"Consolidated earnings of the Company for the year ended 31st December 2000 amounted to just $106,904 compared with a loss of $181,921 in 1999 which was the first loss the Company had reported in over twenty-five years of operation.
Total assets of the group as at 31st December 2000 amounted to $5,162,163 including fixed assets of $2,735,728 compared with total assets of $5,087,025 and fixed assets of $2,462,050 a year ago. At 31st December the Company had cash and time deposits of $447,199 compared with $446,164 last year and shareholders equity has increased from $2,020,070 to $2,066,974.
Our consolidated results, which include BCS Agencies, Transact and Properties, for the first five months of this year to 31st May 2001 show a small profit of $33,473 compared with a budget of $22,720 and earnings of $65,245 at this time last year.
BCS Agencies Limited handles all of the IBM Agency business, excluding PCs and e-commerce and offers total system solutions to the market place with the assistance of IBM. It also offers the IBM iSeries, pSeries and servers which account for our hardware sales for the year to date. Net income of BCS Agencies in this year to 31st May 2001 amounted to $244,292, which is higher than our target for the year and net income of $189,823 generated in the same period last year.
Transact, our e-commerce subsidiary, has, as expected, reported a loss of $133,237 for this year to 31st May 2001, on revenues of $434,296 largely as a result of the cost of leased lines required to service existing customers.
It was at the Director's Meeting held in February 2000 we agreed to proceed with the development of Transact as a complete e-business service provider specializing in Internet services, application services and managed hosting services. Our business plan, prepared by Wyatt Sellyeh and delivered to us in December 1999, made it clear that investing in e-business would not guarantee profits in the fast-moving, e-commerce hosting and Internet space but, we could not sit by as the computer marketplace evolved. For example, selling "frame relay" through the IBM/IGN network is facing increased competition from new voice and data services, which provide secure communication over the Internet.
We believe we have a unique e-business service offering for both local and international companies in Bermuda. Our focus is to provide our customers with the very best state-of-the-art information technology solutions, and we have, without a doubt, the most sophisticated e-commerce hosting solution in Bermuda. This e-commerce hosting solution is also supported and managed by a highly trained staff who possess technology certifications from IBM, Cisco, Microsoft and Checkpoint.
This e-commerce hosting platform rivals the best hosting solutions found anywhere in the world. Large customers will feel confident that our e-commerce technology solution (on which their e-business depends) is of the highest quality and professionally managed. Smaller customers can take advantage of this high calibre solution via our shared hosting solution. There is no competing service in Bermuda that offers the same level of reliability, end to end management and security.
Revenue growth has been disappointing, notwithstanding our investment in this state-of-the-art facility and our access to highly qualified personnel. It is our belief that this is the experience of many of those involved in hosting - largely because the use of Bermuda as a base for international trade by large corporations is limited by the very high cost of international communications facilities.
The Board has decided that we will continue our investment in Transact until the end of September with the view to promoting these facilities in Bermuda. However, should a material increase in our revenue base not be achieved we will have to give further thought as to whether or not we can justify this long-term investment.
Last year shareholders were advised that until Transact-e-Biz.com became profitable or a decision is made to refinance the cost of development of this new business - the Directors decided it is prudent for the Company to conserve its resources and to forego the payment of dividends."
Donald P. Lines, OBE, FCA, JP
Chairman