TIDMBOTB
RNS Number : 4661H
Best of the Best PLC
08 June 2017
Best of the Best plc
("Best of the Best", "BOTB", "the Company" or "the Group")
Preliminary results for the twelve months ended 30(th) April
2017
Best of the Best plc ("BOTB)" runs competitions to win cars both
online and at key retail locations
Key Highlights:
-- Revenue up 7.0% to GBP10.81 million (2016: GBP10.10 million)
-- Profit before tax increased by 42.7% to GBP1.51 million (2016: GBP1.06 million)
-- Earnings per share increased by 41.6% to 13.74p (2016: 9.70p)
-- Online revenue increased by 18.5% to GBP8.36 million (2016:
GBP7.06 million) - representing 77.5% of total revenue
-- Net assets of GBP1.87 million, underpinned by cash balances
of GBP2.11 million (following 1.3p ordinary dividend paid in
October 2016, and 10p special dividend paid in December 2016)
-- Special Dividend of 6.5p per ordinary share to be paid to
shareholders in June 2017 in addition to the proposed 1.4p ordinary
dividend to be paid in September 2017
-- Wholly upgraded website and IT infrastructure successfully launched
-- Online marketing investment to acquire new players increased by over 40% to GBP1.2 million
-- Improving margins due to the increasing proportion of online
sales, combined with overall scale and competition frequency
enabling the Company to negotiate better prices on cars
purchased
William Hindmarch, Chief Executive, said:
"I am pleased to announce a solid set of preliminary results
with increasing revenues and profits. The transformation from a
physical site based retail business to a predominantly online
operation has continued, with the majority of our revenues (c.80%
in H2) now driven by digital channels and realised through our
website, www.botb.com.
The Company significantly increased both the quantity and
breadth of its marketing investment over the past year with
encouraging results and it is our intention to continue this trend
to support growth into the next financial year.
The business is well placed for future growth, with a new and
improved website and IT infrastructure in place, and we look
forward to updating shareholders on further progress in due
course."
Enquiries:
Best of the Best William Hindmarch, T: 020 7371
plc Chief Executive 8866
Rupert Garton, Commercial
Director
KTZ Communications Katie Tzouliadis T: 020 3178
6378
finnCap Carl Holmes T: 020 7220
(Nominated Adviser) Anthony Adams 0500
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Please visit www.botb.com for further information
Chief Executive's Statement
I am pleased to announce a solid set of preliminary results with
increased revenues and profits. The shift of revenues towards a
predominantly online business continues, which we expect will be
enhanced by a new fully responsive mobile website and optimised IT
infrastructure launched during the period.
We have continued to increase our marketing investment both
online and at our physical sites to support the growth in new
customers. The results of this have been encouraging and the
customer acquisition budget will increase further this year.
Our new and improved website gives us a strong, fresh and
flexible platform on which to improve our online offering, both to
attract new players and to extend functionality to retain existing
players.
Results
Total revenue for the twelve months ended 30(th) April 2017
increased by 7.0% to GBP10.81 million (2016: GBP10.10 million).
Online revenues rose by 18.5% over the period to GBP8.36 million.
Profit before tax rose by 42.7% to GBP1.51 million (2016: GBP1.06
million).
Encouragingly, the proportion of online sales rose to 77.5% of
total revenue for the period, increasing to 80% for the second half
of the year. These higher margin online sales contributed to
improved margins overall, which were further aided by increasingly
well-informed digital media purchasing and execution. Furthermore,
the Company is now buying cars as prizes for winners almost every
week and as a result the Company has been able to negotiate better
volume discounts from suppliers. This improved purchasing power
combined with selective offers and discounts for targeted brands
and models has aided margins over the period, contributing to the
strong performance.
The Company generated GBP2.13 million of operating cash flow
during the year. Net assets at 30(th) April 2017 stood at GBP1.87
million (2016: GBP1.59 million) and principally comprise cash of
GBP2.11 million, our cars on display at physical locations which
are held at a net realisable value of GBP0.30 million, and our 968
year leasehold office properties valued at GBP0.95 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.
Dividends
As previously announced, a 1.3p ordinary dividend was paid to
shareholders on 14 October 2016 and a 10p special dividend
amounting to GBP1.01 million was paid on 2(nd) December 2016. The
Board is recommending a final dividend of 1.4p per share (2016:
1.3p) for the full year ending 30(th) April 2017 subject to
shareholder approval at the Annual General Meeting on 7(th)
September 2017. The final dividend will be paid on 22(nd) September
2017 to shareholders on the register on 8(th) September 2017.
