321 million ($494.3 million) pretax loss for the year to September 30 as major contracts lost money and the company took reorganisation charges.

Shares in the UK property, construction and shipping company fell as much as 13 percent on Friday as losses were swelled by 204 million in one-time charges.

"Losses of this magnitude are primarily a legacy of inadequate leadership, lack of control and weak financial disciplines,'' the company said.

The company owns the Cunard passenger shipping fleet and the Queen Elizabeth 2 , the cruise liner at the centre of recriminations and legal action after a trip last December, when passengers said the ship was littered with building material.

Trafalgar made a 45.6 million pretax profit in fiscal 1994, after a loss of 347 million in 1993.

Analysts' expectations ranged from a loss of 93.5 million to one of 200 million. The shares were recently down 2 pence at 24.5p, having gone as low as 23. They hit a 52-week low of 18.5p on October 18. A year ago the stock was at 76.5p.

Trafalgar said it is reorganising its loss-making power engineering and Cunard units, and promised a brighter, more tightly run company in the future.

Trafalgar appointed Nigel Rich as chief executive with a brief to reorganise the company in August, 1994. He was formerly a director of Bermuda-based Hongkong Land Holdings Ltd., which has a 25.6 percent stake in Trafalgar.

Analysts say Rich devoted some months of his term to a failed bid for Northern Electric Plc, a regional electricity distributor, and has only begun to get to grips with Trafalgar's problems in recent months.

"I think we are probably somewhere near the nadir,'' said Leslie Kent, an analyst at MeesPierson. "But we'll have to wait until around December 1997 before you see profits coming out of Trafalgar House.'' Operating losses before exceptional items were 108 million, compared with an 80 million profit last year.

Power engineering contracts made in the early 1990s by Davy International, which makes equipment for the metals and mining industry, and France-based engineering and construction unit Sofresid, accounted for more than 90 million, the company said.

"Their numbers are slightly worse than the most pessimistic expectations,'' said Zafar Khan, at SGST Securities. "They can't pay any dividends in the foreseeable future.'' Trafalgar's distributable reserves, out of which dividends are paid, are 92.4 million in the red. Analysts said the company is intending to sell its US housebuilding unit which may garner 100 million pounds.

Khan described Trafalgar's stated aim to move progressively towards nil net debt as unrealistic in the short term. "It's the sort of thing you'd like Santa to bring, but he's not going to.'' He is predicting that by the end of the first half of next year, Trafalgar's net debt will be 373 million, and its debt-to- equity ratio will be 110 percent.