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Company provides production equipment to film and TV giants
Thursday 13 Jan 2022 Author: Ian Conway

The first new company to list on the junior market this year is also one of the most colourful. Facilities by ADF (ADF:AIM), which raised £18.4 million last week valuing the firm at £38 million, services the multi-billion pound UK film and television industry.

Established in the early 1990s, the company is the number one provider of premium production facilities like make-up, costume and artiste accommodation trailers with a 35% share of the high-end television market thanks to its fleet of over 500 vehicles.

It has worked with all the leading production companies including the BBC, ITV (ITV), Netflix, Sky, Disney, HBO and Apple, and was involved in major TV series including The Crown, Gangs of London and Peaky Blinders.

The firm’s average revenue per production has more than doubled in the last three years to £607,000 as programmes and films have become longer and more complex.

According to the BFI (British Film Institute), spending on film-making and high-end TV in the UK hit £6 billion last year, more than double the amount in 2020 which admittedly was impacted by Covid restrictions.

For ADF, 2020 revenue was £8 million against nearer £16 million in 2019, but 2021 saw a dramatic rebound with the firm garnering £11.5 million of revenues in the first half alone, putting it on track to top £20 million for the full year.

The recovery in EBITDA (earnings before interest, taxes, depreciation and amortisation) was even more impressive thanks to a combination of higher prices and higher fleet utilisation, with the increased revenues generated translating straight into earnings.

Due to the material increase in the consumption of film and TV through streaming services, all the major US streaming companies have set up permanent bases in the UK taking out studio leases of 10 years or more.

This has driven the uptake of ADF’s services with the firm’s production fleet already almost fully booked for this year and customers having to book up to seven months in advance.

Proceeds from the listing are therefore being used to buy more equipment to satisfy the ever-increasing demand. ‘Producers need our vehicles on set, on time, all the time’, says chairman John Richards.

Ultimately, the group has ambitions to grow its annual revenue to £100 million, ‘but that isn’t going to happen organically’ admits Richards. While it already has a large chunk of the UK market, there is scope to take further share with small local bolt-on acquisitions.

There is also the potential to expand into complementary services like transporting lighting and sound equipment and props, making ADF a ‘one-stop shop’ for its film and TV clients.

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