Bringing a ray of sunshine to British films

As his sci-fi fantasy arrives in UK cinemas, the producer talks about keeping a realistic eye on the money

Sunshine, the sci-fi film which opens today, should provide a ready metaphor for the British film industry. As the onscreen team struggle to save the Earth with a desperate attempt to reignite the fading sun, so a few British film-makers struggle to save a beleaguered industry from being eclipsed by Hollywood.

In reality the UK film industry is enjoying one of its rare moments in the sun and DNA Films, the producer/financier of Sunshine, is playing its full part in the renaissance. Andrew Macdonald, the 41-year-old who formed DNA Films, has either produced or financed three recent movies that are expected to enter the top 10 UK grossing films - The Last King of Scotland, Notes on a Scandal and The History Boys.

Sunshine, starring Cillian Murphy as a member of the spaceship crew battling to save Earth in 2057, is the company's biggest gamble since it set up a joint venture with Fox Searchlight, the distribution arm of 20th Century Fox, in 2001. Although filmed largely in an East End warehouse, the special effects pushed the budget to $45m (£23m), almost three times DNA's average. Yet hopes are high at the company. For the first time in several years, the success of a spate of films - including Oscar-winners such as The Queen - has sparked talk of a new golden age for the UK film industry. "Oh God, don't say that," says Macdonald. "That's always the kiss of death!"

Yet Macdonald, the grandson of emigre film-maker Emeric Pressburger and older brother of Oscar-winning director Kevin, stresses that DNA is unique in British film and not a production company. "I've tried to build a company the way you would any other company. My whole reason for creating DNA was to make a film company that really works. Production companies don't really work." DNA Films is a 50/50 joint venture between the Film Council and Fox, a subsidiary of Rupert Murdoch's media empire. The $50m used to set it up in 2001 has produced seven films to date, but not all have seen DNA take the traditional role of creative producer. It provided the finance and distribution for Notes on a Scandal, whereas for Sunshine, Macdonald was involved from the film's inception.

Trainspotting

The aim is to spread the risk of a creative business that depends on the box office. The finances of the UK film industry are complex. Macdonald's earliest production house, Figment Films, made a "minuscule" amount, about 5%, from the film that first brought him to Hollywood's attention - Trainspotting - even though its $4m outlay returned approximate revenues of $80m.

On Notes on a Scandal, where DNA provided 100% of the finance but none of the creative input, DNA has taken about 40% of the total $50m box office so far. After Fox takes its undisclosed distribution fee, profit is put back into DNA for future projects. Such successes fund riskier projects such as Sunshine.

Macdonald used $25m of the original UK Film Council funding to form the $50m joint venture with Fox Searchlight in 2001. The partnership is up for renewal in 2008. It is unclear what return the government-funded council will get, although it will probably be higher than that made from the original funding in 1997. This has provoked some criticism in the industry as the original £29m from the Film Council was meant to fund 16 films but ended by financing significantly fewer. Macdonald has an agnostic and still relatively unusual approach to the films his company supports.

"I don't want just to sit down and have a good idea and then spend the next four years getting it made. I do that as well but it's difficult. Great British producers, people like David Puttnam, they did it. But you can't really create a business that way ... You have to get involved in a variety of stuff to make money ... You need to get into this game of doing 10 or more films and then they balance out."

The average return for the seven films supported by the joint venture to date has been 20%, the sort of figure that should attract other financiers such as hedge funds once the Film Council money is up for repayment next year. If the company's two big forthcoming releases, Sunshine and 28 Weeks Later, a follow-up to the company's earlier sleeper hit 28 Days Later, fail to deliver, the average could fall. But Macdonald believes enough of the risk is hedged. His Scottish can-do attitude has won him many fans in the US.

Scott Rudin, the film producer behind hits from The Truman Show to The Queen, has worked with him on several films. "I have an enormous respect for Andrew and am personally very fond of him," Rudin says. "He cares about movies, is shrewd and yet doesn't take it all too seriously. He doesn't think it's genetic research."

