REG - Best of the Best PLC - Final Results
20/06/2023 14:30
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RNS Number : 2905D Best of the Best PLC 20 June 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF THE MARKET ABUSE REGULATION (EU 596/2014) AS IT FORMS PART
OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED.
UPON PUBLICATION OF THIS ANNOUNCEMENT, THE INSIDE INFORMATION CONTAINED HEREIN
WILL BE CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Best of the Best plc
("Best of the Best", "BOTB", "the Company" or "the Group")
Preliminary results for the year ended 30 April 2023
Best of the Best plc (LSE: BOTB), the provider of online competitions to win
cars and other prizes, reports its preliminary results for the year ended 30
April 2023 (the "Period")
Key highlights:
· Revenue of £26.2 million (2022: £34.7 million) is a 47% increase on
the £17.8 million delivered in the pre-pandemic year of FY2020, albeit
materially lower than the £45.7m delivered in FY2021 when the business
benefitted from the favourable trading conditions during the pandemic.
· Profit before tax of £5.5 million (2022: £5.1 million), as a result of
cost savings and disciplined investment in customer acquisition and marketing
in order to protect margins.
· A final dividend of 6.0p per ordinary share was paid to shareholders
on 30 September 2022 (2021: 5.0p) and a tender offer returned c. £6.275
million to shareholders on 15 July 2022. A dividend is not currently
proposed in respect of the year ended 30 April 2023.
· On 8 September 2022, Globe Invest Limited ("GIL"), the family office
of Teddy Sagi, acquired a 29.9% stake in the Company at 400p per share and
signed of a letter of Intent ("LOI") to enter into a Licensing and
Distribution Agreement and a Marketing and Collaboration Agreement (the
"Agreements").
· Trading for the new financial year has started in line with management
expectations, which include the successful conclusion and execution of the
Agreements and continued collaboration with GIL.
Post period events:
· We draw your attention to the separate Rule 2.7 announcement
("Announcement") released today by GIL, regarding a recommended cash offer for
the entire issued and to be issued share capital of the Company which they do
not already own, at a price of 535p per ordinary share (the "Offer").
Shareholders are advised to read and review the Announcement and the full
details of the Offer, including the reasons for the recommendation of the
Offer by the Independent Directors of the Company which is available at
botb.com/about/investors/offer, in full.
· In conjunction with the Offer, current Chief Executive Officer William
Hindmarch has indicated his intention to accept the Offer for his entire
existing shareholding and also step down from the Board on or shortly after
the Offer becoming or being declared unconditional. It is intended that the
search for a replacement will also commence at this time. Mr. Hindmarch is
expected to continue to remain involved with the Company as a consultant for a
period of six months following his resignation, to ensure a smooth transition
in leadership and an orderly handover.
William Hindmarch, Chief Executive, said:
"Whilst the period has not been without its challenges and we have delivered
revenue that is a little lower than hoped, we are pleased to have produced
profit in line with the expectations that we set out at the time of our
interim financial results in January 2023.
BEST OF THE BEST PLC
Preliminary Results (continued)
For The Year Ended 30 April 2023
The Company has delivered consistently profitable results over many years and
management has been adjusting the various business levers at its disposal,
including the competition mix and its marketing strategy, to ensure that where
revenues and customer acquisition have stabilised and re-based post pandemic
the business continues to be profitable and cash generative.
Management has remained sharply focused on improving the margins on revenue
that is clearly lower than during the pandemic affected years of 2020-22,
albeit which is still materially higher than the levels experienced
pre-pandemic. Revenue has declined this year in line with the trends
outlined in the Interim results in January 2023, largely as a result of
changes to the competition line-up earlier in the year, with management
deciding to reformat both the weekly competitions and available prizes.
This year saw the Company navigating well documented pressures on consumer
discretionary spending, and we recognise that recently, a more active
competitor landscape has evolved and that the sector has broadened to include
a greater range of competition operators contending for a share of wallet.
Competitors have also increased the cost of acquiring new customers and
therefore impacts the available ROI.
These factors, among others, contributed to management's strong belief that
the Company's future required the support of a successful and deep-rooted
relationship with an established partner such as GIL, which resulted in them
acquiring a 29.9% stake in the Company and the signing of a LOI to enter into
a Licensing and Distribution Agreement and a Marketing and Collaboration
Agreement.
GIL has today announced its intention to increase its equity holding in the
Company to a controlling stake by way of the Offer, before accelerating its
collaboration and subsequent investment. The reasons for recommending the
Offer are set out in that Announcement, but in particular, the Board strongly
believes that the future of the Company lies in a successful and deep-rooted
relationship with a partner such as GIL, bringing broader experience and
relationships in the Company's sector, that can also provide additional
expertise and potential funding, as well as specific assistance in marketing,
technology and internationalisation.
