No-one knows what caused the fire that burned down the famous 007 Stage at Pinewood Studios in July 2006, but its rapid rebuilding symbolises the upturn in fortunes at Pinewood Shepperton.

The $15.7m (£8m) new stage was finished in March. Now, even before an official launch, the 007 stage is back in business, with facilities including a drive-in ramp and improved lighting infrastructure. The Abba-themed musical Mamma Mia!, co-starring ex-007 Pierce Brosnan, is slated to shoot at the facility in summer 2007.

Ivan Dunleavy, Pinewood Shepperton's chief executive since 2000, says: 'It's nearly 60,000 square-feet of stage. It's significantly bigger in terms of usable space than the much-loved previous 007 stage. As people experience it, they'll see how much we have improved it operationally.'

When he presented Pinewood Shepperton's preliminary 2006 figures in late March, Dunleavy was striking a very bullish note. After a disappointing 2005 during which the studio was obliged to issue a profit warning, 2006 pre-tax profits were $14.2m (£7.2m) - up from $1.1m (£571,000) in 2005 - with turnover up 22% at $9.2m (£4.7m).

Hollywood wary about coming to the UK
Nonetheless, the studio business is notoriously cyclical. The strong pound, the increasing competition from studios abroad, and the untested new UK film tax relief are making Hollywood wary about setting up shop in the UK. At least one big project that looked UK-bound, Universal's Wanted, has gone to Eastern Europe.

In terms of Hollywood production in the UK, 2007 is not likely to match up to 2006, when Pinewood and Shepperton played host to such titles as Atonement, Casino Royale, Children Of Men, Stardust, The Bourne Ultimatum, His Dark Materials: The Golden Compass, and United 93.

Given the volatility of the market, it is understandable that Dunleavy places so much emphasis on building up the infrastructure at The Pinewood Studios Group (including Pinewood, Shepperton and Teddington). 'Our investors and our business plan are there for the long term,' he insists.

To that end, the expansion of Shepperton continues thanks to backing from Pinewood's joint venture partner, Morley Fund Management. The companies formed a partnership in September 2006 to fund the expansion of Pinewood and Shepperton. The plans will improve technologies on offer and nearly double the square-footage at Shepperton.

As a policy, Dunleavy does not discuss individual productions shooting at The Pinewood Studios Group. Nonetheless, he insists the new UK tax credits 'bode well for the longer term' and states, a little blandly, that he expects 'a number of good-profile films to be attracted to the UK in the future'.

Ask him about the 22nd Bond film and he is even more discreet. Studio sources suggest Bond's producers (including Pinewood-based Eon) have pencilled in some Pinewood stages for the next movie, which Dunleavy will not confirm. Given the symbolic value of Bond to the UK film industry, it will be a blow if producers decamp to studios abroad as they did with some of Casino Royale.

Nonetheless, Dunleavy insists prospects at Pinewood Shepperton are rosy. 'Underlying demand for content continues to rise, whether it is for film or television,' he declares.