Prime Focus Commercials Arm Enters Administration
LONDON -- Prime Focus London’s commercials division is poised to go into administration, according to a report by the UK’s Televisual.
In a stock exchange update on February 1, Prime Focus London’s board said it had requested that its subsidiary Prime Focus Broadcast and Commercials Limited (PFBC) be placed into administration. The company said the decision was taken “following an assessment of the current financial position which established that PFBC has insufficient funding to meet its debts as they fall due.”
Prime Focus said that its commercials operations in London “continue to suffer from low volumes and suppressed margins” and “continued to be a drag on performance.” Prime Focus added that its Broadcast business is performing well, showing revenue and EBITDA growth over the previous year. The Broadcast and Commercials divisions are housed together for financial reporting reasons, but the move will only affect Prime Focus’ commercials business.
Rowan Bray, managing director of Prime Focus Broadcast UK and Independent Film, said, “This does not affect broadcast, VFX or film.”
Bray said that the commercials market has been very tough for post production companies, blaming the recession and falling budgets. In August, Prime Focus cut a number of jobs in its commercials division against a tough trading background.
The commercials division currently employs around 60 staff. The PFBC subsidiary houses its commercials employees. Prime Focus said that “liabilities in respect of equipment and property leases are mainly held in the plc or its other subsidiaries.”
However, Bray said the broadcast division is performing strongly, citing projects such as Take Me Out, Great British Menu, Love Boat and An Island Parish.
Prime Focus has filed a “Notice of Intention to Appoint Administrators,” which provides a 10-day business moratorium from any legal action against the company. During this time, Prime Focus will carry out “an urgent assessment” to see whether the business and assets of PFBC can be sold.
Prime Focus’s stock exchange update added that the London operation continues to be dependent on Prime Focus Limited, its Indian majority shareholder, for the funding of its working capital requirements.