In our letter to Shareholders following the Annual General Meeting on 19th June 2001 we reported that in the first three months of this fiscal year sales were ahead of last year by some 20% and our gross profit was up by about 23%. We are pleased to report that in the first six months of this year sales are still ahead of last year by about 17% and our gross profit is up by 19%. The increase in sales continues to be mainly as a result of continued changes in our mix of product sales and a more aggressive marketing program.
Earnings for the first six months ended 31st July 2001 amounted to $204,235 compared to $148,936 in the first half of last year, an increase of 37%. The increase in earnings is mainly due to higher sales and a reduction in certain operating costs. Despite continuing upward pressure from costs and particularly employment costs, we hope this level of earnings will be maintained for the remainder of the year. Notwithstanding this hope, we are very concerned by the probable effects of the 'attack on America' and the tragic consequences of these attacks in New York and Washington. These events have undoubtedly further weakened consumer confidence at a time when there are signs of a synchronized slowdown in global economic activity. This in turn suggests tourist and international business activity will decline, negatively affecting everyone in Bermuda.
On 28th February 2001 we paid a dividend of $0.10 per share to shareholders of record 15 February 2001. In recognition of the healthy level of earnings achieved in the first half of this fiscal year, an extra dividend of $0.10 per share was paid on August 1, 2001 in addition to the regular semi-annual dividend of $0.10 per share which was payable to shareholders of record 30th June 2001.
In our Annual Report to Shareholders issued in April, we stated that it was our intention to continue to buy in shares of the Company for cancellation with the view to reducing the shares outstanding to a more acceptable level, to the extent we have surplus funds available. During the year ended 31st January 2001, the Company purchased 50,576 of its own shares, reducing shares outstanding to 614,931. Since the end of the last fiscal year, we have purchased a further 16,931 shares reducing the shares outstanding to 598,000 as at 31st August 2001.
Notwithstanding the purchase of shares for cancellation, the Company is in a very comfortable cash position. At 31st July 2001 our cash resources amounted to $630,830 and our payables were $273,893. It should be noted however that some fairly major repairs and improvements to the facilities will have to be carried out later this year. Such repair work includes the refurbishment of the dining area, improvement of the layout in order to facilitate efficient service and upgrade of the office facilities.
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For more information, contact Joanne DeRoza at the Bermuda Stock Exchange at phone 441-292-7212. Information is also available at www.bsx.com, on Bloomberg at BSX
The Bermuda Stock Exchange is a fully-electronic offshore securities market founded in 1971. The BSX lists more than 300 securities -- including equities, mutual funds and bonds, as well as depository receipts -- and is a full member of the F.I.B.V. (International Federation of Stock Exchanges) as well as being recognized by the U.S. SEC.