The loss of a lucrative contract to produce Bermuda's telephone directory will set Island Press back but only in the short term, according to the company's president Randy French.

Mr. French said the company - which is the parent company of the Bermuda Sun newspaper - will in the long run be able to make up for the loss of the contract through increased Bermuda business and with its recently established Caribbean operations.

He said: "The loss of this contract (which was not renewed by the Bermuda Telephone Company after it decided to publish the directory in-house) will have a short-term negative effect on future profit but the company anticipates that in the longer term this loss will be offset by income from Caribbean operations together with on-going improvements in our newspaper and commercial print activities in Bermuda."

The company in recent months announced that through subsidiary companies it would be publishing 14 telephone directories in the Caribbean.

Mr. French's predictions on the company's future results were made after it revealed it had made a net profit of $566,885 for the six-month period ended March 31, 2002, in marked comparison to just over $52,000 in net profit for the same period last year.

The increase in profit levels followed an increase in the group's sales by nearly 7 percent at $5.1 million compared to nearly $4.8 million for the same period in 2001.

Mr. French attributed the increase in sales to "competitive pricing, creative marketing strategies and sound customer relations".

There was however an increase in the company's general and administrative costs which rose by 10.9 percent to $1.96 million over $1.77 million the previous period.