manshimajin

A santander 1 year term deposit wouldn't be available for an institutional investor and wouldn't have any capital gain. I was referring to investing £25,000. However turn up with £millions Slim and negotiate. I doubt that the bank will close its doors on you. This form of investment won't have any capital losses either (as with all investments - d.v.). I am not disagreeing with you that the Reserves have to be invested in a variety of investment options. But the returns to date are hardly enough to make enough for an Examiner article to trumpet "rewards" are they? Particularly when the MDF is down £21 million through investing in films that have not turned in profits and which according to the government accounts had returns that were overstated in the accounts. Certainly the MDF has not generated the capital gains you mention and our politicians have made very conflicting statements about the flow-on benefits. The basic point with this investment is that like it or not it was 'controversial' - probably due to the conflicting statements referred to above emanating from politicians over the previous 2 years or so and the fact that the OE report indicated the future of the on-Island film industry to be limited. In those circumstances some discussion in Tynwald of which way of using this money would have best benefitted the Island could have been useful. It would either have stopped most of the criticsm or come up with more attractive options for on-Island employment at a time when the economic outlook is less bright than it has been for years. The question was asked, but never responded to by the Government, as to whether the money being transferred to the UK could or should be invested to generate work in new initiatives on the Island and/or to be in a more prudent form of investment in volatile times. For example would the use of the money on the Island have generated more local jobs, VAT, tax and

Well that means along with Eddie he has been "rewarded" for his invetment - £50 interim dividend (a Santander 1 Year Term deposit would have given £330 for 6 months) and a theoretical maximum £400 increase in the value of his £27,500 share purchase based on todays bid price. Mind you that is significantly better than he achieved on the investment of the MDF!

Thanks for the link Slim - most helpful. So to summarise - on profits of £2 million they are paying total dividends of £250,000 of which the IOM Reserves will get a little less than £25,000.

I would agree that they are not as big a gamble as films but they are dependent on films being successful for continuity of cashflow so they share in the risk. Also, and I may have got this wrong, but isn't the person who oversaw the loss-making film investment through CinemaNX still investing the MDF monies?

Slim maybe I missed your data on actual dividends paid. What is the dividend per share? I have seen that you quoted profit (gross or net?) - which is not dividend. How much of the profit you quoted is being reinvested in the business and how much is being paid as dividends?

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I think Mr Bell, quoted by Asits, speaking in Tynwald makes the point about risk eloquently: Mr Bell seems to agree with what I said earlier on the thread - the film sector can be very successful or it can bomb. It would be a good description of betting at the Roulette Table too.

The problem is compounded if someone says 'it has lost £106 million', another says that some people have 'benefitted to the amount of £250 million', another says 'it is not technically taxpayers' money being invested', another says if people ask questions they are 'naysayers' and in IOMToday there is an article "CinemaNX films have yet to make us a profit" http://www.iomtoday.co.im/news/isle-of-man-news/cinemanx-films-have-yet-to-make-us-a-profit-1-5144389.

Back to basics...this is a typical Examiner/IOMToday non-article. The heading "Pinewood Deal Rewards" has no numeric facts from Eddie Teare to substantiate that claim. I suspect that he feels very much on the back foot and is trying to spin something out of nothing. The Examiner should have said to him that they are not going to publish froth. If he has the numbers then he needs to come out with them to make people trust his judgement. The history of this sector over the past few years has included Anne Craine saying that there has been a huge loss in film investment (I think she was saying about £106 million), Allan Bell saying it had contributed £75 million to the economy, Mr Christian saying it had contributed £250 million, the government accounts saying the MDF had lost £15 million in 3 years, Mr Teare saying it had lost £22 million and various articles about how much has been lost in promoting specific films. As Slim quite correctly said above it may not be the most critical investment being made through the Reserves. However it is one that has gained a lot of public attention and a degree of notoriety because even the government ministers don't seem to know if its made money or lost money - and not on a small scale either. It is therefore IMO no wonder that people who have a bit of interest in the way things happen here focus on the inconsistencies that have been floating around government circles. If Mr Teare has facts and figures he should come out with them in a clear and factual statement. Until such time as he does I suspect that vague statements of the "trust me it is generating rewards but I can't quantify them" sort on the IOMToday link just make things worse not better. Why does he want to communicate when he cannot quantify the "rewards"?

Yes, well that does depend on how you value things, and that's not exactly clear cut. Like I said, I see the current set up as being a way of getting clear of that old mess, was it a fund that expected a direct return on investment, was it a pot of development money that was supposed to stimulate an industry and not pay for itself directly? What was the full benefit? Well that ones hard to say because it's so difficult to quantify. Slim it lost value, if you take the time to look at the accounts, because the investment managers have continually over-estimated the value of the films they promoted which resulted in write-downs. I understand that at least some of the current managers are the same people who failed in the past. Their track record is not encouraging. Running down the value of a fund because of the value of the products it makes is not a sustainable strategy for groing that sector. That's not entirely true, you're ignoring the dividend for a start off. The investment into pinewood shares came out of the reserves which would be invested into other equities presumably, so the same's true of wherever the funds came from. And like I said, there's trades in the pinewood shares this month that shows they're worth a fair bit more than what the govenment paid them for. You were talking specifically about share price Slim so I was commenting on what you said. Until you realise the value by selling any increae in share value is clearly a paper profit. You can only be sure of securing that increase in value by selling. For example what are RBS shares worth now compared with their peak - you have to sell to get the price! How big is the Pinewood dividend since you say it should be included? Is the £2 million you quote gross profit or post tax profit or dividend? We would need to know how much profit is paid as dividends and how much is retained for the business before saying it is a good, bad or indifferent dividend. Says who? It made a £2 mil profit in the last six months, got significant assets and a nice full order book. Why do you consider it a high risk? Allan Bell for one. £2 million in 6 months is about 2% of the capital value of the business. Is it pre tax profit you are quoting or after tax? Slim as above how much of these profits have been paid as dividends into the Reserves? Anyway Slim a Very Happy New Year to you and yours.

