West Hamilton Holdings Ltd. saw its profits drop by $2,273 for the six months to September 30, 2009, while revenue was down marginally from 2008 to $708,648.

In the interim report to shareholders over this period, which was approved at a board meeting held on Thursday, company president David White said the decrease in revenue compared to the year prior was due to discounted rent to certain tenants most affected by the disruption of their business during the excavation of the construction site at Belvedere Place.

In preparation for the development of the Bakery site, he said, all non-Belvedere tenants had been given notice of the termination of their leases and demolition of the site started in January 2008.

Operating income for the period fell by $20,858 to $175,604 relative to fiscal year 2008, mainly as a result of the reduction in space available to rent, which was offset partly by the containment of operating expenses.

Earnings per share were nine cents for the period as compared to 10 cents per share last year.

Dividends paid in prior years were suspended while the development of the Belvedere site was in progress and will continue to be so over the next three fiscal years as a condition of a loan agreement with Butterfield Bank.

Shares of the company traded thinly on the Shares of the company traded thinly on the Bermuda Stock Exchange (BSX), with only a modest amount of shares changing hands, achieving a median price of $11 per share during the year as quoted on the BSX.

Mr. White said that shareholders had approved the construction of the first phase of the development of the Belvedere site, which includes the demolition of the old buildings, with the underground infrastructure for the entire complex including 270 parking bays.

"The construction of the parking bays is moving ahead according to plan, however the construction of the new building is contingent upon the attainment of certain triggers set by our bankers and at this time those triggers have not been met," he said.

"The market for office space is under constant review by management and the outlook in the short term is anticipated to be pressured with higher vacancy rates and additional space being released in the market. Under these circumstances, the triggers established by the bank will be difficult to achieve and the construction works will be managed accordingly."

Mr. White said that during the negotiation with Butterfield Bank for a loan to finance the construction of the development plan, an overdraft for $3.1 million was used as a temporary facility to fund the progress of construction works. In February, a construction loan for $15 million was approved by the bank for a period of two years.

"The first phase of the development is expected to be completed in the spring of 2010 and at that time the construction loan will be converted into a 15 years term loan with similar terms and conditions," he said.

"During first six months of fiscal 2009, the company used operating cash to fund some of the development costs and those amounts were charged directly to income.

The directors have agreed to continue to charge certain costs not associated with ongoing operations to income which will have the effect of distorting some comparative reporting of the operations of the company in future years."