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BAS Report From Management For The First Six Months Of Fiscal 2008
Hamilton, Bermuda, November 15, 2007 - "Despite a drop in earnings, we consider the performance for the first six months acceptable. Operating earnings for the period fell 3.5% or $81 thousand to $2.2 million as higher cost of goods and operating expenses bit into our profits. Net income for the period was off 16% to $2.0 million. Some erosion was expected as we incurred interest expense on the procurement of CCS Ltd., and
added resources to support our growth. Results were further impacted as we experienced a decline in freight and package handling in ASB and IBC Ltd., and
significant increases in labor across the group. With additional contribution from CCS Ltd. and Otis Bermuda Ltd., revenues were ahead 52%.
Income from operations in ASB Ltd. showed little change from last year despite a rise in total revenue of 5%. BAS-Serco experienced a decline in earnings for the period as major projects in one of their contracts came to a close and the impact of the loss of Fire Fighting Unit was felt.
Whilst our ZipX products remain robust, IBC continues to feel the pressure of increased cost in the carriage, and a drop in package delivery volumes. Weir Enterprise Ltd.
had an excellent six months despite an increase in the costs of goods which are mainly GBP denominated. These increases were offset by higher sales volumes. Management is extremely pleased with the performance of Otis and CCS Ltd.
In early October, after an unsolicited bid, BAS sold off Crow Lane Bakery Ltd., divesting itself of the sole remaining food entity. Whilst Crow Lane Ltd. continued to perform well, it was felt by management and the board that our efforts would be better served if we could concentrate on our service companies which are more synergistic. The company is expected to take a write down of more than ½ million dollars as a result in the latter half of this year. Whilst we expect the results of the second half of this year to be positive, they are unlikely to meet those of fiscal 2007."
Eugene Bean
Group President