The Bermuda Press (Holdings) Limited Issues President And Directors' Report

Hamilton, Bermuda, March 2, 2006 -- The BSX has been advised of the text of the President and Directors' Report of Bermuda Press (Holdings) Limited as follows:

"The results of the Company's operations for the financial year ended 30th September 2005 reflect an improvement in the level of revenue, accompanied once again by increases in operating costs and taxes. Total revenue for the year was $32,662,000 compared with $31,361,000 last year. Net income this year was $2,452,000 compared with $3,420,000 for the previous year. Our net income this year is lower than in 2004, when the sale of The Bank of Bermuda Limited to HSBC Holdings plc produced a gain of $421,000 for the Company from the sale of its shares in the Bank. Total expenses rose by 6.4 percent this year without a corresponding increase in sales, which reflects our competitive operating environment.

Competition in our publishing, commercial printing, office supplies and equipment markets has intensified this year while payroll and administrative costs have increased. We endeavour to compete successfully by giving excellent value to our customers. Delivering quality products and service requires us to invest in people, technology and equipment. Our ultimate responsibility is to our shareholders, and I am pleased to note that we have increased our dividend this year to 75 cents from 68 cents last year.

Inflation in the United States' economy, which has been under control for some years, appears to be increasing. For companies, inflation, underpinned by high oil prices, eats away at profitability, just as it makes life harder for individuals. Substantial budget deficits, and an apparent lack of political will to face the consequences, may undermine the soundness of the U.S. economy.

Bermuda is heavily reliant on conditions in the United States, and we are therefore concerned about the possible effect of increasing costs on your Company. The implications for Bermuda are for higher interest rates and continued tightening in the credit markets. The new Chairman of the Unites States Federal Reserve has made plain his intention to continue to focus his energies on this growing long-term problem which, if left unchecked, will impact adversely upon the world's economy.

Bermuda has been undergoing an accelerating shift from the hospitality and retail industries The Bermuda Press (Holdings) Limited to financial services. The tourist-oriented sectors of the local economy have always been among the strongest supporters of our publications, both through circulation and advertising. The loss of Trimingham's and Smith's, Bermuda's two flagship stores and increasing over-seas shopping, much of it via the Internet, further affects Bermuda's retail sector. The impact of simultaneous weakness, temporary and structural, in both the hospitality and retail sectors of the local economy diminishes the size of our potential audience and of our advertising support. Counterbalancing this negative economic shift will be the gradual formation of smaller stores that will have a need to raise the profiles of their new goods and services in the Island through advertising.

Declines in the retail and hotel sectors have contributed to a continuing consolidation of local businesses that rely on these industries. We have played our part in this process with the acquisition of Engravers Limited. As well as its printing operations, we acquired a valuable prop-arty that will be useful for our Office Solutions and Stationery Store divisions. During the year we integrated the printing operations of Engravers with our own at The Bermuda Press Limited.

Competing with overseas printers and their lower cost base is extremely difficult. Import duty on equipment and spare parts, as well as the duty on fuel that is hidden in the cost of electricity, is our chief hurdle since it effectively subsidizes overseas competitors.

Bermuda is in danger of developing a two-tier economy, in which Bermudian firms and their employees are disadvantaged by the very Government whose purpose is to serve and protect them. Our hope is that Government will take action before an event, which seriously and adversely affects Bermudian businesses and their employees, forces Government to step for-ward when it is too late to make a meaningful difference.

There are already signs that the Bermudian economy, other than the international business sector, is slowing. Reports are that the construction industry is cooling. Increases in tourist arrivals are being achieved chiefly in the cruise ship sector, while the number of air arrivals, Bermuda's bread and butter, continues to fall. Meanwhile, the effects of Hurricane Katrina saw a dozen new major insurance companies formed in Bermuda late in 2005. While these companies produce some revenue for Government, they are most unlikely to employ the num-beer of Bermudians that once worked in tourism and retail. The long-term effect of this employment shift will have a significant effect on the Island's employment profile.

The prospects for your Company are by no means bleak, however, thanks in good measure to our ability to diversify our business into new areas, and to restructure our existing businesses to take account of prevailing economic conditions.

The Bermuda Press (Holdings) Limited Crown House, the Company's property at Par-la-Ville Road North, is now five years old. Built to bring a degree of stability to the Company's earnings and to further diversify the Company's sources of revenue, Crown House remains fully occupied, including an area on the ground floor that we retain for Company use. Colombia House, the home of the Stationery Store, is fully rented and provides regular income. The consistent flow of rental income has indeed contributed significantly to our earnings.

The Royal Gazette reaches more people than any other medium and has an important community role. An effective daily newspaper must report accurately, fairly, and without fear on the events of the day, as well as providing analysis and insight into current affairs and Bermuda's place in the global community. This is often a thankless task, and we are subject to criticism from all sides of the political spectrum. That is to be expected. The fourth estate, as newspapers and magazines are sometimes collectively known, must present the full range of views in which the interests of its readers are paramount. An independent poll conduct-ed in 2005 showed that 70 percent of those who read The Royal Gazette, who number 34,000 people, implicitly trust its findings, which is indicative of the respect that the news-paper has earned. The Mid-Ocean News, which we publish on a weekly basis, has become Bermuda's top investigative medium. Too little credit is given for its efforts.

