Half Yearly Report

RNS Number : 3890U

Best of the Best PLC

18 January 2017

 

Best of the Best plc

("Best of the Best", "the Company" or "the Group")

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 Highlights 

·              Revenue 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. 

Results

Revenue 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. 

Dividend

A 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 Acquisition

The 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.

Outlook

It 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 2016
___________________________________________________________________________________________________
		Six Months Ended 31/10/16 Unaudited		Six Months Ended 31/10/15 Unaudited		Year Ended 30/04/16 Audited
	Notes	£'000		£'000		£'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
Unaudited Consolidated Statement of Comprehensive Income
For the Period Ended 31st October 2016
___________________________________________________________________________________________________
		Six Months Ended 31/10/16 Unaudited		Six Months Ended 31/10/15 Unaudited		Year Ended 30/04/16 Audited
	Notes	£'000		£'000		£'000
PROFIT FOR THE FINANCIAL PERIOD		759		346		934
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD		759		346		934

BEST OF THE BEST PLC

Unaudited Consolidated Statement of Financial Position

31st October 2016

_________________________________________________________________________________________________

		Six Months Ended 31/10/16 Unaudited		Six Months Ended 31/10/15 Unaudited		Year Ended 30/04/16 Audited
	Notes	£'000		£'000		£'000
ASSETS NON-CURRENT ASSETS
Development costs		376		105		267
Property, plant and equipment		1,154		1,125		1,181
Investments		70		70		70
Deferred tax		53		42		41
		1,653		1,342		1,559
CURRENT ASSETS
Inventories		279		398		316
Trade and other receivables		191		660		169
Tax receivables		5		-		4
Cash and cash equivalents		2,277		2,192		1,202
		2,752		3,250		1,691
TOTAL ASSETS		4,405		4,592		3,250
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital		506		485		506
Treasury shares		-		(14)		-
Share premium		179		118		176
Capital redemption reserve		198		197		198
Share-based payment reserve		-		148		-
Retained earnings		1,338		1,993		711
TOTAL EQUITY		2,221		2,927		1,591
LIABILITIES
CURRENT LIABILITES
Trade and other payables		1,842		1,500		1,448
Tax payable		342		165		211
TOTAL LIABILITIES		2,184		1,665		1,659
TOTAL EQUITY AND LIABILITIES		4,405		4,592		3,250

 

BEST OF THE BEST PLC

Unaudited Consolidated Statement of Changes in Equity

For the Period Ended 31st October 2016

	Called up
	share		Retained		Share
	capital		earnings		premium
	£'000		£'000		£'000
Balance at 1 May 2015	455		1,763		-
Changes in equity
Issue of share capital	51		-		176
Dividends	-		(2,089)		-
Share repurchase	-		(44)		-
Total comprehensive income	-		1,081		-
Balance at 30 April 2016	506		711		176
Changes in equity
Issue of share capital	-		-		3
Dividends	-		(132)		-
Total comprehensive income	-		759		-
Balance at 31 October 2016	506		1,338		179

	Capital
	redemption		Other		Total
	reserve		reserves		equity
	£'000		£'000		£'000
Balance at 1 May 2015	197		148		2,563
Changes in equity
Issue of share capital	-		-		227
Dividends	-		-		(2,089)
Share repurchase	-		-		(44)
Total comprehensive income	1		(148)		934
Balance at 30 April 2016	198		-		1,591
Changes in equity
Issue of share capital	-		-		3
Dividends	-		-		(132)
Total comprehensive income	-		-		759
Balance at 31 October 2016	198		-		2,221

BEST OF THE BEST PLC

Unaudited Consolidated Statement of Changes in Equity

For the Period Ended 31st October 2016

			Called up
			share		Retained		Share
			capital		earnings		premium
			£'000		£'000		£'000
Balance at 1 May 2015			455		1,763		-
Changes in equity
Issue of share capital			30		-		118
Treasury shares			-		-		-
Dividends			-		(116)		-
Total comprehensive income			-		346		-
Balance at 31 October 2015			485		1,993		118
	Capital
	redemption		Other		Treasury		Total
	reserve		reserves		shares		equity
	£'000		£'000		£'000		£'000
Balance at 1 May 2015	197		148		-		2,563
Changes in equity
Issue of share capital	-		-		-		148
Treasury shares	-		-		(14)		(14)
Dividends	-		-		-		(116)
Total comprehensive income	-		-		-		346
Balance at 31 October 2015	197		148		(14)		2,927

BEST OF THE BEST PLC
Unaudited Consolidated Cash Flow Statement
For the Period Ended 31st October 2016
________________________________________________________________________________________________
		Six Months Ended 31/10/16 Unaudited		Six Months Ended 31/10/15 Unaudited		Year Ended 30/04/16 Audited
Cash flows from operating activities	Notes	£'000		£'000		£'000
Cash generated from operations	7	1,384		525		1,675
Tax paid		(47)		(69)		(19)
Net cash from operating activities		1,337		456		1,656
Cash flows from investing activities
Purchase of intangible fixed assets		(109)		(100)		(267)
Purchase of tangible fixed assets		(37)		(90)		(195)
Sale of tangible fixed assets		12		-		5
Interest received		1		1		2
Net cash from investing activities		(133)		(189)		(455)
Cash flows from financing activities
Share issue		3		30		227
Share options exercised		-		118		-
Equity dividends paid		(132)		(116)		(2,089)
Share repurchase		-		(14)		(44)
Net cash from financing activities		(129)		18		(1,906)
Increase/(decrease) in cash and cash equivalents		1,075		285		(705)
Cash and cash equivalents at beginning of period		1,202		1,907		1,907
Cash and cash equivalents at end of period		2,277		2,192		1,202

