Masters Ltd.?s net income rose 16.7 percent in the first half of the year, but it warned that slowing sales meant it was cautious about predicting full year results.

The company also warned that staff benefits also rose by an ?astounding? 9.2 percent for the six months to July 31, due to increases in payroll tax, company pension and health insurance costs.

For the period, net income rose $83,018 to $896,969 compared with $768,339 for the same six months in 2003. The improvement was atrributed to a one percentr increase in profit margins and better earnings an affiliate.

Gross sales were essentially flat, amounting to $5,290,771 as compared with $5,281,920 in the prior year.

Expenses rose 0.6 percent to $2,119,490 compared with $2,106,656 in 2003. The marginal increase came in spite of rises in payroll costs, where direct costs rose 3.8 percent and benefits an ?astounding? 9.2 percent higher than the prior year.

?We saw increases during the period in Payroll Tax of 0.75 percent, a further 25 percent on Company pension, and nine percent on health insurance. These will have full effect in the second half of the financial year, along with the August increase in Government Pension contributions.

Masters chief executive officer Susan Wilson said the company had also also seen completion of the new warehouse, and will be taking possession of the space in the immediate future.

She added: ?Whilst sales showed positive growth in the early part of the current year, there was a noticeable slowing in the second quarter. This is likely to continue into the third quarter when comparing current figures to those artificially inflated by the 2003 hurricane. We are therefore cautious about the very important Christmas selling season wherein the Company usually earns the most significant portion of its profits.?