Bermuda Press (Holdings) Ltd’s annual net profit fell to $1.21 million as an increase in revenue was eclipsed by rising operating expenses.

The company, which owns The Royal Gazette, as well as commercial printing, real-estate and retail interests, said its board had decided to raise the quarterly dividend by 40 per cent to 7 cents per share.

Net profit fell $54,000 from 2016, while basic earnings decreased to 54 cents per share from 58 cents.

Stephen Thomson, BPHL’s chairman, warned that “difficult decisions” would have to be made in loss-making parts of the group in the interests of shareholders.

BPHL said revenue for the year ended September 30, 2017 increased by 0.1 per cent from 2016 to $26.65 million.

Operating expenses rose by 0.5 per cent to $25.38 million, driven by staff changes, progressive payroll tax and an increase in health insurance premiums in March 2017.

The climb in expenses was limited by reductions to administrative costs and materials as a result of ongoing cost-cutting efforts and improved efficiencies, BPHL said.

The group’s real-estate segment was the most profitable part of the company, with an overall occupancy rate of 98 per cent in 2017, of which more than 57 per cent was occupied by third-party tenants. The real-estate holdings generated $3.12 million in revenue, up nearly $100,000 from 2016.

Revenue from the publishing and retail segment fell by about 0.3 per cent to $18.78 million, and from the commercial printing segment by 0.8 per cent to $4.53 million.

Payroll and employee benefits of $14.58 million — up by 3.3 per cent — made up more than 57 per cent of total operating expenses.

However, BPHL managed to trim materials and supplies expenses by 1.4 per cent to $4.78 million and administrative expenses by 3.8 per cent to $4.34 million.

Mr Thomson, BPHL’s chairman, said readership numbers for the print and online publications had never been higher in the company’s 190-year history.

“It’s certainly true to say the Digital Age has brought with it many challenges and difficulties for newspaper publishers,” Mr Thomson wrote in BPHL’s annual report.

“However, there have also been some new opportunities and new sources of readership and advertising revenues that we have been able to pursue precisely because our long-established reputation for high journalistic standards precedes us.”

The increased dividend payment of 7 cents per share translates to an annualised yield of 4.5 per cent at BPHL’s share price of $6.15 on the Bermuda Stock Exchange, as of yesterday. Mr Thomson said the company planned to take actions to improve rewards for shareholders.

“The completion of the 2018 budgets highlighted that difficult decisions have to be made in the operating companies that are loss-making, as the board will not continue to fund such operations at the expense of shareholders,” Mr Thomson said.

“During 2018 we will continue to review your company’s performance and the ability to further increase the dividend payments to shareholders.”

Mr Thomson added that Bermuda’s economic growth was primarily driven by increases in population and investment. Hence, BPHL welcomed the Bermuda Government’s plans to relax the 60:40 ownership rule for domestic companies and its consideration of immigration reform.

“Genuine reform in both areas would encourage long-term residents to remain on the island, boosting the size of the resident population and the workforce, as well as to invest in the local economy,” Mr Thomson said.

“Additionally, any such steps would inevitably boost confidence in the recently elected government on the part of Bermuda’s diminished business community.”

Highlights for BPHL during 2017 included the hiring of a new sales director with 20 years’ experience in digital and print media sales, the launch of a new RG Mags website to host online editions of RG magazine and other publications, world-class coverage of the America’s Cup, expanded print operation product offerings including sign printing, and adjusted staffing levels at the office supplies operation appropriate to market conditions.

BPHL is also undergoing a review and redesign of its eMoo website to improve functionality and monetisation opportunities, with a relaunch planned for the third quarter of this year.

The company’s Annual General Meeting is scheduled for 10:30am on March 23 at The Royal Gazette building, 2 Par-la-Ville Road, Hamilton.