City Screen, the UK's leading specialist exhibitor, is expanding its business and launching a cinema programming and management division.

The new arm will be headed up by Clare Binns, previously managing director of Zoo, the cinema programming and management outfit.

In a significant move towards consolidation in the UK's specialised and arthouse exhibition sector, Binns will bring Zoo's 12 sites to City Screen, subject to negotiation with the individual theatres. These include some of the most prestigious specialised cinemas in the UK, such as the Phoenix in East Finchley, the Everyman in Hampstead and the Electric in Notting Hill. Zoo is expected to wind down in the near future.

"In these supposed dark days for independent film, this alliance is an assured way to further grow audiences for foreign, arthouse and specialised film right across the country," said Tony Jones, City Screen's director in charge of programming.

City Screen, the UK's seventh largest exhibitor, currently has a network of 14 city centre cinemas, and programmes around five more, taking its total to 58 screens.

City Screen this month opens the Picturehouse cinema at the $16.4m FACT arts building in Liverpool. The company, which last year received $10m equity funding from venture capital outfit Art Alliance, is also in final negotiations to redevelop the recently closed Greenwich High Street Cinema as the Greenwich Picturehouse.

While the saturated mainstream UK exhibition sector is heading into a period of consolidation - a question mark hangs over the future ownership of Odeon, Ster Century and Cine-UK - the UK's specialised exhibition sector is the subject of intense debate. The Film Council has yet to announce final plans for its national 'virtual circuit', which has $23m over four years to boost the range of films available to UK audiences.

"We have always been positioning ourselves as a specialised circuit," City Screen director Lyn Goleby told Screendaily. "We're jokingly calling the new division City Screen Virtual Ltd."

Said Clare Binns: "This alliance will consolidate the independent sector. We share the same goals and I am delighted to be part of a company that is building cinemas that truly deliver to a discerning audience."