games production in the UK – Q1-Q3 2015, BFI Research and Statistics Unit, 3 February 2015 Source: Ofcom Communications Market Report 2015 Source: Nesta - A Map of the UK Games Industry 2014 Games • High consumer demand for video games with cinematic quality content • Continued investment budget franchises • Number of UK games developers increased at an annual rate of 22% between 2011 and 2013 (4) • c. 1,900 games businesses in the UK contributing c.£1.7bn to the economy (4) • Global video games revenue will increase by 5.7% from 20142019 to c$93bn (4) • UK Video Games tax relief – UK spend of c. £109m between October 2014 and September 2015 in high