 

                                                                                  BEST OF THE BEST PLC

                                                                   Notes to the Interim Financial Statements

                                                                      For the Year Ended 31^st October 2016

1.           BASIS OF PREPARATION

These condensed interim financial statements are for the six months ended 31 October 2016. They have been prepared with regard to the requirements of International Financial Reporting Standards as adopted by the EU. They do not include all of the information required for full financial statements, and should be read in conjunction with the financial statements (under IFRS) of the Group for the year ended 30 April 2016.

The Group is listed on the Alternative Investment Market ("AIM") of the London Stock Exchange and has prepared the interim financial statements in accordance with AIM rule 18. The Group has elected not to adopt the full scope of IAS 34 'Interim Financial Reports', which is a voluntary requirement.

The financial statements have been prepared under the historical cost convention. Principal accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 April 2016.

2.              SEGMENTAL REPORTING

  The directors consider that the primary reporting format is by business segment and that there is only one such segment being that of competition operators. This disclosure has already been provided in these financial statements.

3.             EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit for the relevant financial period attributable to ordinary equity holders of the entity by the weighted average number of ordinary shares in issue during the relevant financial periods.

Diluted earnings per share is calculated by adjusting earnings and weighted average number of ordinary shares outstanding to assume conversion of dilutive potential ordinary shares. Potential ordinary shares shall be treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations.

		Six Months Ended 31/10/16		Six Months Ended 31/10/15		Year Ended 30/04/16
Weighted average number of shares in issue		10,117,678		9,398,052		9,582,651
Profit after tax i.e. earnings		£758,893		£346,113		£933,894
Impact of dilutive securities on weighted average number of shares in issue		38,237		415,231		44,035

4.          DIVIDENDS

A final dividend, based on the results for the year ended 30 April 2016 of 1.3p per share was paid on 14 October 2016 (30 April 2015; 1.2p).

5.          TAXATION

The current year income tax liability for the six months ended 31 October 2016 is estimated at £165,153 (period ended 31 October 2015; £131,664).

6.          POST BALANCE SHEET EVENTS

A special dividend was declared of approximately £1.0m to shareholders of 10 pence per ordinary share (the "Special Dividend").

In order to pay the Special Dividend the Company has produced and filed a new unaudited balance sheet as at 30 September 2016 with Companies House, demonstrating that it had sufficient distributable reserves.

Following payment of the Special Dividend, the Company retained cash balances in excess of £1.0 million, which the Directors considered to be sufficient working capital to fund its activities over the following 12 month period.

The Special Dividend was paid on 2 December 2016 to shareholders on the register at the close of business on 18 November 2016. The Ex-dividend date was 17 November 2016.

7.          CASH GENERATED FROM OPERATIONS

		Six Months Ended 31/10/16 Unaudited		Six Months Ended 31/10/15 Unaudited		Year Ended 30/04/16 Audited
		£'000		£'000		£'000
Profit before income tax		924		478		1,059
Depreciation charges		55		14		63
Profit on disposal of fixed assets		(3)		-		-
Finance income		(1)		(1)		(2)
Decrease in inventories		37		103		185
(Increase)/decrease in trade and other receivables		(22)		25		516
Increase/(decrease) in trade and other payables		394		(94)		(146)
		1,384		525		1,675

8.          RELATED PARTY DISCLOSURES

M W Hindmarch, a non-executive director, of Best of the Best Plc. During the period ended 31 October 2016 payments were made to him in respect of consultancy services totalling £6,000 (2015: £6,000).

On 5 September 2016 Colin Hargrave, a non-executive director, exercised options over 10,000 ordinary shares under an unapproved share option scheme. These shares were exercised at £0.38 per share and on that day the share price was £2.26.

9.          ULTIMATE CONTROLLING PARTY

The ultimate controlling party at the end of this interim period was Mr W. Hindmarch, the Chief Executive Officer of the Company, who owns 50.29% of the issued share capital at the balance sheet date.

10.        PUBLICATION OF NON-STATUTORY ACCOUNTS

The financial information contained in this interim statement does not constitute statutory accounts as defined in sections 434 of the Companies Act 2006.  All information is unaudited apart from that included for the year ended 30 April 2016.

The statutory accounts for the financial year ended 30 April 2016 were prepared under IFRS as adopted by the EU. These accounts, upon which the auditors issued an unqualified opinion did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under 498(2) or (3), (accounting records or returns inadequate, accounts not agreeing with records and returns or failure to obtain necessary information and explanations) of the Companies Act 2006, have been delivered to the Registrar of Companies. 

This interim statement will be made available at the Company's registered office at 2 Plato Place, 72-74 St. Dionis Road, London SW6 4TU and will be available on the Company's website: www.botb.com.

 

END

 

 

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