Bermuda Aviation Services on Friday said operating profits for the first six months of the year jumped 35 percent to $1.5 million as all the company's units recorded improved performances.

Net income rose by four percent to $1.1 million after the company took a “significant charge” after exiting the airline catering business in June.

The company said revenue increased by $1 million or 13 percent while expenses rose by only $600,000.

“Despite $262,000 of assets being written off and $274,000 of redundancy costs, both in relation to the closure of the catering division, net earnings were ahead four percent to $1.1 million,” co-chairmen Michael Darling and Richard Pearman said in a statement.

BAS embarked on a diversification programme several years ago as it appeared that revenues from its core aircraft services and airline catering businesses were declining.

This included buying Crow Lane Bakery and car parts business Weir Enterprises and, most recently, getting out of the catering business.

The moves appear to be paying off as BAS said Crown Lane sales improved two percent and the performance of Weir Enterprises “surpassed that of 2003”.

But the company warned that significant increases in the cost of goods - especially from the UK and Europe where the US dollar is weak - tempered income.

“An increase in flight activity during the summer period pushed both revenue and earnings in Aircraft Services Bermuda Ltd. (ASB) ahead of the same period a year ago,” Mr. Pearman and Mr. Darling said.

But they added: “The performance for the full year in this company is not expected to be as robust as flight activity will be significantly lower going forward.”

BAS also said income from BAS-Serco, which provides airport services and has also expanded into commercial facilities management, is set to surpass that of 2003.

“We can report that Argus Ltd has recently appointed the company as facility manager for their properties. This additional contract will assist in improving full year earnings,” the co-chairmen said.

“BAS has recently completed negotiations to acquire additional shares from our joint venture partner, Serco Management Services Ltd., increasing our majority ownership in BAS-Serco effective December 1, 2004.

“A good performance with excellent results should be the aim of any company. What might be considered routine could only have been achieved through the efforts of so many in our company. We take this opportunity to congratulate all our managers and staff for their dedication and great effort, without which we would not have results like these.”