Kentucky Fried Chicken (Bermuda) Limited suffered poor sales following September 11 which led to decreased profits according to board chairman Donald Lines.

Announcing results, Mr. Lines said net income for the year ended 31st January 2002 amounted to $290,469 compared with $305,086 in the year ended 31st January 2001. Sales for the year were $257,456 or 7.2 percent higher than in the previous year.

However, Mr. Lines said: “The tragic events of September 11, 2001 affected our sales significantly, as consumer confidence weakened and tourist activity declined.

“Sales for the period to 31st August 2001 were up by 15.4 percent against those of the same period in the prior year.

“But for the period from September to the end of the financial year, sales were down by 3.1 percent compared to the same period in the prior year.”

Mr. Lines added: “The continued changes in our mix of product sales accompanied by modest increases in prices resulted in our gross margin increasing marginally to 73.8 percent from 73 percent in the prior period.

“In regard to operating expenses however, our biggest challenge continues to be salary and wage costs, which increased in the year by $161,296 to $1,213,754.”

On 28th February 2001 a dividend of 10 cents per share was paid to shareholders of record February 15, 2001.

And as a dividend of 20 cents per share in August 2001 was paid to shareholders of record 29th June 2001.

And this included a special dividend of 10 cents per share that was paid in recognition of the company's results at the time.

A further dividend of 10 cents per share was paid on 15th April 2002 to shareholders of record 5th April 2002. During the year, the company repurchased 16,931 of its own shares at an average price of $5, reducing shares outstanding to 598,000. Mr. Lines said: “It is our intention to continue to reduce the total shares outstanding, assuming the price at which shares are offered are acceptable to us.”

During the year a significant portion of kitchen equipment was replaced at a total cost of $157,363. Improvements to the office facilities and alarm system cost $64,202 and additional capital expenditure is anticipated in the creation of a staff training room in the space formerly occupied by office staff.

Mr. Lines paid tribute to staff, some of whom are leaving the restaurant, and said: “On behalf of the Board I would like to pay tribute to all our staff for their contribution to our earnings. In particular, I would like to thank Tracy Robinson, Doug Chase and Kevin Manuel for the results, which are a reflection of day-to-day management, staff training and sales success. I would also like to express our appreciation to Graham Redford (our marketing consultant) for his advice and assistance.”

General manager Kevin Manuel has announced that he is leaving the company at the end of June and Doug Chase, the operations manager, is also leaving the company to return to the US later this summer.

Mr. Frank Suess has been hired as the new general manager starting 1st June. Mr. Suess is the spouse of a Bermudian and is a Master Chef with extensive management experience both in Bermuda and internationally according to Mr. Lines.

Mr. Eugene Bell, a Bermudian, who joined the company in April as operating manager-designate gained experience in the fast food business while resident in the United States and will understudy Doug Chase until his departure this summer.

Mr. Lines said: “We look forward to the 2003 fiscal year with continued optimism and hope that the steps we continue to take to improve our competitive position and to generate increased sales and profits will be successful. We also hope to see renewed consumer confidence and increased economic activity in Bermuda that we hope to translate into an increase in profits in the 2003 fiscal year.

“In closing, I wish to thank my fellow Executive Directors, Crayton Greene, Susan Wilson and Bill Thomson for their contribution, knowledge and assistance during the past year,” said Mr. Lines.