After 23 years of steady stewardship since founding the Company in 1999, I
have decided in conjunction with the Offer by GIL, that this represents the
right time for me to step down as CEO of the Company. I expect to work with
GIL to identify my replacement whilst looking forward to pursuing ventures
away from the business I founded over two decades ago. Today's news of the
Offer for the Company by GIL is material and I urge shareholders to carefully
read the offer Announcement."
Enquiries:
Best of the Best plc William Hindmarch, Chief Executive T: 020 7371 8866
Rupert Garton, Commercial Director
Buchanan Chris Lane T: 0207 466 5000
(Public Relations & Press) Toto Berger
finnCap Corporate Finance T: 020 7220 0500
(Nominated Adviser and Broker) Carl Holmes
Teddy Whiley
Alice Lane
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
BEST OF THE BEST PLC
Preliminary Results (continued)
For The Year Ended 30 April 2023
CHIEF EXECUTIVE'S STATEMENT
Final Results
Revenue for the year ended 30 April 2023 was £26.2 million (2022: £34.7
million) and profit before tax was £5.5 million (2022: £5.1 million).
Earnings per share were up 20% to 54.5p (2022: 45.30p).
BOTB remains cash generative and a total of £2.9 million (2022: £4.2
million) of cash flow was generated from operations during the year. Net
assets at 30 April 2023 stood at £6.0 million (2022: £8.1 million),
underpinned by cash balances of £6.9 million (2022: £10.8 million). The
Group is debt free.
Competitions
As previously reported, in order to put the business in a better position for
the reduced levels of revenue post-pandemic we made changes to the product
line-up, re-balancing our three principal weekly competitions, to two enhanced
ones with an additional 'Friday Fun' competition, alongside other ad hoc
offerings.
Our principal competitions are now the flagship Weekly Dream Car and Midweek
Lifestyle Competitions, the latter being a combination of our previous Midweek
Car and Lifestyle competitions. Both competitions offer the opportunity to win
brand new cars, with the former operating via Spot the Ball and the latter via
a skill-based question.
During the year we progressed trials to gain customer insights into frequency
and Life Time Value (LTV), including variable pricing structures, large cash
prizes and bundled prizes. This data contributed to our varied weekly
marketing schedule that keeps the competitions fresh, interesting and relevant
to our loyal customer base.
Marketing and CRM
The business continues to offer a diverse promotional schedule featuring a
variety of prizes to engage existing and reactivate lapsing players from its
database of 1.8 million customers. The weekly selection caters to all player
cohorts with a wide range of ticket prices, prize types and cash sums.
Our CRM platform provides enhanced email and push messaging, as well as
personalised on-site content and re-targeting campaigns on both the Meta and
Google channels.
App uptake has continued to grow and now accounts for 24% of weekly players
and revenue. We expect this number to increase due to the improved ease and
speed of play, facilitated by the multiple-choice question entry mechanic in
both the Midweek Lifestyle and 'Friday Fun' competitions, as well as the wider
promotion of both iOS and Android apps across all of our marketing channels.
Customer acquisition during the year has required a careful balance of
recruiting new players, whilst ensuring that CPAs and 24-month LTVs remain
favourably aligned. We have, as usual, focused on the best-performing digital
channels, complemented by ongoing traditional TV media and the PR coverage
generated by our winner surprises. Over the year, CPMs on Meta channels slowly
trended back towards pre-Covid levels, particularly for the Midweek Lifestyle
Competition where the wide-ranging prize offering is attracting a broader pool
of players. LTVs have stabilised post-pandemic, albeit at somewhat lower
levels, and management continues to assess the best ways to drive engagement
with additional competitions to deliver incremental revenue and AOV increases,
to offset CPA and inflationary pressures experienced elsewhere.
BEST OF THE BEST PLC
Preliminary Results (continued)
For The Year Ended 30 April 2023
We continue to see the benefits of our ongoing SEO marketing, complemented
recently by the recruitment of an inhouse specialist, with improved organic
results allowing us to reduce spend on paid search to drive traffic to the
website.
Dividends
A final dividend to 6.0p per ordinary share was paid to shareholders on 30
September 2022 (2021: 5.0p) and a tender offer returned c. £6.275 million to
shareholders on 15 July 2022. In the light of the Offer by GIL announced
today, a dividend is not currently proposed in respect of the year ended 30
April 2023.
Board changes in the period
Following GIL's acquisition of a 29.9% interest in the Company, Charles Butler
was appointed Non-Executive Chairman on 28 September 2022. In conjunction with
Charles' appointment, David Firth, BOTB's Chairman, stepped down from his
position but remains on the Board as an Independent Non-Executive Director and
Audit Committee Chairman.