As the Company continues to be profitable, cash generative and
benefits from a robust balance sheet, the Company is also pleased
to declare the return of approximately GBP0.66m to shareholders by
way of a special dividend (the "Special Dividend") of 6.5 pence per
ordinary share. Following the payment of the Special Dividend the
Company will retain cash balances in excess of GBP1.2 million which
the Directors consider to be sufficient working capital to fund its
activities over the next 12 month period. The Special Dividend will
be paid on 30(th) June 2017 to shareholders on the register at the
close of business on 16(th) June 2017. The Ex-dividend date is
15(th) June 2017.
New Website Launch
In January 2017, we launched an entirely new website and IT
platform that was built from the ground up on a completely new code
base and infrastructure, replacing the 2009 legacy systems. The
principal aim of this was to give us a modern, mobile optimised
platform, offering the flexibility to continually develop and
improve the digital offering of the Company over the coming
years.
Maximum loads on the previous solution were becoming a limiting
factor in the face of a shortened competition lifecycle and
increased customer expectations. The new website and infrastructure
has been designed and built for greater scale, allowing us to
process many more simultaneous transactions.
The new website also offers further enhancements such as a new
multi-tiered loyalty club, player leagues, friend referral, and
improved gameplay. We are seeking to leverage this functionality
throughout the coming year to retain and entertain existing
customers and to attract an increasing number of new players.
Marketing Strategy and New Player Acquisition
Whilst retaining, servicing and rewarding our existing customer
base is critically important, the Company's principle focus is on
increasing our scale and in acquiring new players to participate in
our weekly win a car competition. Our key offline channels include
the display of physical cars in airports and shopping centre
locations, as well as other advertising through TV, radio, print
and public relations. Alongside our increased online digital and
social media marketing, we have also been placing considerable
emphasis on content creation and sponsorship as we work in
partnership with various social influencers, vloggers and
specialist car websites. The combination of these activities has
delivered an 18.5% increase in online sales.
Each of our key channels are carefully assessed to analyse
marketing returns versus player lifetime values. The weighting and
quantum of investment through each channel and individual campaign
is constantly monitored to optimise returns and educate future
investment decisions. Greater experience and better data
contributes to our confidence in growing our marketing budget. Last
year our marketing investment increased by over 40% on the previous
year. We are budgeting to further increase our commitment by more
than 70%, to approximately GBP2.0 million in the current financial
year.
Our airport and shopping centre locations continue to be a key
route to recruit and introduce new players. Over the period we
significantly increased transaction levels at these sites, as part
of a deliberate strategy to focus on educating and acquiring as
many new customers as possible, albeit at the expense of maximising
revenues. These physical locations also help build strong brand
awareness which aids the efficiency and effectiveness of our online
marketing spend. The Company is currently operating from seven
airport sites at Gatwick North, Gatwick South, Birmingham,
Manchester, Stansted, Edinburgh and Dublin; and one site at the
Westfield shopping centre in London's Shepherds Bush.
In the past 12 months, the biggest increase in marketing spend
has been on TV advertising as well as through collaborations with
social influencers and vloggers. We will be filming and producing a
new TV advert in June 2017 and will continue to increase our
investment in this medium. Although this channel is much harder to
track than much of our digital advertising, we are confident that
it has contributed to the overall improvement in metrics in many
other areas of our marketing. TV exposure has been supplemented by
trials on radio stations, and specifically on regional stations
where public relations can support the positive news of a local
winner in the area. In line with many other aspirational brands,
social influencers and vloggers are attracting an increasing share
of our investment. We have been collaborating with and sponsoring
several high-profile individuals to help promote the BOTB brand and
recruit new players by leveraging their sizeable and very engaged
audiences.
Our weekly winner surprises continue to generate very engaging
PR opportunities and we work with a specialist agency to ensure we
achieve as much coverage from this news as possible. We have been
particularly effective with local newspapers and websites as the
'feel-good' content is considered both newsworthy and unique. Our
social media platforms continue to gather scale and traction, with
our Facebook page now attracting 185,000 followers. Our website
metrics and traffic have maintained growth with circa 180,000
unique visitors to www.botb.com each month.
In the next year, we look forward to continued growth in player
acquisition through our airport and shopping centre locations,
through an increased focus on digital, social and video channels
and through further investments in TV and Radio.
Outlook
BOTB has increased both revenues and profits during the year,
remains cash generative and is supported by a robust balance sheet.
In the current financial year, the Board will focus on executing an
increased multi-channel digital marketing plan, leveraging the new
website and updated IT infrastructure, whilst ensuring that this
strategy provides a solid return on investment for
shareholders.
I believe the business is well positioned for the remainder of
the financial year, and I look forward to updating shareholders on
further progress in due course.
