| REGISTERED NUMBER: |
| Financial Statements |
| for the Year Ended 31 December 2025 |
| for |
| Headline Pictures Limited |
| REGISTERED NUMBER: |
| Financial Statements |
| for the Year Ended 31 December 2025 |
| for |
| Headline Pictures Limited |
| Headline Pictures Limited (Registered number: 03090303) |
| Contents of the Financial Statements |
| for the Year Ended 31 December 2025 |
| Page |
| Company Information | 1 |
| Balance Sheet | 2 |
| Notes to the Financial Statements | 3 |
| Headline Pictures Limited |
| Company Information |
| for the Year Ended 31 December 2025 |
| DIRECTORS: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Statutory Auditors |
| Chartered Accountants |
| Reedham House |
| 31 King Street West |
| Manchester |
| M3 2PJ |
| Headline Pictures Limited (Registered number: 03090303) |
| Balance Sheet |
| 31 December 2025 |
| 2025 | 2024 |
| Notes | £ | £ |
| FIXED ASSETS |
| Intangible assets | 4 |
| Tangible assets | 5 |
| Investments | 6 |
| CURRENT ASSETS |
| Stocks | 7 |
| Debtors | 8 |
| Cash at bank and in hand |
| CREDITORS |
| Amounts falling due within one year | 9 | ( |
) | ( |
) |
| NET CURRENT ASSETS/(LIABILITIES) | ( |
) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
( |
) |
| CREDITORS |
| Amounts falling due after more than one year | 10 | ( |
) | ( |
) |
| NET LIABILITIES | ( |
) | ( |
) |
| CAPITAL AND RESERVES |
| Called up share capital |
| Share premium |
| Retained earnings | ( |
) | ( |
) |
| SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements |
| for the Year Ended 31 December 2025 |
| 1. | STATUTORY INFORMATION |
| Headline Pictures Limited is a |
| 2. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| Related party exemption |
| The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
| Turnover |
| Turnover is measured at fair value of the consideration receivable per the contractual terms and stated net of value added tax. |
| Commercial revenue is recognised on delivery of the associated programme to the customer, therefore revenue is recognised 'episodically' on delivery of each episode. |
| Intangible assets |
| Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less |
| any accumulated amortisation and any accumulated impairment losses. |
| Computer software is being amortised evenly over its estimated useful life of four & five years. |
| Tangible fixed assets |
| Computer equipment | - |
| Tangible fixed assets are recorded at cost less accumulated depreciation and accumulated impairment losses. |
| Investments in subsidiaries |
| Investments in subsidiary undertakings are recognised at cost. |
| Stocks |
| Development expenditure on television programmes is recognised as stock where the production is intended for: |
| - sales to broadcaster or streaming platforms; or |
| - exploitation through licensing and distribution |
| Cost are capitalised when: |
| - they relate directly to specific productions; and |
| - there is reasonable expectation of future economic benefit. |
| Development expenditure is valued at the lower of cost and net realisable value. |
| Productions in progress and completed programmes are reviewed at each reporting date for indicators of impairment. |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2025 |
| 2. | ACCOUNTING POLICIES - continued |
| Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
| Deferred tax |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
| Foreign currencies |
| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
| Pension costs and other post-retirement benefits |
| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2025 |
| 2. | ACCOUNTING POLICIES - continued |
| Going concern |
| The UK drama sector remained in a post-"Peak TV" contraction throughout 2025, compounding a significant downturn already underway since 2023. Independent evidence confirms the pressure has been severe: Ofcom's July 2025 review found "seismic shifts" underway in the market, with over 70% of UK independent producers at risk of closure by mid-2025 absent improved conditions, and scripted co-commissions with European partners down 50% since 2023. Licence fee income and linear advertising revenue have fallen by more than a quarter in real terms since 2016, continuing to squeeze broadcaster commissioning budgets. Globally, the major streaming platforms cut scripted orders by approximately 24% year-on-year in 2025, with Western Europe particularly affected (2025 volumes down around 44% in genres including crime and thriller), as platforms including Netflix continued to favour licensing over original commissions and tightened production budgets. This shift also affected projects already in the pipeline: a number of productions greenlit in prior years failed to proceed into production during 2025, as streamers moved away from all-territory commissions structured as Production Service Agreements towards more selective, territory-by-territory licensing deals, which reduced the guaranteed production fee that had previously underpinned many projects' financing. These pressures were compounded by the continuing knock-on effects of the 2023 US strikes on production pipelines and by wider economic and political uncertainty following the UK and US elections. The contraction has also driven significant consolidation among UK buyers and producers: since the year end, Sky has agreed to acquire ITV's broadcast and streaming business for up to £1.6 billion, and Banijay Entertainment has completed its merger with All3Media to form the world's largest independent production company. Both developments point to a market in which fewer, larger players control commissioning and distribution, intensifying competition for independent producers of Headline's scale. |
| Headline Pictures has continued to face company-specific setbacks that began in 2023 with the demise of Bron Studios. During 2025, the company made Tom Sherry, Executive Producer, redundant; he left the company in the first quarter of the year. As his role had been costing the company in excess of £300,000 per year, the resulting saving is substantial. Following his departure, the company operated for the remainder of the year with, in effect, only one permanent member of staff. The administration of Headline's co-producer Bron Studios continued throughout 2025, and negotiations and discussions regarding the Kin IP held in that administration continued for the duration of the year. |