In addition the Company was pleased to announce the appointment of Joanna (Jo)
Bucci as a further Independent Non-Executive Director. Joanna joined the Board
on 1 July 2022.
Following the appointment of Jo and Charles, the Company has three Executive
Directors and four Non-Executive Directors.
GIL Offer
Shareholders are strongly advised to read the full Announcement released today
by GIL regarding the Offer for the entire issued and to be issued share
capital of the Company which they do not already own, at a price of 535p per
ordinary share. Shareholders are advised to read and review the Announcement
and the full details of the Offer, including the reasons for the
recommendation of the Offer by the Independent Directors of the Company. A
link to the announcement can be found at botb.com/about/investors/offer.
Mr. William Hindmarch
Mr. William Hindmarch, Chief Executive Officer and the founder of the Company
has indicated that after 23 years at the helm of the Company, he sees this
juncture as the right time for him to stand down to pursue other personal
interests and business ventures. Mr. William Hindmarch has indicated his
intention to accept the Offer and also to step down from the Board on or
shortly after the Offer becoming or being declared unconditional.
The Company has not yet identified a new Chief Executive Officer, but believes
that the Company will benefit from the network and expertise of GIL in this
search. Mr. William Hindmarch is expected to remain involved with the Company
as a consultant to ensure an orderly handover and to assist with identifying
his replacement.
BEST OF THE BEST PLC
Consolidated Statement of Comprehensive Income
For The Year Ended 30 April 2023
Notes 2023 2022
£000 £000
CONTINUING OPERATIONS
Revenue 26,151 34,682
Cost of sales (11,107) (15,272)
GROSS PROFIT 15,044 19,410
Administrative expenses (9,635) (14,271)
OPERATING PROFIT 5,409 5,139
Finance income 7 39 2
PROFIT BEFORE INCOME TAX 8 5,448 5,141
Income tax 9 (787) (877)
PROFIT FOR THE YEAR 4,661 4,264
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations - -
OTHER COMPREHENSIVE INCOME FOR THE
YEAR, NET OF INCOME TAX - -
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR 4,661 4,264
Profit attributable to:
Owners of the parent 4,661 4,264
Total comprehensive income attributable to:
Owners of the parent 4,661 4,264
Earnings per share expressed in pence per share
Basic from continuing operations 11 54.46 45.30
Diluted from continuing operations 11 53.73 44.37
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Consolidated Statement of Financial Position
As at 30 April 2023
Notes 2023 2022
£000 £000
ASSETS
NON-CURRENT ASSETS
Intangible assets 13 89 107
Property, plant and equipment 14 1,045 1,075
Investments 15 - -
1,134 1,182
CURRENT ASSETS
Trade and other receivables 16 213 184
Cash and cash equivalents 17 6,900 10,818
7,113 11,002
TOTAL ASSETS 8,247 12,184
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 18 418 471
Share premium 277 277
Capital redemption reserve 289 236
Foreign exchange reserve 45 35
Retained earnings 4,925 7,041
TOTAL EQUITY 5,954 8,060
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 19 1,754 3,625
Tax payable 507 475
Deferred tax 20 32 24
TOTAL LIABILITIES 2,293 4,124
TOTAL EQUITY AND LIABILITIES 8,247 12,184
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Company Statement of Financial Position
As at 30 April 2023
Notes 2023 2022
£000 £000
ASSETS
NON-CURRENT ASSETS
Intangible assets 13 89 107
Property, plant and equipment 14 1,045 1,075
Investments 15 - -
1,134 1,182
CURRENT ASSETS
Trade and other receivables 16 213 184
Cash and cash equivalents 17 6,900 10,818
7,113 11,002
TOTAL ASSETS 8,247 12,184
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 18 418 471
Share premium 277 277
Capital redemption reserve 289 236
Retained earnings 4,970 7,076
TOTAL EQUITY 5,954 8,060
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 19 1,754 3,625
Tax payable 507 475
Deferred tax 20 32 24
TOTAL LIABILITIES 2,293 4,124
TOTAL EQUITY AND LIABILITIES 8,247 12,184
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Consolidated Statement of Changes in Equity
For The Year Ended 30 April 2023
Capital redemption reserve
Called up Share premium
share capital
£000 £000 £000
Balance at 1 May 2021 471 277 236
Issue of share capital - - -
Dividends paid - - -
Transactions with owners - - -
Profit for the year - - -
Other comprehensive income
Exchange differences arising on translating
foreign operations - - -
Total comprehensive income - - -
Balance at 30 April 2022 471 277 236
Dividends paid - - -
Effect of share buy back (53) 53
Transactions with owners (53) - 53
Profit for the year - - -
Other comprehensive income
Exchange differences arising on translating - - -
foreign operations - - -
Total comprehensive income - - -