The total number of pages published by The Royal Gazette and the Mid-Ocean News increased this year. The Royal Gazette produced its first 100-page regular edition just before Christmas 2005, which is no small achievement for a newspaper in a community of 65,000 people. The Gazette has been published without missing a scheduled day since 1828 and has always played its part in the changes that Bermuda has undergone. The newspaper is now sold in blue self-service boxes at a few locations selected so as not to disturb the aesthetics of our Island home.

When Belco experienced difficulties with the power supply to Hamilton at the height of last summer, our newspaper offices did not come fully online until 10 o'clock in the evening. Yet we were able to produce the Gazette the next day, which is a tribute to the staff. We must record our thanks to Belco for prioritising the Company as it brought power back to the City of Hamilton, recognising the importance of the newspaper to daily life.

Our website, www.theroyalgazette.com, continues to attract greater numbers of visitors, recording many thousand a day. The website is a complement to the newspapers, and allows Bermudians who are travelling, relatives abroad, students and the business community to keep in touch with local news and developments.

At Crown Communications, The Bottom Line, published six times a year, has consolidated its position as Bermuda's leading business publication having significant circulation in The Bermuda Press (Holdings) Limited Bermuda and internationally. The Insurance Journal, an annual publication highlighting the Island's insurance and reinsurance sector, published its second edition in November 2005, and was very well received. Its goal is to help the community to better understand the achievements of Bermuda's insurance industry. RG Magazine, also published six times a year, is in its 15th year of publication and remains Bermuda's most widely read general interest magazine.

The Bermuda Communications Directory, in a more convenient format this year, was distributed early in 2006 to all households in Bermuda. The Directory, now in its seventh edition, includes a broad array of local information and has earned plaudits from a wide cross-section of the community. Parts of the Directory continue to be published on the Internet at www.bermudadirectory.com.

Operations at The Bermuda Press Limited are continually under review by management to achieve efficiencies without losing effectiveness. Print Express has continued to perform well, serving sectors of the short-run, quick-turnaround printing business in Bermuda. The consolidation of Pronto Print into The Bermuda Press is complete with the production department in its new premises at Addendum Lane. The acquisition of Engravers Limited and its integration into our printing operations have produced encouraging results. We are better utilising our capacity in plant and equipment to become more competitive in all of our markets, opening opportunities for our combined sales staff.

The Company's office products and equipment divisions have also improved their performance in difficult market conditions. Office Solutions distributes Canon, Sharp and Oki Data office equipment in a dynamic, technology-driven market. Office Solutions and the Stationery Store both continue to lead their market sectors. Artcetera, which supplies Bermuda's art and creative communities as part of the Stationery Store, also improved its results this year.

As a listed issuer on the Bermuda Stock Exchange, the Company makes certain information public. We confirm that the total interests of all directors and officers of the Company in the shares of the Company amounted to 110,568 shares at 30th September 2005. We also con-firm that no rights to subscribe for shares in the Company have been granted to or exercised by any director or officer and that the Company has no service or consulting contracts with any of its directors. Finally, we confirm that there were no contracts of significance subsisting during or at the end of the financial year in which a director of the Company is or was materially interested, either directly or indirectly.

As has been the case for some years, the Company's shares continue to trade on the Bermuda Stock Exchange below their net book value of $19.62.

Before the end of the financial year, Peter N. Cooper, a director of the Company retired because he had reached the mandatory retirement age, and we wish to record our gratitude to him for his 41 years of service to the Company. We welcome Richard D. Spurling, who was appointed to the Board on 4th February 2005. Although it is not our normal practice to single out employees, we especially express appreciation to Lloyd Martin, our retiring Operations Manager, who drove the efforts to attain high printing standards in the newspapers and their on time publication. Following re-structuring, two Bermudians who previously reported to Mr. Martin have additional responsibilities. Jamie Cann now manages press and distribution and Hope Robbins is now managing pre-press and computer systems.

Your directors and management continue to pay close attention to the Company's operations, to protect and enhance your investment. With almost 200 full-time and 80 part-time employees, we are one of Bermuda's larger employers. We thank each and every one of our management and employees for their conscientious efforts. Thanks are also due to our customers and shareholders for their continued support.

2005 was celebrated as the 500th anniversary of the discovery of Bermuda. The Island has experienced both good and difficult times during those years and we are optimistic about the future if the community can find more ways to unite us than divide us, deal effectively with national issues that may lead to a lack of confidence, and build on the Island's reputation for integrity.

On behalf of the Directors of The Bermuda Press (Holdings) Limited:

W. Roger Davidson

President and Director"