Wallace & Gromit maker Aardman falls short of return to profit
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Don’t break out the celebratory Wensleydale just yet. Aardman, the British animation studio behind the cheese-loving inventor Wallace and his beloved dog Gromit, has fallen short of a target to get back in the black, its accounts show.
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The employee-owned business was aiming to record a small profit in 2025 after two years of consecutive losses but was hit by production delays and a “challenging market” in children’s content.
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So although its revenues jumped 8% to £20.4m last year, it was in the red to the tune of £1.1m, albeit an improvement on the previous year’s £4.1m loss.
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Aardman, which also produces the popular Shaun the Sheep series, said the timing of some “significant” deals and weaker income in some parts of the business had hurt its bottom line.
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It will be hoping for a boost from new projects, such as a recently opened exhibition at Lightroom in London that explores its 54-year history, as well as a third Shaun the Sheep film, which was released last month.
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And the famously silent Gromit will soon be getting a voice, with this month’s audiobook of his autobiography read by the actor Martin Freeman.
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In 2024 the studio launched a five-year business plan, which involved more investment in its intellectual property and cutting back costs.
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Since then it has enjoyed the success of Wallace & Gromit: Vengeance Most Fowl, which broke viewing records over Christmas in 2024 as the most watched animated film broadcast on British television since 2002.
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The film won two Baftas and received an Oscar nomination for best animated feature film.
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Aardman said in its annual accounts that it had undertaken a further strategic review in early 2026 as it looked for ways to manage inflationary cost pressures, which resulted in “several redundancies”.
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Its headcount for the 2025 financial year had already shrunk from 297 to 230 people, with permanent staff falling from 128 to 110.
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The studio also recognised artificial intelligence as a principal risk and uncertainty to its business. It wrote that AI and generative AI were “reshaping parts of the creative industries, creating opportunities to improve workflows and support innovation while also raising important legal, ethical and authorship issues”.
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It said it was vital this technology was developed and used responsibly and selectively, but only in ways that “support and celebrate human creativity and craft rather than replace it”.
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Peter Lord and David Sproxton co-founded the studio in the early 1970s in Bristol. They began animating as teenagers, selling their first short – starring a superhero called Aardman – to the BBC’s Vision On in 1972.
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They created Morph for the children’s programme Take Hart in 1977. The studio began appealing to adult audiences through Channel 4’s Conversation Pieces series, and its animators, including Nick Park, went on to make Wallace & Gromit.
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Aardman became employee-owned in 2018, with Lord and Sproxton transferring majority ownership to staff to safeguard the company’s independence. The pair were knighted earlier this year.
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