Civilian Content, the UK media group and parent of National Lottery franchise The Film Consortium, has acquired full ownership of sales house The Works, buying the last 25% minority stake from BBC Worldwide to make it a wholly owned subsidiary of the group.

AIM-listed Civilian Content has also announced a significant turnaround in its trading results, with both The Film Consortium (TFC) and The Works delivering profits in 2002. The group posted a profit of £108,000 for the first time, a dramatic upturn from the loss of £1.8m in 2001.

The improvement shows the effects of a strategic review mounted in the final quarter of 2001: operating costs have been reduced by some 35% from over £3m (2001) to under £2m (2002).

"In 2001 the company wasn't very focused," managing director Chris Auty told Screendaily. "It had diversified into quite a few small businesses, which required rationalisation and in some cases closure."

Civilian Content has also announced changes at board level: chairman David Elstein is leaving after two years to join the board of NTL, with the chairmanship passing to Crispin Barker, a previous chairman and longstanding member of the board.

Producer Marc Samuelson, who has served as a non-executive director on the board for over three years, is also standing down. "My production commitments now demand my full attention but I wish the company well and believe that it can now consolidate its progress over the last 18 months," he said a statement.

"I anticipate that 2003 will be a pretty positive year for us," said Chris Auty. "The full effects of the cost-cutting will have fed through, obviously reducing the size of the board will reduce the size of the non-executive director fees and the slate is promising in terms of what it can generate."

TFC has been moving away from fully developing projects in house to focus on semi-developed projects and third party material. "There was an enormous amount of development expenditure before I took over and it was not particularly productive," said Auty. "And with the Film Council Development Fund, BBC Films and a couple of others, there is probably more development money in the UK today than there ever has been. For us to make an impact we would have to be spending a minimum of £1.5m a year and I don't think that makes commercial sense. So we tend not to develop from the ground up."

TFC this week goes into production on its 20th feature, John Boorman's drama Country Of My Skull, in South Africa with a cast including Samuel L. Jackson, Juliette Binoche and Brendan Gleeson.

Other titles this year include: In This World, Michael Winterbottom's Golden Bear-winning refugee drama; Bugs!, a 3D IMAX children's film narrated by Judi Dench; Republic Of Love, a quirky romantic comedy directed by Deepa Mehta, currently in post; and Bright Young Things, Stephen Fry's directorial debut adapted from Evelyn Waugh's Vile Bodies, also in post. All international sales for the productions, except for Bugs!, are handled by The Works. The sales house, headed by Aline Perry, has also just acquired world sales rights excluding the UK, France and Italy, to Gabriele Muccino's Ricordati Di Me (Remember Me).

TFC, one of the three National Lottery franchises established in 1997, is also preparing for the end of its lottery funding in September this year. It currently has around £5m left of the franchise money, originally worth around £30m. Against its lottery funds, TFC says it has spent over £100m of production spend.

"By September I think the business would have been tidied up to such an extent that with a combination of tax, banking facilities and possibly some new investment, we'll segueway out of [franchise status] and become essentially a production and sales house," said Auty.