Balance at 30 April 2023 418 277 289
Foreign exchange reserve
Retained earnings
Total
£000 £000 £000
Balance at 1 May 2021 27 7,953 8,964
Issue of share capital - - -
Dividends paid - (5,177) (5,177)
Transactions with owners - (5,177) (5,177)
Profit for the year - 4,264 4,264
Other comprehensive income
Exchange differences arising on translating
foreign operations 8 1 9
Total comprehensive income 8 4,265 4,272
Balance at 30 April 2022 35 7,041 8,060
Dividends paid - (502) (502)
Effect of share buy back (6,275) (6,275)
Transactions with owners - (6,777) (6,777)
Profit for the year - 4,661 4,661
Other comprehensive income
Foreign exchange movement 10 - 10
Total comprehensive income 10 4,661 4,671
Balance at 30 April 2023 45 4,925 5,954
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Company Statement of Changes in Equity
For The Year Ended 30 April 2023
Capital redemption reserve
Called up Share premium
share capital
£000 £000 £000
Balance at 1 May 2021 471 277 236
Issue of share capital - - -
Dividends paid - - -
Transactions with owners - - -
Profit for the year - - -
Total comprehensive income - - -
Balance at 30 April 2022 471 277 236
Dividends paid - -
Effect of share buy back (53) 53
Transactions with owners (53) 53
Profit for the year -
Total comprehensive income - - -
Balance at 30 April 2023 418 277 289
Retained
earnings Total
£000 £000
Balance at 1 May 2021 7,975 8,959
Issue of share capital - -
Dividends paid (5,177) (5,177)
Transactions with owners (5,177) (5,177)
Profit for the year 4,270 4,270
Foreign exchange movement 8 8
Total comprehensive income 4,278 4,278
Balance at 30 April 2022 7,076 8,060
Dividends paid (502) (502)
Effect of share buy back (6,275) (6,275)
Transactions with owners (6,777) (6,777)
Profit for the year 4,661 4,661
Foreign exchange movement 10 10
Total comprehensive income 4,671 4,671
Balance at 30 April 2023 4,970 5,954
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Consolidated Statement of Cash Flows
For The Year Ended 30 April 2023
Notes 2023 2022
£000 £000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax 5,449 5,141
Depreciation charges 36 46
Amortisation charges 66 53
Exchange differences - 8
Profit on disposal of property, plant and equipment (21) -
Finance income (39) (2)
Decrease/(increase) in trade and other receivables (28) 86
Increase in trade and other payables (1,838) 572
Tax paid (764) (1,707)
Net cash from operating activities 2,861 4,197
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets (74) -
Purchase of property, plant and equipment (48) (18)
Proceeds on disposal of fixed assets 81 -
Interest received 39 2
Net cash from investing activities (2) (16)
CASH FLOWS FROM FINANCING ACTIVITIES
Share repurchase (6,275) -
Equity dividends paid (502) (5,177)
Net cash from financing activities (6,777) (5,177)
Decrease in cash and cash equivalents (3,918) (996)
Cash and cash equivalents at beginning of year 10,818 11,814
Cash and cash equivalents at end of year 17 6,900 10,818
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Company Statement of Cash Flows
For The Year Ended 30 April 2023
Notes 2023 2022
£000 £000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax 5,449 5,145
Depreciation charges 36 46
Amortisation charges 66 53
Exchange differences - 8
Profit on disposal of property, plant and equipment (21) -
Finance income (39) (2)
Decrease/(increase) in trade and other receivables (28) 86
Increase in trade and other payables (1,838) 568
Tax paid (764) (1,707)
Net cash from operating activities 2,861 4,197
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets (74) -
Purchase of property, plant and equipment (48) (18)
Proceeds on disposal of property plant and equipment 81 -
Interest received 39 2
Net cash from investing activities (2) (16)
CASH FLOWS FROM FINANCING ACTIVITIES
Share repurchase (6,275) -
Equity dividends paid (502) (5,177)
Net cash from financing activities (6,777) (5,177)
Decrease in cash and cash equivalents (3,918) (996)
Cash and cash equivalents at beginning of year 10,818 11,814
Cash and cash equivalents at end of year 17 6,900 10,818
The notes form part of this Preliminary Announcement
BEST OF THE BEST PLC
Notes to the Preliminary Announcement
For The Year Ended 30 April 2023
1. GENERAL INFORMATION
The principal activity of the Company and the Group is to operate weekly
competitions to win luxury cars and other prizes online.
These financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") and International Financial Reporting
Interpretation Committee ("IFRIC") Interpretations as issued by the
International Accounting Standards Board and in conformity with the
requirements of the Companies Act 2006 applicable to those companies reporting
under IFRS. The financial statements have been prepared under the historical
cost convention.
