UK producer Nigel Thomas explains why his production company Matador Pictures is going from strength to strength.

That UK independent production company Matador Pictures has just celebrated its 10 year anniversary is no mean feat, given the financial challenges facing film producers in the UK.

Nigel Thomas, who set up the company in 1999 with Peter Watson Wood, attributes some of the company’s success to his ability to combine the creative and business sides of producing.

“Quite often you find producers either know about one side or the other.  I have tried to deal with it from both the creative side, but also learnt how to deal with the steely eyed investors.”

One thing that marks out Matador Pictures from other production companies is its finance arm, which was established in 2006 with finance company Regent Capital, and raises its money through a series of “cinema companies” via the Enterprise Investment Scheme (EIS).

“The structure is straightforward,” says Thomas. “We put in around 30% of a film budget, including the UK tax credit. We designed it to co-finance our own in-house productions, so our approach is very producer friendly. Although there are tax benefits to our investors, these are incidental to the goal of running the Cinema companies as profitable enterprises in their own right.”

Through its finance arm, Matador has co-funded projects including Ken Loach’s The Wind That Shakes The Barley and the upcoming feature directorial debut of comedian Ben Miller, Huge, starring Noel Clarke, set in the world of stand up comedy.

With his investor hat on, Thomas says he understands why financiers see producers as “luvvie layabouts”, and unlike most producers, Thomas is on the side of the investor when it comes to recouping money on a film.

“Producers think that they should have a preferential position when the film starts to make money. Actually, it is the investors that should be rewarded first, because you want them to come onboard again. The producers are going to make the film no matter what” he says.

2010 looks set to be a busy year for Matador. Currently in post is Hattie Dalton’s £500,000 drama Barafundle Bay, co-financed by Matador Pictures with the Film Agency for Wales, about a group of friends, one of whom is dying, who go on a road trip.

Matador has also stumped up a third of the budget for the £3m Killing Bono, which has just finished shooting in Belfast, and is based on Neil McCormick’s book about two rival school bands, one of which turns out to be U2.

Meanwhile, another Matador financed project, Philip Ridley’s Heartless, starring Jim Sturgess, Timothy Spall, Clemence Posy and Noel Clarke is also being released by Lionsgate in the UK in May. The film, which tells the story of a young man whose life has been blighted by a heart shaped birthmark, is co-financed by CinemaNX and shot in both London and the Isle of Man.

Despite the recent emphasis on financing, Thomas insists that Matador is first and foremost a production company.

“We used to develop our own stuff, then we had a flurry of being executive producers, but now we want to go back to producing at least half the films we put money into. It is about bringing some added value, rather than just writing the cheques.”

One such in house project is the music-based film Dirt Road to Lafayette, written by Scottish writer and booker prize winner James Kelman, which is being directed by Kenny Glenaan, who Thomas discovered when he directed the Matador financed 2008 drama Summer. Shooting will begin on the project in Louisiana in the spring.

Going forward, Thomas is also considering the possibility of moving into international sales. “We have accumulated a lot of rights over the years, and it’s always good to have control over your own destiny.”

Still, whilst Matador might be thriving, Thomas is determined not to fall into the trap of becoming a big business. “Friends of mine who work at or run studios are about as far removed from actual film-making as they can get.”