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Bermuda Bakery Issues Chairman's Report
Consolidated results for the year 2002 for the Bermuda Bakery Ltd. and its subsidiary reflect a decrease in net income over year 2001. The 17.9% decrease to $454,395 reflects a downturn in the sales of bakery products.
Earnings per share dropped correspondingly to $1.59 from $1.94 in 2001. Increased net assets reflect the modernization of the Belvedere building electrical system and installation of Bakery process equipment and facilities.
The Belvedere office building continues at full occupancy with excellent long-term tenants. Continuing leasehold improvements coupled with a substantial upgrade in the building infrastructure makes the Belvedere building one of the prime office locations in the city. Construction is underway on the complete replacement and upgrading of the air conditioning system to improve both the comfort control and environmental quality in the building.
The Bakery division continues to face serious competition from a growing number of small, bread baking operations. At the same time a weak tourism and hospitality market has resulted in relatively flat sales of bread and roll products. Management is tackling these significant challenges to the Bakery's traditional market share with new products, marketing initiatives and improving operational efficiencies.
I am pleased to report that all capital expenditures and expenses have been funded from current earnings and the Bakery continues to operate without debt. Dividends paid last year amounted to $276,681 or $0.97 per share. Trading in Bermuda Bakery shares on the Bermuda Stock Exchange was modest and in the range of $23.50 to $35.00
As we begin our 80th year of operation the challenge is to retain those strengths and characteristics which have sustained us over the years while changing to meet the needs of our clients and the community we serve. I wish to thank the directors, management and staff for their dedication and support throughout the past year.
James A. Pearman,
Chairman and President
The Company achieved the following results for the financial year ended 31 December 2002: Revenue was $5,562,583 in 2002 down from $5,726,786 in 2001; Net Earnings were $454,395 in 2002 down from $553,678 in 2001; Net Earnings per share were $1.59 in 2002 versus $1.94 in 2001; Shareholders' Equity per share increased to $22.18 in 2002 from $21.58 in 2001.