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all years presented, unless otherwise stated.
The financial statements are presented in Pounds Sterling. All amounts,
unless otherwise stated, have been rounded to the nearest thousand Pounds.
The preparation of financial statements in compliance with adopted IFRS
requires the use of certain critical accounting estimates. It also requires
management to exercise judgement in applying those accounting policies. The
areas where significant judgements and estimates have been made in preparing
these financial statements and their effect are disclosed in Note 4.
The Directors are satisfied that the Company and Group have adequate resources
to continue in business for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the financial
statements.
2. PRINCIPAL ACCOUNTING POLICIES
2.1 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
The Company and the Group has adopted all of the new and revised Standards and
Interpretations issued by the International Accounting Standards Board that
are relevant to its operations and effective for accounting periods beginning
1 May 2022. The adoption of these new and revised Standards and
Interpretations had no material effect on the profit or loss or financial
position of the Company and Group.
At the date of authorisation of these financial statements, the Company and
Group has not early adopted the following amendments to Standards and
Interpretations that have been issued but are not yet effective:
Standard or Interpretation Effective for annual periods commencing on or after
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current 1 January 2024
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting 1 January 2023
Policies
1 January 2023
Amendments to IAS 8: Definition of Accounting Estimates
1 January 2023
Amendments to IAS 12: Deferred Tax Related to Assets and Liabilities arising
from a Single Transaction.
As yet, none of these have been endorsed for use in the United Kingdom (UK)
and will not be adopted until such time as endorsement is confirmed. The
Directors do not expect any material impact as a result of adopting the
standards and amendments listed above in the financial year, as and when they
become effective.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
2.2 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
those of the Group. All intra-Group transactions, balances, income and
expenses are eliminated on consolidation.
2.3 REVENUE RECOGNITION
The Company and Group operate weekly competitions to win luxury cars and other
prizes online. Revenue represents the value of tickets sold in respect of
these competitions and is stated net of VAT, where applicable, and returns,
rebates and discounts. Revenue in respect of weekly competitions is
recognised on the date the result of those individual competitions is
determined, being the point when all performance obligations have been
fulfilled.
2.4 COST OF SALES
Cost of sales comprises principally of the cost of competition prizes, duties,
rent and historically the associated costs of operating retail sites.
2.5 SEGMENT REPORTING
The accounting policy for identifying segments is based on internal management
reporting information which is reviewed by the chief operating decision
maker. The Company and Group are considered to have a single business
segment, being the operation of weekly competitions to win luxury cars and
other prizes.
2.6 RESEARCH AND DEVELOPMENT EXPENDITURE
Expenditure on research is recognised as an expense in the period in which it
is incurred.
Development costs are capitalised when all of the following conditions are
satisfied:
· Completion of the intangible asset is technically feasible so
that it will be available for use or sale;
· The Company or Group intends to complete the intangible asset and
use or sell it;
· The Company or Group has the ability to use or sell the
intangible asset;
· The intangible asset will generate probable future economic
benefits. Amongst other things, this requires that there is a market for the
output from the intangible asset or for the intangible asset itself, or, if it
is to be used internally, the asset will be used in generating such benefits;
· There are adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset; and
· The expenditure attributable to the intangible asset during its
development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as
incurred.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
2. PRINCIPAL ACCOUNTING POLICIES (continued)
2.7 FOREIGN CURRENCIES
Assets and liabilities in foreign currencies are translated into Sterling at
the rates of exchange ruling at the statement of financial position date.
Transactions in foreign currencies are translated into Sterling at the rates
of exchange ruling at the date of the transaction. Exchange differences are
taken into account in arriving at the operating result.
The assets and liabilities in the financial statements of foreign subsidiaries
are translated into the Parent Company's presentation currency at the rates of
exchange ruling at the statement of financial position date. Income and
expenses are translated at the actual rate on the date of the transaction.
The exchange differences arising from the retranslation of the opening net
investment in subsidiaries are recognised in other comprehensive income and
taken to the foreign exchange reserve in equity. On disposal of a foreign
subsidiary, the cumulative translation differences are transferred to profit
or loss as part of the gain or loss on disposal.
2.8 SHARE BASED PAYMENT
The Company and Group have applied the requirements of IFRS 2 to share option
schemes allowing certain employees within the Group to acquire shares of the
Company. For all grants of share options, the fair value as at the date of
grant is calculated using the Black-Scholes option pricing model, taking into
account the terms and conditions upon which the options were granted. The
amount recognised as an expense is adjusted to reflect the actual number of
share options that are likely to vest, except where forfeiture is only due to
market-based conditions not achieving the threshold for vesting. The expense
is recognised over the expected life of the option.
