Hospitality business success amidst lockdown challenges
Making movies is for many a dream job. But to keep film makers on financial track, well that too demands creativity and first-class communications, says Jellyfish Pictures Finance Director Michelle David.
Jellyfish Pictures is one of the UK’s leading film and television post-production houses, creating award-winning animations and special effects. Whilst the name might not be familiar, many of its films and TV programmes are firm family favourites and include Star Wars The Last Jedi, Solo – A Star Wars Story, How to Train Your Dragon Homecoming, The Floogals, Black Mirror and many more.
Jellyfish Pictures brings the visual magic of film and TV into cinemas and homes around the world and is recognised by a growing collection of BAFTAs and Emmys.
Looking for a new challenge following a successful career as FD to several large hospitality businesses, Michelle David joined Jellyfish Pictures in 2018 as its first FD to bring greater financial rigour to the rapidly growing business.
“I love working with businesses and business leaders who find finance boring or who see it as a bureaucratic block,” explains Michelle. “I have made it my mission to demystify finance, to make it more connected, and to bring financial rigour whilst allowing a business to grow.”
Whilst storytelling is at the heart of filmmaking, clear communication underpins financial stability and growth.
Jellyfish Pictures is at the cutting edge of film and TV visual effects and animation working alongside the world’s largest film studios, directors and acting talent. It has also developed its own original animations for children and family viewing.
In 2018, Jellyfish Pictures and its 240 staff moved into new offices in Brixton alongside significant investment in state-of-the-art technology platforms. The timing was fortuitous as just three months later the Covid pandemic hit and the country went into its first lockdown.
“The industry’s resourcing model draws heavily on talented freelance staff around the world who all want to work on the best and most interesting projects but not be tied to any one production house,” explains Michelle. “Our chief technology officer, Jeremy Smith, is quite revolutionary, recognising that to remain at the forefront of our industry you need the best people and the best technology
“Whereas previously we would bring them to London for months at a time, they can now work from anywhere in the world by dialling in remotely. It meant that when the world was locked down, our teams were able to seamlessly transition.”
That investment has seen Jellyfish Pictures open a second office in Sheffield to tap into the growing talent emerging in the north of England.
The role of the FD
The role of an FD in entrepreneurial businesses is often helping a business owner to make the difficult decision on taking on debt to fund growth and expansion. Business owners are often more comfortable holding on to cash and taking a defensive route.
“Debt is not always a bad thing and holding on to cash is not always a good thing,” says Michelle. “Part of my role is to show the leadership team how this can work, that the business can do this, and that we would have the assets needed to help the business grow and scale up.”
That same rigour was applied when looking to appoint accountants Mercer & Hole.
Jellyfish Pictures did not yet meet the audit threshold of a turnover of £10.2m, yet Michelle recognising its growth trajectory wanted to instil the good financial discipline and habits that stand up to an audit. The first step was to appoint auditors.
“I was looking for a firm that would hold our hand throughout this first audit, that would be independent yet set us up for success,” explains Michelle. “We found that in Andy Turner and his team at Mercer & Hole. The Mercer & Hole team understands our business and are excellent communicators.
“Unlike the very large firms, Andy is never too far away from the audit team, always on hand to answer questions and for those high-level conversations.”
Mercer & Hole now advise Jellyfish Pictures on its often-complex tax positions of its freelance staff who live and work around the world to ensure compliance in the UK, and on R&D tax credits.
“R&D tax credits are important to us as a business. Our previous adviser charged on a commission basis. Mercer & Hole were quick to point out that there is a more cost-effective approach, with the firm providing simple templates that HMRC recognises together with short interviews with key staff at the right time. Importantly, there was fee transparency. We know how much it was going to cost from the start.”
Michelle’s approach, supported by Mercer & Hole, is building a culture with financial rigour that is not mired in bureaucracy and red tape.
“You don’t want to scare colleagues nor do you want to hold back spending plans,” says Michelle. “By explaining every step, where they understand what is happening and why, and how it will benefit them and the business, the journey becomes much easier.”
And the approach is paying dividends.
The appetite for film, animation and special effects has never been greater, driven by the Hollywood studios and the huge streaming services. New films, new animations and original content is in the pipeline, together with an international footprint to enable film makers to access the attractive tax incentives offered by countries around the world.
Next time you settle down with the popcorn ready for the latest blockbuster or hit boxset, remember the terrific teams behind the movies and the financial leaders guiding them as they build their own stories.