Uncertainty over tax breaks for film making in the UK has hit profits at Pinewood Shepperton studios.
Pinewood blames tax worries for the film industry taking a pounding
Operating profits sank to £1.6m ($2.8m) for the six months to June 30, compared with £6.6m at the same time last year.
Pinewood said UK tax changes had led to delays in filming at the studios, where James Bond movies are shot.
With new tax rules not expected until 2006, the company - which is headed by BBC chairman Michael Grade - is expecting further uncertainty ahead.
Film investment fell to £335m, from £668m in 2004.
Pinewood said it was delaying initiatives designed to enhance its studios until normal trading returned and the government had set out its new tax policy.
"Our film customers await the outcome of the government's formal consultation of UK film tax incentives," Pinewood chief executive Ivan Dunleavy said.
"This protracted process will continue to impact trading for the rest of 2005 and into 2006."
Basic Instinct II is one of just two Holllywood movies at Pinewood
In particular, the company said big budget Hollywood productions had been cut.
Of 36 films currently in production, just two Hollywood films - the Da Vinci Code and Basic Instinct II - have begun shooting at its studios since the beginning of the year.
"It has proved difficult to achieve the conversion of provisional film bookings into contracts," Mr Dunleavy said.
Pinewood has embarked on a restructuring drive, which includes plans to expand and improve its Shepperton studios in Middlesex, home of the Batman and Harry Potter film franchises.
In recent months it also snapped up Teddington Studios for £2.7m, in an attempt to increase its revenues from TV activities.
Teddington hosted films starring the likes of Errol Flynn before becoming a studio for Thames TV in the 1960s. More recently it has focussed on production of TV programmes such as The Office.
In early trade on the London Stock Exchange, shares in Pinewood Studios dipped by almost 1% to 127.50 pence.