Tiger Aspect primed to have last laugh after the thin bottom line

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It should be a barrel of laughs at Tiger Aspect. The independent production company specialises in prime-time comedy, including shows featuring Harry Enfield, Gimme Gimme Gimme and The Thin Blue Line, the last of which starred Rowan Atkinson, who is a Tiger shareholder. But financially, the comedy is falling flat. Like many companies in the industry, Tiger is finding that there are few belly laughs on the bottom line.

The company is expected to report profits largely unchanged from the previous year's £391,000. This is despite a 31 per cent boost in sales to £50m, proving that it is not easy to make money in TV production.

Andrew Zein, Tiger's managing director, has the task of making ratings-grabbing programmes at the same time as keeping the bank manager happy. To achieve this balance, the company has had to slim down. "Like a lot of people, we looked at what the business was 18 months ago," he reports. "We had got into other areas. We had a distribution arm, some regional activity and a commercials production company, and we were finding it quite tough. So we've got back to what we're good at: getting the right producers and making what the channels want."

Tiger is one of the most prestigious of the "indies". Apart from its comedies, it produces dramas such as Murphy's Law, recently shown on on BBC1, and Teachers, soon to return to Channel 4. It is also behind the satirical series Double Take, which has a new series on BBC2 next year, and has made two films, Billy Elliot and Kevin & Perry Go Large. It has even gone into theatre, running the Madness musical Our House.

Tiger is one of the most often-used independent producers at the BBC, despite the Beeb's reputation a tough client. Its boss Greg Dyke once said that "it is not the BBC's job to make a large number of independent producers extremely rich", but Mr Zein claims that the overheads are being ignored. "[Broadcasters] have an issue with what they describe as profit, yet it's very hard to cover the costs of production because some of them are indirect: the infrastructure, having this office [in the heart of Soho], running the legal department and the accounts department."

However, help is at hand for Tiger Aspect and other independent producers in the shape of the Communications Bill. Currently being debated in the Lords, this will introduce a new code of conduct governing the way broadcasters treat indies.

As the vice-chairman for TV on the Producers Alliance for Cinema and Television, the industry body, Mr Zein has been involved in the negotiations on the new code. The broadcasters, he says, "have had the upper hand for a period of years. It's quite painful for anyone to be expected to alter their behaviour to the detriment of their current position."

It is the change in legislation that seems to have prompted the current flurry of interest in independent production companies. Investment bankers and private equity firms are perusing the sector, looking for targets to buy. Recently Chrysalis, the multimedia group, announced it was to sell its production company to a consortium including the ex-ITV executives Steve Morrison and David Liddiment.

In the boom days of the late 1990s, Mr Zein was getting calls every week from interested parties, and after a long slump, the interest is coming back. But although the company is in the market for a deal, Mr Zein and his chairman, Peter Bennett-Jones, will be choosy.

"We will always be interested if the right opportunity came along, but there's nothing on the horizon at the moment," says Mr Zein. "The right opportunity for us is something that would make the business stronger, with strong distribution, access to intellectual property, an appetite for commissioning programming, and incredible talent. There aren't many people who meet that criteria. We can ignore the financial buyers as far as we're concerned."