Devonshire industries, the owner of Bermuda Paint, last week revealed that profits were down 22 percent for 2003, after the war in Iraq and a weakened economy hit sales, management said.

Net income was reported at $328,743, down from a year earlier when it was $421,888.

In a letter to shareholders president Miles Outerbridge revealed sales were down to $2.6 million or $182,888 from the prior year when the figure stood at $2.8 million.

Mr. Outerbridge said: "The events to and during the US war on Iraq have impacted, to some degree, our sales for the last few months of the financial year.

"This factor, coupled with the rise in crude oil affected the cost of the raw materials.

"There were a few marginal increases to recover these expenses."

Mr. Outerbridge also said net income was down by $93,145 due to a combination of not running the annual spring sale, lower interest rates on the time deposits and a weakening economy.

Cash deposits for the year were down $126,000 or 9.6 percent, due in part to an increase in plant and equipment purchases, decrease in account receivables and inventories.

The company said it had appointed former general manager John Carey to the board of directors and the finance committee in mid-November of last year.

Mr. Outerbridge said: "We look forward to the use of his knowledge in the paint business and his support to (general manager) Mr. Richard Moulder in the continual growth of the business."

Operating expenses were $893,735 in 2003, compared to $885,283 a year earlier.

Net income from discounted operations was $244,193, down 21 percent compared to 2002, when the figure was $310,334.

Other income was also down, from $111,554 a year ago to $84,550 this year.

Cash flow fell dramatically by 45.7 percent from $573,891 a year ago to $311,693 this year.

Earnings per share were 75 cents in 2003, down 23 percent from 97 cents a year earlier.

Total assets were recorded at $3.3 million a year ago, and this year were down slightly by 5.44 percent at $$3.1 million.

Net assets were down 3.25 percent from $3.1 million to $3.0 million.

Book value per share stood at $6.82, down 3.5 percent from last year when it was $7.06.