| By the end of the year 2025, the company had reached an agreement in principle under which Creative Wealth, one of Bron Studios' principal creditors, would acquire the 50% interest in the Kin IP held by Bron from the UK administration. This would preserve Headline's income stream from Series 1 and 2 and open the path to greenlighting Series 3, for which Fifth Season, RTÉ, the BBC and Screen Ireland have each confirmed their respective commissions and support. As at the date of this note, this agreement has translated into confirmed production: principal photography on Series 3 of Kin is scheduled to commence on 5 August 2026. |
| These challenges have contributed to a financial loss for the reporting period ended 31 December 2025. |
| In response, Headline Pictures has continued to develop its existing slate and has strategically focused on optioning proven drama formats from Israel, which have recognised market value and serve as proof of concept in a more risk-averse commissioning environment. Development volume held steady in 2025 but is expected to reduce significantly in 2026; the company will concentrate its development resource on a smaller number of IP, packaging them more intensively in order to compete effectively amid intensifying packaging competition in the UK and wider Anglo-Saxon market. The company continued its programme of reduced overheads through 2025 and, at the end of the year, reached an agreement in principle to convert Christian Baute's role from a loan-out arrangement via UGC to an independent contractor basis. Under the proposed terms, Mr Baute would receive a share of the future contracted production or EP fee that Headline receives on relevant projects on which Mr Baute would intervene in place of a fixed salary, removing the associated overhead of salary, travel and accommodation costs. Any saving will only materialise from the 2026 fiscal year but is expected to be significant. |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2025 |
| 2. | ACCOUNTING POLICIES - continued |
| Headline Pictures continues to benefit from the financial support of UGC, its principal shareholder, and has significantly reduced its cost base relative to any of its competitors. In March 2026, UGC further strengthened its commitment to the business by acquiring the 156 shares in Headline previously held by Christian Baute, making UGC the company's sole operative shareholder. This backing, together with the confirmed commissioning support from Fifth Season, RTÉ, the BBC and Screen Ireland, the agreement in principle with Creative Wealth, and the subsequent confirmation of Series 3 production commencing in August 2026, provides a sound basis for the presentation of these financial statements on a going concern basis. |
| 3. | EMPLOYEES AND DIRECTORS |
| The average number of employees during the year was |
| 4. | INTANGIBLE FIXED ASSETS |
| Computer |
| software |
| £ |
| COST |
| At 1 January 2025 |
| and 31 December 2025 |
| AMORTISATION |
| At 1 January 2025 |
| Amortisation for year |
| At 31 December 2025 |
| NET BOOK VALUE |
| At 31 December 2025 |
| At 31 December 2024 |
| 5. | TANGIBLE FIXED ASSETS |
| Computer |
| equipment |
| £ |
| COST |
| At 1 January 2025 |
| Additions |
| At 31 December 2025 |
| DEPRECIATION |
| At 1 January 2025 |
| Charge for year |
| At 31 December 2025 |
| NET BOOK VALUE |
| At 31 December 2025 |
| At 31 December 2024 |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2025 |
| 6. | FIXED ASSET INVESTMENTS |
| Shares in |
| group |
| undertakings |
| £ |
| COST |
| At 1 January 2025 |
| Disposals | ( |
) |
| At 31 December 2025 |
| NET BOOK VALUE |
| At 31 December 2025 |
| At 31 December 2024 |
| The company's investments at the Balance Sheet date in the share capital of companies include the following: |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2025 |
| 6. | FIXED ASSET INVESTMENTS - continued |
| Registered office: Reedham House, 31 King Street West, Manchester M3 2PJ |
| Nature of business: |
| % |
| Class of shares: | holding |
| 7. | STOCKS |
| 2025 | 2024 |
| £ | £ |
| Development expenditure |
| 8. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2025 | 2024 |
| £ | £ |
| Trade debtors |
| Amounts owed by group undertakings |
| Other debtors |
| Prepayments |
| 9. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2025 | 2024 |
| £ | £ |
| Trade creditors |
| Social security and other taxes |
| Other creditors |
| Accrued expenses |
| 10. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| 2025 | 2024 |
| £ | £ |
| Amounts owed to group undertakings |
| Other creditors |
| Headline Pictures Limited (Registered number: 03090303) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2025 |
| 11. | SECURED DEBTS |
| The following secured debts are included within creditors: |
| 2025 | 2024 |
| £ | £ |
| Other loan | 400,000 | 400,000 |
| A loan from UGC Images SA is secured by a mortgage over all of the fixed and current assets of the company, owned now and in future, including the intellectual property and all fees, royalties and other rights deriving from the intellectual property. |
| 12. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
| The Report of the Auditors was unqualified. |
| for and on behalf of |
| 13. | RELATED PARTY DISCLOSURES |
| At 31 December 2025, other creditors due after more than one year included balances amounting to £31,397 (2024: (£29,467) owed to previous directors of the company. There are no fixed repayment terms and interest has been charged to the company at a rate of 1.5% over base. |
| 14. | ULTIMATE CONTROLLING PARTY |
| The parent company is UGC Images SA, a company registered in France. The ultimate holding company is UGC SA, 24 Avenue Charles De Gaulle, 92200 Neuilly-Sur-Seine, France; a company registered in France. |