Aardman, the animation studio renowned for creating Wallace & Gromit and Shaun the Sheep, has reported an increased pre-tax loss of £5m for 2024, up from a loss of £550,135 in 2023.
The Bristol-based company's turnover also fell from £26.7m to £20.9m, according to newly filed accounts at Companies House, as reported by .
Despite this, the employee-owned firm had anticipated a loss-making year in 2024 as part of its five-year business plan, which included significant investment in its intellectual property.
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Costs reached a record high in 2024 due to redundancies made during a comprehensive review of operations.
However, the overall number of employees actually rose over the year as new roles were created within the company.
No dividend was issued for the year, compared to a payout of £155,480 in 2023.
In terms of regional performance, Aardman's 海角视频 turnover marginally decreased from £10.3m to £10.2m, while in the European Union it dropped from £3.4m to £1.8m.
Sales in the USA saw a significant reduction from £11m to £4.5m, but there was growth elsewhere, with sales increasing from £1.9m to £4.2m in other global markets.
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Despite these financial challenges, Aardman celebrated success with the release of 'Wallace & Gromit Vengeance Most Fowl' on Christmas Day 2024, which won two BAFTAs and received an Oscar nomination.
Additionally, early production began on a new feature film, 'Shaun the Sheep The Beast of Mossy Bottom', during the year.
A third series of Very Small Creatures and a seventh series of Shaun the Sheep were both in production.
At the close of 2024, it was revealed that Aardman and The Pokemon Company International were working together on a project – a stop-motion series for Pokemon Tales The Misadventures of Sirfetch'd and Pichu.
Aardman makes redundancies
A statement endorsed by the board said: "The directors set a rolling five-year plan and budget and are confident of achieving overall forecast financial performance across the period in carrying out its principal activities."
It continued: "2024 was budgeted to be loss-making, largely due to it being a year of investment in our own IP [intellectual property] – this is standard practice for independent studios (we invest in our own IP up-front then recoup the costs in sales later down the line) and in line with our five-year business plan.
"In addition, we conducted a review of our development projects and our completed unrecouped productions, which resulted in accounting adjustments for impairments and write-offs being applied.
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"The executive board feels that this is a prudent financial approach in the current uncertain environment for entertainment production."
Aardman also said: "With current market conditions presenting significant challenges across the industry, and costs forecast to continue increasing, a detailed business review was conducted in the year, with a view to identifying ongoing savings and ensuring that we have more flexibility and focus in our ability to develop, product and monetise film and senes productions.
"To mitigate further we hired new expertise to help shape the business for long-term success, redefined existing roles and made a number of roles redundant to ensure sustainability in our operations and support our growth plan.
"We also revised the business model for our IP in games to exploit via licensing to third-party developers and publishers, ceasing in-house games development and production.
"In addition we made a decision to no longer offer services as a distributor of third-party children's series content.
"After the implementation of the outcomes of the review we feel that we are in a strong position to navigate the challenges facing our industry."
The animation studio also revealed that its operational expenses rose in 2024 compared to the previous year, reaching "the highest recorded by the company, but were nonetheless slightly under the budgeted value despite including termination costs associated with redundancies."
The firm attributed the surge primarily to escalating labour costs, driven by pay rises and redundancy payouts, an increased average headcount, and a reduction in staff time charged to production jobs.