UK box office could see its strongest year in four years in 2007 as first quarter reports show a 10% year-on-year increase. After 12 weeks, UK cinemas have generated $379.4m (£193.7m) from 166 films, compared to $346.1m (£176.7m) in the same period of 2006, according to Nielsen EDI.

Recent years have seen the UK remain virtually static while other territories have seen more activity. In 2005, revenues of many territories decreased while the UK crept up by 1%. In 2006, the reverse happened: a string of markets saw higher box office returns - particularly China which was up 31% - while the UK slipped 1.8% year-on-year.

A solid first quarter this year could indicate that the UK is going up significantly and breaking away from its plateau.

The year kicked off with strong holdovers from the Christmas season: Casino Royale passed $100m in January and Night At The Museum hit $30m after three weeks. Happy Feet, released on December 8, 2006, also hit $30m in January.

Big opening weekends from a string of high-profile films have also contributed to the boost in revenue. Rocky Balboa took $7.1m in its first weekend while The Pursuit Of Happyness generated a sizable $4.1m in its first three-days. Music And Lyrics and Charlotte's Web opened at $3.7m and $3.6m respectively and Dreamgirls, Arthur And The Invisibles and Notes On A Scandal all passed the $2m mark in their first weekends. Action-epic 300 hit $9.2m in its first weekend in March.

Local cop comedy Hot Fuzz is proving the UK can generate strong home-grown material at unusual times. February is not usually seen as the month for breakout hits but Edgar Wright's follow up to Shaun Of The Dead generated $11.5m in its opening weekend across 441 sites and has gone on to take $40.5m in the UK. Another local film, Mr Bean's Holiday, opened with $12.6m (including previews) across 512 sites, helping to increase last weekend's year-on-year performance by 105.6%.

Film Distributors' Association chief executive Mark Batey says the combination of successful local product and the prospect of a huge summer spells positive UK results. "The UK market is in good shape and heading for what should be a fantastic summer," he says. "2007 looks like it could really set records."

Sequel season

Summer sequels such as Harry Potter And The Order Of The Phoenix, Shrek The Third and Spider-Man 3 are all expected to generate large returns in the UK market. And The Simpsons Movie should also boost UK cinema takings. Last week, over two million people in the UK watched repeat episodes of The Simpsons and if all of these went to see the film in its opening weekend, it could generate a staggering $15m.

But 20th Century Fox International's executive vice-president Christian Grass says good local product is pivotal to successful box office return in a market. "The impact of local product can make or break a year and that is the big difference in the UK," says Grass. "There's no reason why this shouldn't be a record year for the UK. It's a healthy market and it's a good market in terms of frequency of movie-going. Once the summer rolls around with all of these big films, we may see a record year."