2.9 PENSION CONTRIBUTIONS AND OTHER POST EMPLOYMENT BENEFITS
The Company operates a money purchase pension scheme for certain employees.
The cost of the contributions is charged to the statement of comprehensive
income as incurred.
2.10 TAXATION
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantively enacted by the statement of financial position date.
The tax currently payable is based on the taxable profit for the year.
Taxable profit/(loss) differs from the net profit/(loss) reported in the
statement of comprehensive income as it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which the deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary differences arise from the initial recognition
(other than in a business combination) of other assets or liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of the deferred tax asset is reviewed at each statement of
financial position date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset is realised. Deferred tax
is charged or credited in the statement of comprehensive income, except when
it relates to items charged or credited directly to equity, in which case
deferred tax is also dealt with in equity.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
2. PRINCIPAL ACCOUNTING POLICIES (continued)
2.11 IMPAIRMENT
The carrying amounts of the Company's and the Group's assets are reviewed at
each statement of financial position date to determine whether there is any
indication of impairment. If any such indicator exists, the asset's
recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. Impairment losses are recognised in the
statement of comprehensive income.
The recoverable amount of an asset is the greater of its net selling price and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
the current market assessments of the time value of money and the risks
specific to the asset.
An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation and
amortisation, if no impairment loss had been recognised.
2.12 CURRENT VERSUS NON-CURRENT CLASSIFICATION
The Company and Group present assets and liabilities in the statement of
financial position based on current/non-current classification. An asset is
current when it is:
· Expected to be realised or intended to be sold or consumed in the
normal operating cycle; or
· Held primarily for the purpose of trading; or
· Expected to be realised within twelve months after the reporting
period; or
· Cash or cash equivalents unless restricted from being exchanged
or used to settle a liability for at least twelve months after the reporting
date.
All other assets are classified as non-current.
A liability is current when:
· It is expected to be settled in the normal operating cycle; or
· It is held primarily for the purpose of trading; or
· It is due to be settled within twelve months after the reporting
period; or
· There is no unconditional right to defer the settlement of the
liability for at least twelve months after the reporting date.
The Company and Group classify all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and
liabilities.
2.13 INTANGIBLE ASSETS
Intangible assets are recognised at cost less any accumulated amortisation and
impairment.
An intangible asset, which is an identifiable non-monetary asset without
physical substance, is recognised to the extent that it is probable that the
expected future economic benefits attributable to the asset will flow to the
Company or Group and that its cost can be measured reliably. The asset is
deemed to be identifiable when it is separate or when it arises from
contractual or other legal rights.
The Company's and Group's intangible assets consist of its IT platform,
infrastructure and website. The Directors have estimated the useful economic
life of the assets to be three years and they are being amortised over that
period on a straight line basis.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
2. PRINCIPAL ACCOUNTING POLICIES (continued)
2.14 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any.
Depreciation is provided at the following annual rates in order to write off
each asset over its useful economic life:
Long leasehold
property -
1% on cost
Improvements to
property - 4% on
cost
Display
equipment
- At varying rates on cost
Fixtures and
fittings
- At varying rates on cost
Motor
vehicles
- 25% on reducing balance
Computer
equipment
- At varying rates on cost
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected from the use or disposal. Any gain
or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is
included in the statement of comprehensive income when the asset is
derecognised.
The residual values, useful economic lives and methods of depreciation are
reviewed at each financial year end and adjusted prospectively, if
appropriate.
2.15 INVESTMENTS
Investments in subsidiaries and unlisted investments are recorded at cost less
any provision for permanent diminution in value.
2.16 LEASES
At year end the Group has no leases within the scope of IFRS16. The cost of
leases of low value items and those with a term of less than one year at
inception are recognised as incurred.
2.17 PROVISIONS
Provisions are liabilities where the exact timing or amount of the obligation
is uncertain. Provisions are recognised when the Company or Group has a
present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Where the time value of money is material,
provisions are discounted to current values using appropriate rates of
interest. The unwinding of the discounts is recorded in net finance income
or expense.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
2. PRINCIPAL ACCOUNTING POLICIES (continued)
2.18 FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised in the Company's and Group's
statement of financial position when the Company and Group becomes a party to
the contractual provisions of the instrument. The Company's and Group's
financial instruments comprise cash, trade and other receivables and trade and
other payables.
Trade and other receivables
Trade and other receivables are initially stated at their fair value plus
transaction costs, then subsequently at amortised cost using the effective
interest method, if applicable, less impairment losses. Provisions against
trade and other receivables are made when there is objective evidence that the
Company and Group will not be able to collect all amounts due to them in
accordance with the original terms of those receivables. The amount of the
write down is determined as the difference between the asset's carrying amount
and the present value of estimated future cash flows.
