Bermuda Press Holdings Ltd. on Friday reported net income of almost $1.2 million for the six-month period ended March 31.

The figure represented a increase of 6.7 percent compared to the same period last year, when The Royal Gazette's parent company made $1.12m.

An increase in revenue for the period of some $210,000 was offset by increasing operating costs — described as the company's "key challenge" by president Roger Davidson.

"The current focus is on the cost for employee benefits and remuneration related to productivity," Mr. Davidson stated in BPH's interim report to shareholders, filed with the Bermuda Stock Exchange on Friday.

"Immigration controls such as the long term limit policy have intensified competition in the already competitive local and foreign job markets. This together with locally generated inflation continues to push up wage expectations of local and foreign employees."

BPH employs almost 200 full-time and 80 part-time staff and owns Crown House Properties, the Bermuda Press, Office Solutions, Pronto Print, Engravers Ltd., Chameleon Print Express, Bermuda Directories and The Stationery Store, as well as The Royal Gazette and its sister paper the Mid-Ocean News.

Mr. Davidson said the newspaper division had managed to keep up sales levels of the printed version of the paper, while expanding its online exposure.

"User statistics for www.theroyalgazette.com have shown very strong growth while sales of our full electronic newspaper edition on www.newsstand.com are steadily improving at home and overseas," Mr. Davidson said. "The company has maintained the readership in the printed newspaper while developing non-traditional opportunities."

An improved training programme for journalists, designed to ensure that Bermudian editorial staff have the opportunity to be qualified up to internationally recognised standards has been implemented.

"This requires a considerable time and cost commitment, but the company believes it will improve recruitment and retention of Bermudian journalists in the long term," Mr. Davidson said.

BPH saw improved sales across all divisions, as revenue climbed to $16.01 million, compared to $15.8 million in the same period in 2006.

The report said the combining of the BPH's Pronto Print, Chameleon and Print Express divisions had positioned the company well for the growth in demand for digital printing. And the merger of Engravers Ltd. within the commercial print division has improved the utilisation of equipment and staff.

New information systems for job costing, online order entry, invoicing and production will be implemented in various divisions during the third and fourth quarters.

"The first six months has seen a strong environment for office equipment sales," Mr. Davidson added. "Growth in the international business sector continues to be positive and is expected to have a continued influence through the end of the year."

The report added that dividends should continue to be paid quarterly at the current rate of 19 cents per share.