William Hindmarch
Chief Executive
8(th) June 2017
BEST OF THE BEST PLC
Consolidated Income Statement
For The Year Ended 30(th) April 2017
_____________________________________________________________________________________________________
2017 2016
GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 10,812 10,105
Cost of sales (3,865) (3,969)
------- -------
GROSS PROFIT 6,947 6,136
Administrative expenses (5,436) (5,078)
------- -------
OPERATING PROFIT 1,511 1,058
Finance income 1 2
------- -------
PROFIT BEFORE TAX 1,512 1,060
Tax (118) (126)
------- -------
PROFIT FOR THE YEAR 1,394 934
------- -------
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified
to profit or loss
Exchange differences on translating
foreign operations 25 -
------- -------
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR 1,419 934
======= =======
Profit on earnings per share
expressed
in pence per share:
Basic 13.78 9.75
Diluted 13.74 9.70
BEST OF THE BEST PLC
Consolidated Statement of Financial Position
As at 30(th) April 2017
_________________________________________________________________________________________________
2017 2016
GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 178 267
Property, plant and equipment 1,357 1,497
Investments 70 70
Deferred tax 37 41
------- -------
1,642 1,875
------- -------
CURRENT ASSETS
Trade and other receivables 245 169
Tax receivable - 4
Cash and cash equivalents 2,106 1,202
------- -------
2,351 1,375
------- -------
TOTAL ASSETS 3,993 3,250
======= =======
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 506 506
Share premium 179 176
Capital redemption reserve 198 198
Foreign exchange reserve 25 -
Retained earnings 962 711
------- -------
TOTAL EQUITY 1,870 1,591
------- -------
LIABILITIES
CURRENT LIABILITES
Trade and other payables 1,717 1,448
Tax payable 276 211
Provisions 130 -
TOTAL LIABILITIES 2,123 1,659
------- -------
TOTAL EQUITY AND LIABILITIES 3,993 3,250
======= =======
BEST OF THE BEST PLC
Consolidated Statement of Changes in Equity
For The Year Ended 30(th) April 2017
Called Capital
up Share redemption Other
share premium reserve reserve
capital
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 May
2015 455 - 197 148
--------- ---------- ------------ ----------
Issue of share capital 52 176 - -
Dividends paid - - - -
Share options lapsed
or exercised - - - (148)
Share repurchase (1) - 1 -
--------- ---------- ------------ ----------
Transactions with
owners 51 176 1 (148)
--------- ---------- ------------ ----------
Profit for the year - - - -
Total comprehensive - - - -
income
--------- ---------- ------------ ----------
Balance at 30 April
2016 506 176 198 -
--------- ---------- ------------ ----------
Issue of share capital - 3 - -
Dividends paid - - - -
--------- ---------- ------------ ----------
Transactions with - 3 - -
owners
--------- ---------- ------------ ----------
Profit for the year - - - -
Other comprehensive
income
Exchange differences - - - -
on translating foreign
operations
--------- ---------- ------------ ----------
Total comprehensive - - - -
income
--------- ---------- ------------ ----------
Balance at 30 April
2017 506 179 198 -
--------- ---------- ------------ ----------
Foreign
exchange Retained Total
reserve earnings equity
GBP'000 GBP'000 GBP'000
Balance at 1 May
2015 - 1,763 2,563
---------- ----------- ---------
Issue of share capital - - 228
Dividends paid - (2,089) (2,089)
Share options lapsed - 148 -
or exercised
Share repurchase - (45) (45)
---------- ----------- ---------
Transactions with
owners - (1,986) (1,906)
---------- ----------- ---------
Profit for the year - 934 934
Total comprehensive
income - 934 934
---------- ----------- ---------
Balance at 30 April
2016 - 711 1,591
---------- ----------- ---------
Issue of share capital - - 3
Dividends paid - (1,143) (1,143)
---------- ----------- ---------
Transactions with
owners - (1,143) (1,140)
---------- ----------- ---------
Profit for the year - 1,394 1,394
Other comprehensive
income
Exchange differences
on translating foreign
operations 25 - 25
Total comprehensive
income 25 1,394 1,419
---------- ----------- ---------
Balance at 30 April
2017 25 962 1,870
---------- ----------- ---------
BEST OF THE BEST PLC
Consolidated Cash Flow Statement
For The Year Ended 30(th) April 2017
___________________________________________________________________________________________________
2017 2016
Cash flows from operating GBP'000 GBP'000
activities
Cash generated from operations 2,177 1,518
Tax paid (45) (19)
---------------- ----------------
Net cash from operating activities 2,132 1,499
Cash flows from investing
activities
Purchase of intangible assets - (267)
Purchase of property plant
and equipment (132) (196)
Sale of property plant and
equipment 43 163
Interest received 1 2
---------------- ----------------
Net cash from investing activities (88) (298)
Cash flows from financing
activities
Equity dividends paid (1,143) (2,089)
Share buy back - (45)
Share issue 3 228
---------------- ----------------
Net cash from financing activities (1,140) (1,906)
Increase /(decrease) in cash
and cash equivalents 904 (705)
Cash and cash equivalents
at beginning of year 1,202 1,907
---------------- ----------------
Cash and cash equivalents
at end of year 2,106 1,202
================ ================
BEST OF THE BEST PLC
Notes to the Preliminary Announcement
For The Year Ended 30(th) April 2017
1. BASIS OF PREPARATION
The financial information has been prepared in accordance with
the recognition and measurement requirements of International
Financial Reporting Standards as adopted by the EU (Adopted IFRS)
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been
recorded under the historical cost convention. The financial
information set out above does not constitute the Group's statutory
accounts for the year ended 30(th) April 2017. The statutory
accounts for 2017 will be delivered to the Registrar of Companies
in due course.
2. BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiary undertakings). Where necessary, adjustments are
made to the financial statements of the subsidiaries to bring their
accounting policies in line with the Group. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
3. ACCOUNTING POLICIES
The preliminary financial information has been prepared using
accounting policies set out in the Group's statutory accounts for
the year ended 30(th) April 2017.
Revenue recognition
Revenue represents the value of tickets sold in respect of
weekly competitions, stated net of VAT, returns, rebates and
discounts. Revenue in respect of individual weekly competitions is
recognised on the date the result of those individual competitions
is determined.
Statement of financial position reclassification
The Group has previously classified motor vehicles on display at
retail sites as inventory on the basis that customers had the
opportunity to win these vehicles and they were therefore
considered to form part of the inventory of competition prizes.
As noted in the 2016 financial statements, the competitions have
changed in recent years and given the increased choice, it has
become much less common for the vehicles on display to actually be
taken by customers as prizes. The Directors have therefore
concluded that such vehicles ought to have been classified as
display items and as a category of plant and equipment in the prior
year given the change in the nature of the competitions.
These vehicles have been included in plant and equipment as at
30 April 2017 with a corresponding reclassification in the
comparative year. The net amount reclassified from inventories to
plant and equipment at 30 April 2016 is GBP314,240. Cash flows from
investing activities for the year ended 30 April 2016 have
increased by GBP157,668 with a corresponding reduction in cash
flows from operating activities.
4. TAX
Analysis of the tax charge
2017 2016
GBP'000 GBP'000
Current tax:
Tax 220 87
Overprovision in prior year (106) (3)
Deferred tax 4 42
Total tax charge in income statement
118 126
======== ========
BEST OF THE BEST PLC
Notes to the Preliminary Announcement
For The Year Ended 30(th) April 2017
5. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to the ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated using the weighted
average number of shares outstanding during the year, adjusted to
assume the conversion of all dilutive potential ordinary shares
under the Group's share option plans.
2017 2016
Profit for the year and basic and
diluted earnings attributable to
the owners of the parent - GBP'000 1,394 934
=========== ==========
Weighted average number of ordinary
shares - number 10,121,247 9,582,651
=========== ==========
Basic earnings per share - pence 13.78 9.75
=========== ==========
Adjusted weighted average number
of ordinary shares - number 10,152,920 9,626,686
=========== ==========
Diluted earnings per share - pence 13.74 9.70
=========== ==========
6. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid:
2017 2016
Number: Class: Value: GBP'000 GBP'000
10,124,580 (2016: 10,114,580)
Ordinary shares 5p 506 506
======== ========
7. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED
FROM OPERATIONS
2017 2016
GBP'000 GBP'000
Profit before tax 1,512 1,060
Depreciation charges 228 141
Amortisation charges 89 -
Profit on sale of property, plant
and equipment - (50)
Exchange differences 25 -
Finance income (1) (2)
-------- ----------
1,853 1,149
Increase in provisions 130 -
(Increase)/decrease in trade and
other receivables (76) 96
(Increase)/decrease in HMRC refund
receivable - 419
Increase/(decrease) in trade and
other payables 270 (146)
-------- ----------
Cash generated from operations 2,177 1,518
======== ==========
BEST OF THE BEST PLC
Notes to the Preliminary Announcement
For The Year Ended 30(th) April 2017
8. The annual report and accounts will be posted to shareholders
shortly and will be available for members of the public at the
Company's registered office, 2 Plato Place, 72-74 St Dionis Road,
London, SW6 4TU and will be available on the Company's website:
www.botb.com.
9. The Annual General Meeting will be held on 7(th) September
2017 at the offices of Best of the Best Plc, 2 Plato Place, 72-74
St Dionis Road, London SW6 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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