British horror company Hammer Films is to develop a slate of low-budget horror movies with Australian production outfit, Pictures in Paradise.

The partners aim to deliver a slate of up to six horror films over five years. The films will be targeted at young cinemagoers and designed to have strong potential in other media, especially DVD.

"We are taking Hammer's heritage and reinventing the label as a new gothic brand," Paradise chief Chris Brown told "I've made a lot of films, a lot of low-budget films and a lot of horror films and I've been working towards this for several years. Australia provides good value for money for filmmakers."

Development costs and chores will be divided between the partners. Paradise, which has produced horror titles including Cubbyhouse and The Locals, plus low-budget teen movies such as Blurred and Under The Radar, will spearhead physical production. Hammer will look after production funding and distribution.

"This deal gives us a terrific opportunity to deliver highly commercial, low budget, English-language horror movies for a worldwide teen audience," said Hammer chief executive Terry Ilott.

Hammer, renowned in its heyday for the blood-spattered likes of Curse Of Frankenstein, Dracula and The Curse Of The Mummy's Tomb, was recently re-launched as a horror brand by Ilott and a group of investors. The operation has been developing its classic titles for large-scale remakes.