The problem is that to date taking a combination of the Government Accounts and Eddie Teare's statments in Tynwald the managers of the MDF have lost at least 39% of its value - maybe more if only £25 million was left to be passed on to Pinewood. Eddie has not said what happened to the difference between that last number and the £33 million value he credited the MDF with in Tynwald. If the same people who achieved this continue with that track record the MDF will have minimal value in 2-3 years time. I think that this investment has attracted public comment because for the last two years more and more information has emerged about the IOMG investment in films and its 'benefit' to the economy. Unfortunately Craine, Bell and Christian all came up with significantly different numbers which inevitably creates suspicion that either they really do not know what is going on or someone is being economical with the truth. Pinewood is just the tail-end Charlie of a series of investments which came under the spotlight much, one suspects, to Bell's disgust. The other thing Slim is that whatever the paper price is of a share it's real value is the net cash generated when it is sold. A lot of people have kidded themselves they are wealthy based on paper profits. Woolley, you may be right - I thought I had read the description "high risk" from Bell on here referenced to MR. At the same time investment in a film studio is definitely at the "high risk" end of the scale.

Spermann I would not use the term fail - I would say, and Mr Bell himself has said exactly the same on Manx Radio, that the investment in Pinewood is a "high risk investment". If the CM thinks that I see no reason to doubt his word. In essence he is saying that it is a gamble - it has a higher propensity than other investments to come up with a super return or to bomb. The roulette wheel is a bit like that too. To be more specific: This is an investment of taxpayers' Reserves at a time when the Government are relying on the Reserves to shore-up the Government expense overrun. "High Risk" investments are not really suitable for Reserves investment under present circumstances. Over time the IOM investment in the Media Development Fund has lost, according to Government figures reported in the Government Accounts and Eddie Teare's update approximately 39% of their value. He has also failed so far to explain why he says the IOMG is investing the MDF through Pinewood and that it is valued at £25 million when his last statement on the value of the fund said it was worth £33 million. If it is only worth £25 million the MDF has more than halved in value under its investment managers' guidance. Having written to all MHKs and MLCs about the investment I was told by the ones who replied that no alternative use of the funds to stimulate local business and the local economy had been considered. The investment coincides with the massive studio investment by Warner Bros. down the road from Pinewood. It follows on rejection of a major development plan for Pinewood lands by the planning authorities. As others, and to extent myself, have pointed out to make actual cash on the investment requires the shares to be sold - the listing on AIM is not ideal for selling large quantities of shares. There has been no statement from the IOMG as to what happens if Pinewood needs to raise funds through a share listing that woud either dilute our holding or require additional capital from the Reserves. To date the dividends have been minimal. My overall concern with Pinewood is that it is Mr Bell's stated "high risk" investment made without consideration of the alternatives for investing Reserves including alternatives on the Island to support Island jobs not jobs in England. If I recall correctly the OE report indicated that the Island's attraction for film production has also diminished significantly.

Thanks for that Tarne. There will only be a reward against the share price if we sell the shares at a price which represents not only an increase in value but an increase at least as good as investment as say in blue-chip stock plus the added costs of overseeing the Pinewood investment compared with a blue chip one (Tynwald questions to answer, PR support, travel, possibly audit committee review etc...)

Don't forget that Eddie worked out that the money is 'not technically taxpayers' money' - as a follow up to that statement he wasn't able to say whose money it was though. Couple of thoughts Bishbashbob - the money invested has come from the Reserves. Allan Bell described the investment in Pinewood as 'high risk' on Manx Radio. It seems perfectly reasonable when Reserves are invested that the RoI should be measured directly against the returns this generates for the Reserves themselves. After all it could have bought gold, been invested as seed capital for local businesses at commercial rates or generated positive returns into the Reserve Fund in other ways. Secondly I always personally have some problems with the argument that 'it creates jobs' so by implication (not saying you are saying this but AB tends to) all is fine. Primarily this investment is underpinning jobs in England. Secondly how is the job creation measured accurately? Thirdly how much money gets back to the Reserves, which invested the money, from all of this? It was noticeable when the last film was being shot in Castletown that most of the skilled staff employed had been brought over. There were some jobs in cafes, equipment hire and accommodation. I guess I am of the school of thought that says if a proposition is commercially viable money should be raised and serviced through the capitalist system. Given we have lost £15 million over the last 3 years in the Media Development Fund that has to be reversed before anyone can legitimately claim a positive return on the film sector anyway.