yesterday reported its best results in four years, and a near doubling of last year's poor profits.

But the company also warned in its annual report that it is becoming increasingly difficult to compete with overseas publishers who are not required to pay Customs duties.

For the year to September 30, the company had net income of $1,228,855 or 85 cents a share, up 98 percent from $620,675 or 43 cents a share last year. The earnings came on revenues of $17,833,409, up 9.7 percent from $16,250,147 in 1993.

But total expenses rose $975,082 or 6.2 percent to $16,604,554, more than half from payroll and employee benefits which rose 7.2 percent. Materials, merchandise and supplies were up 9.4 percent to $4.9 million.

Bermuda Press (Holdings) president Mr. Roger Davidson said that the in the 167th year of publishing by The Royal Gazette Ltd., 14,850 pages were printed, up seven percent over 1993.

Turning to the cost of operations, he noted that North American suppliers of paper and newsprint were raising their prices after years of operating in a buyers' market.

"Consequently the increase in our material costs may exceed the low local rate of inflation.'' Mr. Davidson continued: "Once again the burden of customs duty will be borne by local printers, while much of the material printed abroad will still enter Bermuda duty-free, a situation which becomes increasingly difficult for others to defend.

"There have been some minor changes to the Customs tariff which have assisted the local printing industry. However, the burden of this taxation on capital expenditure and most operating supplies still blunts our competitive position with foreign printers.

"New challenges will arise as desktop publishing comes within the grasp of every computer user. We intend to involve ourselves with developments in electronic publishing, and invest in sound opportunities, as we move toward the year 2000.'' Mr. Davidson said that while the board of directors is aware of the need to improve return on investment, it is also aware of the need for investment in new technology and of the high cost of doing business in Bermuda.

After dividends were "prudently reduced during the recession'', Mr. Davidson noted that they were paid out at 38 cents a share this year, up two cents on 1993, and ten cents better than in 1992. But the dividends were nowhere near the 56 cents paid out in both 1990 and 1991.

He also reported that planned reductions in outstanding bank loans were accomplished and there was control maintained over receivables, resulting in a "favourable cash flow position''.

"Shareholders' equity per share increased from $10.68 to $11.11,'' he said.

"Our shares are currently trading below book value on the local exchange, where the share price is frequently affected by the dividends paid rather than the inherent value of the shares.'' On a broader note and looking to the future, Mr. Davidson mentioned pending labour negotiations for stevedores and hotel workers, and "the protracted public sector negotiations'', noting that they could affect the economy.

"It will take common sense, and a lot of community responsibility on the part of the respective parties, to balance narrow conflicting interests with correct decisions for the country,'' he said.

Apart from this newspaper, Bermuda Press (Holdings) Ltd. also owns Bermuda Press Ltd. and The Royal Gazette Ltd. subsidiaries The Mid Ocean News and The Royal Gazette Stationery Store.

Retained earnings at year's end were $6,589,310, up from $6,055,055 a year ago. Assets stood at $18,913,642 (up 0.41 percent), compared to liabilities of $2,633,386 (down 9.95 percent).