Cash and cash equivalents
The Company and Group manage short-term liquidity through the holding of cash
and highly liquid interest-bearing deposits. Only deposits that are readily
convertible into cash with maturities of three months or less from inception,
with no penalty of lost interest, are shown as cash and cash equivalents.
Trade payables
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Company and Group becomes a party to the
contractual provisions of the instrument. All financial liabilities are
recorded at amortised cost using the effective interest method, with
interest-related charges recognised as an expense in finance cost in the
statement of comprehensive income.
2.19 EQUITY
Equity comprises the following:
· Called up share capital represents the nominal value of the
equity shares;
· Share premium represents the excess over nominal value of the
fair value of consideration received from the equity shares, net of expenses
of the share issue;
· Capital redemption reserve represents the value of the
re-purchase by the Company of its own share capital;
· Foreign exchange reserve represents accumulated exchange
differences from the translation of subsidiaries with a functional currency
other than Sterling; and
· Retained earnings represent accumulated profits and losses from
incorporation and any credit arising under share-based payments
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
3. CAPITAL MANAGEMENT
The Company defines capital as the total equity of the Company. The
objective of the Company's capital management is to ensure that it makes the
maximum use of its capital to support its business and to maximise shareholder
value. There are no external constraints on the Company's capital.
4. CRITICAL JUDGEMENTS AND ACCOUNTING ESTIMATES
The Company and Group make certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. In the
future, actual expenditure may differ from these estimates and assumptions.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Impairment of assets
The Company and Group are required to consider assets for impairment where
such indicators exist, using value in use calculations or fair value
estimates. The use of these methods may require the estimation of future
cash flows and the choice of a discount rate in order to calculate the present
value of the cash flows. Actual outcomes may vary.
Useful lives of property, plant and equipment and intangible assets
Property, plant and equipment are depreciated, and intangible assets are
amortised over their useful lives. Useful lives are based on management's
estimates, which are periodically reviewed for continued appropriateness.
Changes to estimates can result in variations in the carrying values and
amounts charged to the statement of comprehensive income in specific periods.
5. SEGMENTAL REPORTING
For management purposes, the Company and Group are considered to have one
single business segment, being the operation of weekly competitions to win
luxury cars and other prizes. The Group comprises Best of the Best PLC and
its subsidiary company BOTB Ireland Limited. BOTB Ireland Limited generated
no sales during either the current or prior year and it holds no assets and is
expected to have very little trading activity going forward. The two
companies do not transact with each other. Further segment information is
therefore not presented in these financial statements.
Sales from UK activities totalled £23,582,704 (2022: £31,422,000) whilst
sales from non-UK activities totalled £2,567,944 (2022:
£3,260,000).
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
6. EMPLOYEES AND DIRECTORS
Group Company
2023 2022 2023 2022
£000 £000 £000 £000
Wages and salaries 1,709 2,267 1,709 2,267
Social security costs 204 262 204 262
Other pension costs 47 22 47 22
1,960 2,551 1,960 2,551
The average monthly number of employees during the year, including the
Directors, was as follows:
Group Company
2023 2022 2023 2022
Number Number Number Number
Sales 10 9 10 9
Administration 9 9 9 9
Management 7 4 7 4
26 22 26 22
2023 2022
£000 £000
Directors' remuneration 862 819
The number of Directors to whom retirement benefits were accruing was as
follows:
2023 2022
Number Number
Money purchase schemes 3 3
The Directors consider themselves to be the only key management personnel.
As such, a separate analysis of remuneration paid to key management personnel
has not been presented.
Information regarding the highest paid Director is as follows:
2023 2022
£000 £000
Emoluments 340 338
7. FINANCE INCOME
2023 2022
£000 £000
Finance income:
Deposit account interest 39 2
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
8. PROFIT BEFORE INCOME TAX
The profit before income tax is stated after charging/(crediting):
2023 2022
£000 £000
Depreciation and impairment of property, plant and equipment 36 46
Amortisation of intangible assets 66 53
Foreign exchange (gains) / losses (1) 8
Auditor's remuneration
Audit fees 42 40
Taxation services 3 3
Other 10 10
9. INCOME TAX
Analysis of tax expense
2032 2022
£000 £000
Current tax:
Current year charge 965 865
Release of prior year overprovision (185) -
Total current tax 780 865
Deferred tax
Changes in tax rates 7 12
Total deferred tax 7 12
Total tax charge for the year 787 877
Factors affecting the tax expense
The tax assessed for the year is lower than the standard rate of corporation
tax in the UK. The difference is explained below:
2023 2021
£000 £000
Profit on ordinary activities before income tax 5,448 5,141
Profit on ordinary activities multiplied by the effective rate of corporation
tax in the UK of 19.5% (2022: 19%) 1,062 977
Effects of:
Changes in tax rates 7 -
Other timing differences - 24
Research and development enhanced deduction (97) (124)
Reversal of prior year overprovision (185) -
Tax expense 787 877
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
10. PROFIT OF THE PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of
the Parent Company is not presented as part of these financial statements.
