company's fortunes The Long Botham Boats Co. Ltd. which owns Henry VIII Restaurant & Pub in Southampton, lost $110,519 for the financial year ended June 30, about the same as the previous year.

However president Andrew Allan forecast that after two years in the red the company is about to return to profitability after making "aggressive reductions in costs'' of about $200,000.

Cuts were made in salaries, including Mr. Allan's, and in advertising expenditure. The company has also restructured its debt to the Bank of N.T.

Butterfield and Son by increasing the mortgage to $1.65 million from $1.2 million and reducing the overdraft by $404,304. The company also cut staff to 30 members from 40.

The company, which is publicly listed on the Bermuda Stock Exchange, will repay the new mortgage over a 15-year term, resulting in a net annual cash saving of about $96,000.

In the notes to the financial statements the auditors noted: "The Company's status as a going concern depends upon the continuing support of its bankers.'' The company also has a total outstanding advance to Mr. Allan of $236,312 at June 30, up from $143,761 in 1996. The company has also provided a guarantee to a remaining loan of $140,000 which Mr. Allan has with the bank.

The original loan of $750,000 was made in 1991 to cover Mr. Allan's debts due to the failure of the Golden Hind.

Mr. Allan blamed the company's losses to declining tourism arrivals. While sales revenue fell $260,000 to $3.83 million during the financial year to June 30, there has been a rebound he said.

"The deficit has once again been the result of the continued decline in tourist arrivals which Bermuda has suffered over the past three years,'' he said. "There is evidence now, at least in the case of our business, that the decline has at last bottomed out and we can cautiously suggest that a reversal has occurred. For the period between the year end and 31 October 1997 restaurant sales have shown a five percent increase over the same period in the previous year.'' Mr. Allan said Bermuda's push to bring tourists back to the Island and the "prospect of lower airfares'' would help ensure the trend will continue into next year and beyond.

"We are over the worst bit,'' Mr. Allan said in an interview. "We are looking for a reasonable season rolling into profitability.'' In addition to owing the restaurant and bar, the company operates a nearby liquor store, and has lease until the end of 1998 to operate the Horseshoe Bay Beach Concession.

Long Botham Boats last traded at $2.50 on April 17.

OPTIMISTIC OF TURNAROUND -- Andrew Allan