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Masters Limited Releases Interim Report
Hamilton, Bermuda: 26th October 2005 - The Directors of Masters Limited have today released the half-year financial results for the Company for the six months ended July 31st, 2005.
Net income for the period amounted to $1,008,409 compared with $896,969 for the same six months for the previous financial period; an increase in the amount of $111,440 (12.4%). The increase in earnings arose from an 11% improvement in sales from the retail division, offset by a small reduction in gross margin. This was despite loosing three days sales during the July power failure.
Sales improved by 11% in the period to July 31st, 2005 amounting to $5,865,210 as compared with $5,290,771 in the prior year. We saw especially good results from the appliances, housewares, electrical, and bedding departments. Gross margin on sales for the same period amounted to $2,554,177 in 2005 as compared with $2,332,745 in 2004; an increase of $221,432 (9.5%).
Expenses in the first half of the current financial period totaled $2,218,792 compared with $2,119,490 for the same period last year, a 4.7% increase. The largest increase came from payroll, where direct costs rose 7.6% and benefits 8.8% over the prior year. There was also an increase in depreciation costs which related to the new Warehouse, and related equipment.
Allowing for the increased spring dividend ($0.40 per common share) of $535,825 cash balances increased by $1,045,871 reflecting the positive trading environment, and a $1,000,000 dividend from our affiliate.
The long term lease on the "Walkway" floor of the Masters Building at 22 Reid Street, terminated at the end of the period under review. We have negotiated new rental agreements with the existing tenants, and working with suppliers to effect an orderly transfer of management for the property. We are expecting the benefits, of increased rentals, and cash flow to accrue to the company from the second half of the current year.
As reported sales showed positive growth through out the period, with the second quarter being especially strong. Improvements can be attributed to improved material handling as a result of the new warehouse construction, and focused buying on areas where we have seen opportunities develop in the local market. Results to date have continued this trend, leading us to be cautiously optimistic for the year, though as we always warn shareholders, we still have ahead the important Christmas selling season wherein the Company usually earns the most significant portion of its profits.
Signed by:
Susan D. Wilson, C.A., JP
President and Chief Executive Officer