UK-based Winchester Entertainment has effectively put itself up for sale, saying it is considering "strategic options".

UK distributor Helkon SK is seen as a possible buyer after earlier this year buying a 3.67% stake in the AIM-listed company, which this week declared half-way losses on continuing operations of $10m (£6.3m).

Winchester shares fell 43% to 12.4cents (7 3/4p) following the announcement. Leslie Hill, Winchester's non-executive chairman, said he was steeping down.

" Losses reported cannot continue and actions have and are being taken to address this," said Hill. "We have sold loss making Optical Image, curtailed development expenditure and cut overheads. Conditions in our markets remain difficult requiring substantial write downs of film and television programme stocks. We continue to focus on our film businesses. The board is again considering strategic options."

Along with cuts in Los Angeles, Winchester is reducing operating expenses through staff reductions and lower legal expenses in the London office. Hill said that Winchester has stopped expenditure on new development projects during the summer and is focusing on moving film rights already owned into production. Winchester also aims to board film projects outside of its own development slate.

This company said it was still owed $3.5m (£2.2m) from its German tax financing partner on Last Orders and cited costs of $640,000 (£400,000) due to delays Harv The Barbarian

" The lead actor requested guarantees which we were not willing to provide until all contracts were signed," Hill said. "As a result the actor has moved on to pursue other projects."