Bermuda First Investment Company Limited – Q2 2014 Results for six months ended December 31, 2013

Hamilton, Bermuda – 24 February, 2014 – Bermuda First Investment Company Limited (the "Company" or "BFIC"; Ticker: BFIC.BH), a BSX listed investment holding company which owns a number of significant investments in BSX Bermuda listed companies, is pleased to announce its results for the six months ended December 31, 2013.

Highlights:

•       Profit in the first half of the year of $0.8 million (before an unrealised loss on the Company’s investments of approximately $4.3 million);

•       Revenue in the period of $1.6 million;

•       Market value of investments as at September 30, 2013 of approximately $39.9 million; and

•       Recommended interim dividend of $0.20 per share.

Commenting on the financial results, J. Michael Collier, Chairman of BFIC said:

“During the quarter the Company did not materially add to its investments. The fall in market value of the portfolio and in particular in the price of Ascendant shares has negatively impacted the Company’s investment value but we remain well positioned to benefit from any improvement to the Bermuda economy and as such are pleased to declare an interim dividend of $0.20 a share.“

Financial summary

For the quarter ended December 31, 2013, the Company reported revenue of $0.8 million and profit of $0.4 million (before an unrealised loss on its investments of approximately $1.1 million, relating to the movement in the value of the Company’s investments between October 1, 2013 and December 31, 2013). Total expenses were $0.4 million with $0.3 million relating to accrued interest expense on the Company’s unsecured 2019 loan notes. The Company’s undiluted loss per share was $0.41.

For the six months ended December 31, 2013, the Company reported revenue of $1.6 million and profit of $0.8 million (prior to an unrealised loss on the Company’s investments of approximately $4.3 million).

As at December 31, 2013, the Company’s investments had a total value of $39.9 million. The Company had shareholders’ funds as at December 31, 2013 of $17.6 million, bank debt of $5.5 million and unsecured long term seven year loan notes that it issued to its founder shareholders in October 2012 of $17.1 million.

Interim Dividend

The Company’s Board is recommending an interim dividend payment of $0.20 a share (2013: $0.20 a share). The record date for the dividend will be March 14, 2014 and the payment date will be March 31, 2014. The Company’s Board approved a dividend reinvestment plan on June 3, 2013 and therefore shareholders may elect to receive dividends in cash or shares.

Investments

KeyTech Limited (“KeyTech”)

The Company is interested in approximately 30.1% of KeyTech’s issued share capital which as at December 31, 2013 was valued at approximately $25.7 million.

KeyTech reported its results for the six months ended 30 September 2013 in December 2013. Consolidated unaudited profit for the period was $5.0 million (2012: $6.8 million). The decrease was driven in part by an increase in the Government Revenue Tax and one time redundancy costs associated with the amalgamation of North Rock and the acquisition of TeleCayman. Revenue increased $3.3 million to $43 million (2012: $39.8 million), with $4.6 million due to revenue generated by the contribution of North Rock and TeleCayman. Local voice declined $0.2 million and directory revenue declined $0.5 million. Expenses increased by $5.7 million including a one time charge of $0.7 million in redundancies. CAPEX in the six months was $7.2 million (2012: $7.8 million) and earnings per share were $0.34 (2012: $0.47). In addition a dividend of $0.12 per share was declared for the quarter ended 31 December 2013.

It is clear that the KeyTech businesses continue to be affected by Bermuda’s macroeconomic situation and the increasing regulatory burden, as witnessed by the recent complaint by Logic to the Regulatory Authority that Digicel’s free internet for a year offer to all new, or recent, postpaid subscribers to mobile voice and data services was predatory and anti-competitive. The change in regulations with the issuance of Integrated Communications Operating Licence has caused carriers to slash internet prices by as much as 50%. This is obviously affecting Logic’s revenues given they control 80% of the market and have had to respond to maintain market share. However, we believe that KeyTech remains well positioned in a number of its businesses to benefit from an improving economy and future technological changes.

Ascendant Group Limited (“Ascendant”)

Ascendant has not yet reported its results for the year ended 31 December 2013 but we anticipate that they will be released in April / May 2014.

We would expect the results to show that the company’s performance continues to be affected by Bermuda’s economy. The key for Ascendant will be to see how far forward they have moved with their strategic plan and whether there is buy-in from the Bermuda Government, which will enable them to progress with their required investment.

BFIC is interested in approximately 10.4% of Ascendant’s issued share capital and as at December 31, 2013 it was valued at approximately $11.0 million.

Argus Group Holdings Limited (“Argus”)

Argus announced its results for the six months ended September 30, 2013 on December 1, 2013. They announced a net profit of $1.6 million compared to a net profit of $7.1 million in 2012. Core operations generated a profit of $7.5 million and shareholders’ equity increased to $96.1 million. Total assets remained constant at $1.9 billion and a dividend of 6 cents a share was declared. Net premiums earned in the period decreased by 7 per cent. compared with the previous year due to the continuing recession in Bermuda.

However, net benefits and claims decreased by 18 per cent. due to lower than anticipated claims in Bermuda and overseas We highlighted in the previous quarter announcement that the movement in the fixed income market would likely negatively affect Argus’ earnings. Argus reported an investment loss of $3.2 million in the first half of the year. However, with the recent increase in US Treasuries it is likely that the loss on the Argus investments may be reversed in the current period. It was important to see the core earnings remaining consistent due to high client retention levels.

The results while disappointing continue to highlight that Argus is recovering from its previous problems and we look forward to further progress in the current part of the year.

BFIC is interested in approximately 3.4% of Argus’ issued share capital and as at December 31, 2013 it was valued at approximately $3.0 million.

Other investments

The Company’s other investments include small holdings in The Bank of N.T Butterfield & Son Ltd (“Butterfield”), West Hamilton Holdings Limited, Bermuda Aviation Services Limited and Watlington Waterworks Limited.

We still do not believe that the Bermuda economy is improving at any great rate. Our investments continue to highlight the difficult conditions they face but there is a felling that the rate of decline has slowed and perhaps the economy will flatline in the short to medium term. There is definitely renewed interest in undertaking business in Bermuda and we hope that this will positively impact the performance of our investments.

Bermuda First Investment Company Limited is a Bermuda exempt investment holding company with significant investments in a number of BSX listed Bermuda companies. Its main investments are in KeyTech Limited and Ascendant Group Limited. The Company’s core strategy is to build strategic investments in local Bermudian companies. BFIC’s shares and loan notes are publicly traded and listed on the Bermuda Stock Exchange www.bsx.com  (Tickers: BFIC.BH and BFICN.BH).

Media Contacts:

Alasdair Younie

Director

Bermuda First Investment Company Limited

Tel: 441-299-2897

Email: ay@icm.bm