operations has helped boost net income by 51 percent.

The company yesterday declared net income of $1.5 million or $1.42 a share for the year to March 31, 1999 compared to $992,278 in the previous financial year.

In his report to shareholders company chairman Neville Conyers noted the 51 percent increase was on top of the 74 percent gain in the previous financial year and marked the third consecutive year of earnings growth.

The company had revenues for the year of $14.64 million, a gain of 11 percent over the previous financial year. Expenses were up nine percent to $12.99 million.

Although the bar and restaurant division had what was described as a significant operating shortfall, other divisions showed increased revenues.

Aircraft Services Bermuda Ltd. and Crow Lane Bakery Ltd. had a combined 16 percent increase in revenue. The fleet maintenance garage had an operating profit for the first time ever according to Mr. Conyers.

He added the company had recently made a significant investment in the bar and restaurant division and was now attempting to cut losses in the division.

"The poor performance can be attributed directly to the shortfall in passenger traffic,'' he reported. "As a result, the short term outlook for this area is not seen as particularly bright. Steps are however being taken to minimise the losses.'' Mr. Conyers attributed the company's growth to decisions taken in 1994 when directors saw that declining tourism arrivals were leading to significant losses in revenue.

"Since then BAS has transformed itself from an entity whose sole focus was the provision of aviation support service into a diversified local company that has added bakery and food production, retail and outsourcing to its portfolio,'' he stated.

Last year about 78 percent of the sales were derived from aviation related services.

"During this period we also reduced management layers,'' Mr. Conyers stated.

Since 1994 net income has tripled from $491,000 while sales for the period have increased 13 percent. Meanwhile due to the fall off in catering services for aircraft the company's summer employment base has fallen from about 400 to the current 180.

Mr. Conyers sounded a note of warning to shareholders, noting that tourism arrivals and stays at hotels continue to fall, having a significant effect on sales.

Lower cargo volumes are also leading to falling income in the company's cargo terminal operations.

"And as expected, it has caused the carriers to take a hard look at their Bermuda operations,'' he said. "To adjust to the lesser demand we are seeing yearly schedules being shortened by some and the equipment used downsized by others.'' Despite the difficulties ahead Mr. Conyers remained positive about the company's future growth.

"It is the nature of the business and doesn't in any way alter my positive outlook for the company,'' he stated. "These challenges are the very reason why we refocussed on how we were going to operate BAS.'' He noted that the company is continuing to expand with the recent acquisition of the Marketplace bakery operations, and plans for opening a second retail outlet for Crow Lane Bakery at the western end of Front Street later this year.