Interim results for the six months ended 31 October 2016
Best of the Best runs competitions to win cars both online and at retail locations
Key HighlightsRevenue up 10.9% to £5.52 million (2015: £4.98 million)
Profit before tax increased to £0.92 million (2015: £0.48 million)
Net assets of 2.22 million (2015: £2.92 million), with cash balances of £2.28 million (2015: £2.19 million)
Online revenues increased by 24.6% to £4.16 million (2015: £3.34 million)
Online revenues represented 75.4% of total revenue in the period
Earnings per share increased from 3.68 pence per share to 7.50 pence per share
Special dividend of 10.0 pence per share paid in December 2016
Growing investment in online marketing to increase player acquisition
William Hindmarch, Chief Executive, said:
"I am pleased to announce an encouraging set of interim results with increased revenues and profits.
We have continued to grow our investment in all forms of marketing which has helped drive revenues and increase awareness of the BOTB brand and the Dream Car competition. It is our intention to gradually accelerate the rate of this investment to build on these results.
We are placing a strong emphasis on social media to share our winners' experiences and this in turn is proving an effective medium through which to acquire new customers.
The business is well placed for future growth and we look forward to updating shareholders on progress in due course."
Enquiries:Best of the Best plc William Hindmarch, Chief Executive Rupert Garton, Commercial Director
T: 020 7371 8866
finnCap Matt Goode
Carl Holmes Anthony Adams
T: 0207 220 0500
KTZ Communications Katie Tzouliadis T: 020 3178 6378
Please visit www.botb.com for further information
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Chief Executive's Statement
We have continued to grow our investment in all forms of marketing which has helped drive revenues and increase awareness of the BOTB brand and the Dream Car competition. It is our intention to gradually accelerate the rate of this investment to build on these results.
We are placing a strong emphasis on social media to share our winners' experiences and this in turn is proving an effective medium through which the Company can acquire new customers.
ResultsRevenue for the six months ended 31 October 2016 increased by 10.9 per cent to £5.52 million (2015: £4.98 million) and profit before tax rose to £0.92 million (2015: £0.48 million). Operating margins have improved and marketing investment in customer acquisition during the period was marginally lower than originally anticipated. The Company has also benefited from the operational gearing driven by the increased proportion of higher margin online revenues.
The Company generated £1.38 million of operating cash flow. Net assets at 31 October 2016 stood at £2.22 million (2015: £2.92 million) and principally comprise cash of £2.28 million, our stock of cars on display which are held at a net realisable value of £0.28 million, and our 967 year leasehold office properties valued at £0.95 million.
At the period end, cash balances stood at £2.28 million (2015: £2.19 million). As previously reported, a 10.0 pence special dividend amounting to approximately £1.0 million, was paid to shareholders on 2 December 2016. Current cash balances stand at approximately £1.6 million.
The Company has noted the recent VAT decision concerning a company with similar activities in our sector. The Company is reviewing this decision and will update shareholders in due course.
DividendA dividend in respect of the full year ended 30 April 2016 of 1.3 pence per share was paid to shareholders on 14 October 2016. A special dividend of 10.0 pence per share was paid to shareholders on 2 December 2016 and, as in prior years, the Directors expect to propose a final dividend for the financial year ending 30 April 2017, subject to the Company's trading performance, and to maintain a progressive dividend policy.
New Player AcquisitionThe Company acquires new players and services existing players through two principal routes. The first is via traditional physical retail locations in airport terminals and shopping centres. The second is through principally online advertising channels including various digital marketing initiatives, television and radio, as well as more traditional print advertising and PR.
The Company is currently operating from seven airport sites and one shopping centre site. Our airport locations are at Gatwick North, Gatwick South, Birmingham, Manchester Terminal 1, Stansted, Edinburgh, and Dublin's Terminal 2. We also operate from Westfield's Shepherds Bush shopping centre. We continue to focus on acquiring as many new customers as possible at these locations as well as expanding and reinforcing the BOTB brand, and I am pleased to say that recent initiatives have performed well.
Our Indian franchise, which is now trading under the BOTB brand from Hyderabad airport continues to trade well, with further sites under negotiation. The royalty-based agreement allows the franchisee to leverage our systems and software, as well as our marketing and operating experience.
We continue to grow our online marketing spend and it is expected that this investment will continue to scale as we gain confidence and data around the longer-term customer lifecycle returns we are achieving. We have experienced success in many forms of social media marketing, with our Facebook page now having over 175,000 followers. Our weekly videos of winners being surprised with their cars, and showing the cars being collected from dealerships, continue to be very well received and are encouraging both new customer registrations and increasingly regular play.
Our website www.botb.com is in the final phase of testing, following a complete redesign and rebuild, to take advantage of the latest online and database technologies. This will improve the performance of the site for our customers as well as the back-end platform components we use internally. It will also add new functionality for our customers such as enhanced loyalty features, player leagues and other community and content facilities. The updated designs will both refresh the site for existing users and aid the conversion of new customers across multiple device formats. We expect this to be launched in the coming weeks.
We look forward to the continued growth in player acquisition, both through our airport and shopping centre locations, and through our increased focus on online channels and television.
OutlookIt has been a solid first six months, showing encouraging growth in both revenues and profits, together with firm cost control. We hope to build on the solid start to the financial year and I look forward to updating shareholders on further progress in due course.
William Hindmarch Chief Executive
18 January 2017
BEST OF THE BEST PLC Unaudited Consolidated Income Statement For the Period Ended 31st October 2016Notes | Six Months Ended 31/10/16 Unaudited £'000 | Six Months Ended 31/10/15 Unaudited £'000 | Year Ended 30/04/16 Audited £'000 | |
Revenue | 2 | 5,519 | 4,976 | 10,104 |
Cost of sales | (1,874) | (2,033) | (3,969) | |
GROSS PROFIT | 3,645 | 2,943 | 6,135 | |
Administrative expenses | (2,722) | (2,466) | (5,078) | |
OPERATING PROFIT | 923 | 477 | 1,057 | |
Finance income | 1 | 1 | 2 | |
PROFIT BEFORE TAX | 924 | 478 | 1,059 | |
Tax | 5 | (165) | (132) | (125) |
PROFIT FOR THE PERIOD | 759 | 346 | 934 | |
Profit on earnings per share expressed in pence per share: | 3 | |||
Basic from continuing operations | 7.50 | 3.68 | 9.75 | |
Diluted from continuing operations | 7.47 | 3.53 | 9.70 |
Best of the Best plc published this content on 18 January 2017 and is solely responsible for the information contained herein.
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