Paint manufacturer and supplier, Devonshire Industries Ltd., had record sales for the year to March 31, exceeding $3 million for the first time, on its way to a declared profit of $540,169, the first time in five years that net income exceeded half a million dollars.

Sales by subsidiary, Bermuda Paint Co. Ltd. improved 4.8 percent over the prior year, and, combined with higher investment income and lower operating expenses, net income was improved 20.8 percent.

The company paid out $371,450 in dividends for the year, but on Tuesday the board of directors approved an interim dividend of 50 cents a share.

President, Miles Outerbridge said yesterday, "We will look at it again later in the year, probably in the fall, to see how things are progressing and decide at that point what would be an appropriate final dividend.

"The company has been ticking along very soundly and steadily. We are very happy with the way it is going.'' Mr. Outerbridge explained to shareholders by letter this month that, with one exception, selling prices of the company's locally manufactured products have been maintained at March 1995 levels.

He also indicated that government has stepped in and speedily resolved an "inadvertent customs duty problem'' that had placed the company at a disadvantage, when compared to competitors who imported finished products. It was highlighted six months ago, when Mr. Outerbridge informed shareholders that under the harmonised Customs' Tariff, a Ministry of Finance decision had classified certain raw materials as `chemicals', which attracted a duty rate of 22.5 percent.

By contrast, the finished products imported by competitors was subject to just 15 percent duty, although they contained the `chemical' components. In April the company undertook a project to replace the roof of their manufacturing building at a cost of between $250,000 to $300,000. It will be financed out of current resources.

Mr. Outerbridge said, "The old structure, built with plywood and asbestos tiles, after 30 plus years, had reached the end of its economic service life.

Replacement of the entire roof structure was the only route to take.

"At the same time, we took the opportunity to change the roof profile to enhance the visual appearance. We have retained sufficient funds to accommodate cost of the project, with minimal impact on our sound financial footing.'' The company's annual charitable policy was continued with a $10,000-donation in financial or product contributions to local charities.

In celebration of the company's 40th anniversary, the company has arranged for a two year scholarship at the Bermuda College, which is to be made available to a full-time student with a sophomore standing and a GPA of at least 3.00 in the Associate of Science or the Associate in Arts & Science programmes.

The recipient will be offered employment with the company, for the period of the scholarship, during college vacations.

Devonshire Industries last traded on the Bermuda Stock Exchange at $11 a share.