Pinewood Shepperton has revealed that it spent£985,000 on the due diligence required for its failed bid for BBC Studios.

It its final year results, announced today (3 April), a statement ascribes this cost to a "lengthly and complex" process that was the result of the group's interest being limited to just the Studios division rather than BBC Resources as a whole.

The BBC announced it would retain the division on 7 March 2008 because it had not secured the right terms and conditions for staff.

The cost has been written off as an exceptional item in 2007 and chief executive Ivan Dunleavy said “despite this [bid falling through] we will continue to grow our working relationship with the BBC.” The group currently has a volume arrangement with the broadcaster.

Pinewood Shepperton's final-year results saw turnover down£3.3m from£40.7m to£37.4m, which Dunleavy attributed to fluctuations in the film market caused by delays in production starts and the writer's strike in the US.

Televisions revenues were£12.1m up£0.3m, from£11.8m year on year and the final year statement said that this exceeded expectations in the second half of the year. Dunleavy said that increases in post production conducted across the group had increased by an equivalent percentage. Film revenues dropped£3m from£22.5m to£19.5m.

Regarding the TV market, the group has added to its BBC volume agreement with an agreement with Celador, its new television clients include Shed Media, Twofour and Olga TV. Although Dunleavy would not be drawn on whether the group is looking to establish volume agreements with these companies, he said: “It is a business structure that works well.”

The final year results stated: “The UK's independent television production market is estimated to have grown by just over 9% in 2007 with total revenue reported at£2.14bn.

"The major independent production companies generated over 43% of sector revenue, mostly as the result of commissions by UK broadcasters."