(Bermuda) Ltd. is back. And they are aiming to wipe out their bank debt by the end of the fiscal year.

The firm said it is now in a healthy state and has re-established relations with the franchise's head office, Tricon International, after what was "a rather uneasy position, due to the precarious financial state of the company last year and an unacceptable decline'' in the required quality standards.

KFC Bermuda reported a modest profit of $69,439 in the year to January 31, 1998, despite the write off of $130,000 in closing the Burnaby Street location.

That compares favourably to the losses of more than $600,000 in the seven months to January 31, 1997 and losses of more than $414,000 and nearly $300,000 in the two prior years to June 30, 1996 and June 30, 1995, respectively.

The report noted that just over a year ago, "the company was in a precarious state and shareholders were advised on January 30, 1997 that had it not been for an advance of $100,000 provided by Lines Overseas Management Ltd. -- in anticipation of their agreement to an underwriting of a one for one rights issue of 321,000 shares at $3 per share to raise $964,863 in new capital -- it was highly likely that the company might find itself in liquidation''.

The firm had insufficient funds or credit lines to provide for immediate payroll costs or to meet overdue amounts due to its creditors.

KFC Bermuda has settled all significant outstanding debts and the payables are now current.

The firm said in a statement: "Bank indebtedness has been materially reduced during the past year from $1,034,000 to $670,000 and at the present time, there is more than $200,000 in the firm's bank account to meet ongoing obligations.'' President Crayton Greene and consultant Graham Redford were credited with trimming costs, improving staff relations and addressing "a long list of deficiencies in management and operating procedures.

"The benefits of these steps became very evident in the ensuing six month period where we generated profits of $164,000 to offset losses sustained in the first half of the year.

"It now appears, based on recent projections and monthly earnings reports, that we can expect the company to continue to generate profits in the future at least equal to the rate of earnings in the last six months.'' KFC Bermuda also said they have established procedures to generate timely management reports and monthly accounts to analyse individual expenses, sales, cost of goods and trends.

Last summer, KFC Bermuda's total service was rated at 44 percent which could have resulted in the loss of the franchise. By this January, they were up to 80.4 percent.

RESTAURANT EAT