Masters Ltd. make a profit of $476,130 in the fiscal year ended January 31.

The 40 cents a share profit is an improvement of 447 percent over last year's profit.

Masters renovated its retail operation on Dundonald St. W. this year at a cost of about $3 million. The amount included money spent on doubling the store's inventory.

President Susan Wilson said profits rebounded from last fiscal year due to a one time write off when the company got out of the automotive market. Masters swapped its automotive and marine divisions with Pearman Watlington & Co. Ltd.

for that company's appliance sales and services divisions.

And despite the renovations, profits reflected a heating up of the construction industry and tighter management control, she said.

The store's attempt to give local shoppers a "US shopping experience'' and a decision to take a lower profit margin also seemed to be working to increase sales volume, she said.

"There are preliminary indications we made a move in the right direction,'' Ms Wilson said.

But she added October, November and December were the critical months and only afterwards would management be able to tell if they had got the strategy right.

Master's profit was made on sales of $8.4 million and rental income of $593,416. The company owns the Masters Building on Reid St. which it rents out to companies such as jeweller HS & JE Crisson Ltd., Trends, Pink's Deli, Dicty Fashions Boutique, and Triangles Ltd. Rental income contributes about 50 percent of the company's net earnings.

"In view of the strain that has been placed on retail business in general, we have felt it prudent to keep our tenants' rental fees at existing levels,'' company chairman James A. Pearman stated in the annual report. "Any substantial increase in rental income in the near future is unlikely.'' The gross margin on retail sales increased by about 1.6 percent. Mr. Pearman stated the increase was low as the company "used promotions and lower pricing to attempt to combat the ever increasing competition of overseas shopping.'' Sales revenue increased by about four percent during the fiscal year ended January 31, while rental income increased by about 17 percent. Operating expenses excluding depreciation were about $3.1 million, a marginal decrease over last financial year. The company had net current assets of about $4 million, a decrease of about $1 million due to the expansion of its retail outlet.

Mr. Pearman stated there were "teething problems'' after the renovations to the retail outlet, including bringing in more goods to satisfy increased demand.

"Although we could have increased the immediate sales by heavy inventory acquisitions, we were not prepared to take unnecessary risks and are building our inventory investment on a conservative and demand generation basis,'' he stated.

Mr. Pearman expressed optimism that the company would finish the current financial year with "satisfactory sales results'' which will help make up for the lost sales incurred during the renovations. The store remained open through the renovations.