The results for the year ended 31st March 2004 show turnover for the Group has increased by some 37% on the previous year and losses before tax have been reduced to £1,235,062 (2003: £2,658,610). This has largely been achieved through the strategies put in place by the Group, and the Directors believe that this positive trend will continue. These results have also been adversely affected by substantial exchange losses.

Ship repairing & Engineering

For the year under review, sales for the ship repairing and engineering division has seen a marked increase on previous years. For the current year, the ship repairing sales and forward order book are not encouraging but the engineering division continues to show signs of growth.
In April 2004, we acquired the Midway Group, from the Receiver. Midway is a light precision engineering group based in Caerphilly. This purchase has strengthened our existing market position, with increased CNC machining capacity, increased sales and an expanded client base.
Your electrical division has strengthened its management and workforce, which has resulted in increased sales and overheads for the year under review. We have seen a noticeable increase in sales at the beginning of the current year and the continued growth is expected.

Travel & Leisure

Bay Travel has maintained a breakeven situation but, with reduced commissions and the internet affecting sales, we are looking for different avenues that will allow your Company to maintain its position within the market place.
Your hotel in Malta has had a profitable year. We have extended our main summer contract for a further 5 years and discussions are being held for long term winter and shoulder month accommodation contracts. Malta’s profile has increased with entry to the EU, which will hopefully lead to the upgrading of the tourist infrastructure and, consequentially, the opening up of new markets.
Tanzania has seen an increase in tourist arrivals but the local currency has devalued, which is reflected within the accounts. Redevelopment of the safari camps is nearly complete and immediate benefits are being seen. The Oyster Bay Hotel shops are maintaining high occupancy and we hope the redevelopment of the hotel will start shortly.
The Welsh Liberty is for sale and our yacht agents have placed advertisements, which have led to a number of enquiries that are now being evaluated.

Property & Investments

As we announced recently, the Company has received an offer, subject to contract, from Quada (Dockside) Ltd for the purchase of the Bute Dry Dock. The Company is assisting Quada with their enquiries in relation to the property and negotiations concerning the terms and timing of the potential transaction are progressing.
The period in question has seen growth in the group’s investment portfolio, however the weakness of the US dollar has meant these gains have been moderated. While we cannot comment on future currency fluctuations in this financial year, continued growth is expected.

AIM & Directors

Following a review of the group, the Directors have concluded that the Alternative Investment Market of the London Stock Exchange is a more appropriate market for a company of our size. The Directors have therefore appointed Arden Partners Limited and Bevan Ashford to advise on the transfer of the company’s shares from the Official List to the Alternative Investment Market, as soon as practicable.

The Director retiring by rotation is Sir William H McAlpine who, being eligible, offers himself for re-election.

On a personal note, I would like to thank the employees, shareholders, directors and my family for their continued support and willingness to adapt to the changes that have been implemented. I am also proud to announce that Franco Galea, our operations director in Malta, has recently become the island’s newest MP and we congratulate him, his father and family and thank them for their many years of excellent service.

Charles H. Bailey, Chairman, July 9th 2004

www.chbaileyplc.co.uk