Bermuda Press Holdings, the owners of The Royal Gazette and the Stationery Store, have recorded an increase in profits of nearly 14 percent "against the odds".

Net income rose from $1.92 million in 2000 to $2.18 million in 2001, but expenses rose by nearly $2 million or 8 percent and its net income from operations fell by nearly 12 percent from $1.9 million to $1.7 million.

"Careful management and a successful strategy of diversification have resulted in the company recording a solid financial performance against the odds," said Roger Davidson, president and director of the printing and stationery business.

Total revenue increased to $28 million, primarily as a result of an extra $1.7 million from other sources of revenue, Mr. Davidson told shareholders in the director's annual report.

Net income from operations fell by $0.2 million to $1.7 million, its lowest level since 1998.

Mr. Davidson said that the company's profits had been kept up by diversification and said that a new building on Par-la-Ville Road, Crown House and Columbia House which are leased out, "had a stabilising influence on our earnings".

The company borrowed $10.5 million to build Crown House, which opened this year, and helped net the extra $1.7 million recorded by the company.

Revenue grew from $26.3 million in 2000 to $28.1 million in 2001. Publishing, which includes newspaper and magazine publishing brought in $14.7 million, up from $14.6 million the year before, an increase of nearly two percent.

Retail, includes stationery and office equipment, also brought in nearly 13 percent more revenues in 2001, $6.2 million, compared to $5.5 million the year before.

Commercial printing, however, dropped off, falling 14 percent from $6.0 million to $5.1 million. But "other" revenues, which are listed as property rentals and other investment activities, rose from $404,658 to $2.1 million.

The company currently has assets of $37.0 million, compared to $34.7 million a year ago.

In the report Mr. Davidson added: "We operate in related industries that work in an atmosphere of intense competition locally and internationally. Another constant we face is technological change and the growing importance and uses of telecommunications."

He pointed to the installation of new computers and telephone networks at the Royal Gazette offices on Par-la-Ville Road. He said: "The new systems have many advantages. They allow for greatly increased speed of production and will influence future costs."

He added: "The company's investment in new systems, including the cost of staff training, new digital cameras for our photographers and a new telephone system will position us well for the future."

The report also added that the number of pages produced by The Royal Gazette and the Mid Ocean News were up on the year before and Mr. Davidson pointed to the introduction of regular colour on the front page of the daily as furthering the appeal to readers.

He also noted the printing contract for the Miami Herald which is printed on the day out of the Par-la-Ville printing press, stating it is the first foreign newspaper to be printed in Bermuda.

He added: "Our success with The Miami Herald is strong evidence of the company's capabilities in an increasingly global world."

He also announced a new web site would be up and running for the newspaper this winter and said that the magazines Bottom Line and RG will now be produced six times a year each.