Yet although in Britain DNA ranks second only to Working Title - the company behind Notting Hill, Love Actually and Mr Bean's Holiday - its unusual financial status has attracted some sniping. When I mention this to Rudin, he says: "The British film industry - hasn't it historically resisted any kind of entrepreneurship?" The director of Sunshine and a long-time collaborator, Danny Boyle, says the UK industry tends not to appreciate the money-managing skills of the producer. "There should be a few more producers as canny as Andrew Macdonald."

Macdonald himself is more circumspect, although there are some barbs for what he obviously sees as the failures of the establishment. "I don't just think I want to make a film about Proust because I read it at college," he says. "And there are a lot of people who think like that. I only want to make films that I think are going to be successful." Tall and restless, he says: "I don't think we have a great love of film in Britain, not like the French or Italians. I just don't think you'll find the middle-class Guardian reader goes to the cinema as much as they do other things."

After A Life Less Ordinary and The Beach failed to live up to the huge and unexpected success of his first two films, he was reported to have decided to premiere all his films in the US. He admits the US is better when a film requires "specialist handling" or a city-by-city release, for example. He is, however, committed to making films in the UK, partly because his seven collaborations with Danny Boyle so far have been better for it. "We could have saved $3m-$4m by going to New Zealand but we would make a better film here."

He may criticise UK film-goers but he is a huge fan of the British government, which has introduced new tax reliefs for the film industry. "I'm a supporter of this government and a bit of a fan of Gordon [Brown, the chancellor]."

28 Weeks Later, to be released this summer, is the first DNA film to use the new 20% tax relief for UK-made films, introduced by the chancellor last year. "I might feel differently if it doesn't work ... but there aren't many creative industries given the same amount of help," says Macdonald. He is more concerned by the weak dollar, which is making filming in the UK expensive. "We have avoided going to Poland or the Czech Republic but that is going to get more and more difficult."

Macdonald turned to his maternal grandfather - a man responsible for The Red Shoes and Black Narcissus among other classics - for advice when he first wanted to go into the industry. But he got his first job - as an intern for Ocean Pictures in Hollywood - through the "usual way" of using a "friend of a friend". After 18 months on the west coast, he returned to Scotland. His big break came in a chance meeting with doctor-turned-screenwriter John Hodge at the Edinburgh film festival in 1990 that resulted in Shallow Grave.

The Sweeney

Shunning "show business" friends, he confesses to not watching as many films as he should since his wife gave birth to twin boys just over two years ago. The couple now have five children. "I used to be obsessed with watching films but since having kids I probably go less than average. It's really crap. The last film I saw was probably Charlotte's Web and Ninja Turtles will probably be next." He wants to make "some kind of kids' film".

Other projects include a film version of 1970s TV cop classic The Sweeney, and a film version of the Kazuo Ishiguro book, Never Let Me Go. He wants to expand into television and the internet. "My theory about the British film and TV business is that if there were no more British films in the cinema, nobody would care. But if you turned off Coronation Street and Match of the Day, they'd be rioting in the street."

The "single-minded" Macdonald, wants to change that: "I want people to think, this is a British film and that makes me want to see it even more."

The CV

Born Glasgow, January 1 1966, the grandson of the film-maker Emeric Pressburger

Education Glenalmond College in Perthshire

Career

1985 - 1993 Worked as a runner and in various production jobs in Hollywood and Scotland. Made Scottish TV documentary series with brother Kevin, who this year directed Last King of Scotland

1993 Set up Figment Films and produced Shallow Grave with the director Danny Boyle and writer John Hodge, followed by Trainspotting in 1996, then A Life Less Ordinary and The Beach

1997 Joined Duncan Kenworthy, producer of Four Weddings and a Funeral, to set up DNA, which was awarded £29m by the Arts Council

2001 Used $25m of public money to set up DNA Films, a new joint venture with Fox Searchlight, distribution arm of 20th Century Fox. Kenworthy took a non-executive role.

Recent productions include Sunshine, which opens today. The Last King of Scotland, Notes on a Scandal and 28 Days Later

Family Lives with wife Rachel, a former costume designer, and five children aged 2 to 9