Aardman, Creator of Wallace & Gromit, Falls Short of Profit Return

Animation Studio Cuts Annual Loss to £1.1 Million Amid 'Challenging Market' for Children's Content, but Hasn't Pulled Out the Wensleydale Celebrations Yet. Aardman, the British animation studio behind the cheese-loving inventor Wallace and his beloved dog Gromit, has yet to reach its goal of returning to profit. The employee-owned business had aimed to post a small profit in 2025 after two consecutive years of losses, but delayed...

Don't break Wensleydale's party just yet. Aardman, the British animation studio behind cheese-loving inventor Wallace and his beloved dog Gromit, has moved away from a return-to-black goal.

The employee-owned business had planned to post a small profit in 2025 after two consecutive years of losses, but was hit by production delays and a "challenging market" in children's content.

So, although the company's revenue last year rose 8% to £20.4m, it was down £1.1m, albeit an improvement on the £4.1m loss the year before.

Aardman, which also produces the popular Shaun the Sheep series, said the timing of some "significant" deals and weaker revenue in some parts of the business hurt its bottom line.

It hopes to boost new projects, such as the recently opened exhibition at London's Lightroom exploring its 54-year history, as well as the third Shaun the Sheep film, which was released last month.

And famously silent Gromit will soon have a voice with an audio book of his autobiography this month, read by actor Martin Freeman.

In 2024, the studio launched a five-year business plan that included investing more in intellectual property and cutting costs.

Since then, it has enjoyed the success of Wallace & Gromit: Vengeance Most Fowl, which broke viewing records in Christmas 2024 as the most watched animated film on UK TV since 2002.

The film won two BAFTAs and was nominated for an Oscar for the best animated feature film.

In its annual accounts, Aardman said it had undertaken another strategic review in early 2026 as it looked for ways to manage inflationary cost pressures, which led to "some additional work".

Its headcount for fiscal year 2025 had already been reduced from 297 to 230, with permanent staff reduced from 128 to 110.

The studio also identified AI as a major risk and uncertainty for its business. The publication wrote that AI and generative AI are "transforming parts of the creative industries, creating opportunities to improve workflows and support innovation, while also raising important legal, ethical and authorial issues."

It said the development and responsible and selective use of this technology is critical, but only in a way that "supports and celebrates human creativity and artistry rather than supplanting it."

Peter Lord and David Sproxton founded the studio in Bristol in the early 1970s. They started animating as teenagers and sold their first short - starring a superhero called Aardman - to the BBC's Vision On in 1972.

They created Morph for the children's program Take Hart in 1977. The studio began to appeal to an adult audience through Channel 4's Conversation Pieces and produced animators including Nick Park, Wallace and Gromit.

Aardman became employee-owned in 2018, with Lord and Sproxton transferring majority ownership to employees. Maintaining the company's independence, the pair were knighted earlier this year.