The parent Company's profit for the financial year was £4,661,000 (2022:
£4,270,000).
11. 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 exercise of all
dilutive potential ordinary shares under the Company's share option plans.
2023 2022
£000 £000
Profit for the year and basic and diluted earnings attributable to the
owners of the parent - £000 4,661 4,264
Weighted average number of ordinary shares - number 8,559,007 9,412,901
Basic earnings per share - pence 54.46p 45.30p
Adjusted weighted average number of ordinary shares - number 8,675,381 9,532,901
Diluted earnings per share - pence 53.73p 44.37p
12. DIVIDENDS
A final dividend of 6.0 pence per ordinary share for the full year ending 30
April 2022 was paid on 22 September 2022 to shareholders on the register at 16
September 2022.
13. INTANGIBLE ASSETS - GROUP AND COMPANY
Development costs
£000
COST
At 1 May 2022 475
Additions 48
At 30 April 2023 523
AMORTISATION
At 1 May 2022 368
Charge for year 66
At 30 April 2023 434
NET BOOK VALUE
2023 89
2022 107
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
13. INTANGIBLE ASSETS - GROUP AND COMPANY (continued)
Development costs
£000
COST
At 1 May 2021 475
At 30 April 2022 475
AMORTISATION
At 1 May 2021 315
Charge for year 53
At 30 April 2022 368
NET BOOK VALUE
2022 107
2021 160
14. PROPERTY, PLANT AND EQUIPMENT - GROUP AND COMPANY
Long leasehold Improvements to property Display
equipment
£000 £000 £000
COST
At 1 May 2022 954 55 103
At 30 April 2023 954 55 103
DEPRECIATION AND IMPAIRMENT
At 1 May 2022 22 5 77
Charge for the year 1 1 -
At 30 April 2023 23 6 77
NET BOOK VALUE
2023 931 49 26
2022 932 50 26
Motor vehicles Computer equipment
Total
£000 £000 £000
COST
At 1 May 2022 155 202 1,469
Additions 65 6 71
Disposals (160) - (160)
At 30 April 2023 60 208 1,380
DEPRECIATION AND IMPAIRMENT
At 1 May 2022 108 182 394
Charge for the year 17 17 36
Eliminated on disposal (95) - (95)
At 30 April 2023 30 199 335
NET BOOK VALUE
2023 30 9 1,045
2022 47 20 1,075
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
14. PROPERTY, PLANT AND EQUIPMENT - GROUP AND COMPANY (continued)
Long leasehold Improvements to property Display
equipment
£000 £000 £000
COST
At 1 May 2021 954 55 103
At 30 April 2022 954 55 103
DEPRECIATION AND IMPAIRMENT
At 1 May 2021 18 5 77
Charge for the year 4 - -
At 30 April 2022 22 5 77
NET BOOK VALUE
2022 932 50 26
2021 936 50 26
Motor vehicles Computer equipment
Total
£000 £000 £000
COST
At 1 May 2021 155 184 1,451
Additions - 18 18
At 30 April 2022 155 202 1,469
DEPRECIATION AND IMPAIRMENT
At 1 May 2021 92 156 348
Charge for the year 16 26 46
At 30 April 2022 108 182 394
NET BOOK VALUE
2022 47 20 1,075
2021 63 28 1,103
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
15. INVESTMENTS
Group
Unlisted investments
£000
COST
At 1 May 2022 and 30 April 2023 70
IMPAIRMENT
At 1 May 2022 and 30 April 2023 70
NET BOOK VALUE
At 1 May 2022 and 30 April 2023 -
Unlisted investments relate to the cost of acquiring options in another
company.
Company
Shares in group undertakings
Unlisted investments
Total
£000 £000 £000
COST
At 1 May 2022 and 30 April 2023 - 70 70
IMPAIRMENT
At 1 May 2022 and 30 April 2023 - 70 70
NET BOOK VALUE
At 1 May 2022 and 30 April 2023 - - -
Shares in Group undertakings comprise of the following subsidiary company:
Name of company Nature of business % holding Country of incorporation
BOTB Ireland Limited Competition operator 100 Republic of Ireland
BOTB Ireland Limited registered office is Suite 3 One Earlsfort Centre, Lower
Hatch Street, Dublin 2, Ireland
The subsidiary had previously ceased trading and consequently the Board took
the decision to formally strike off the company, which was completed in
September 2022.
16. TRADE AND OTHER RECEIVABLES - GROUP AND COMPANY
Group Company
2023 2022 2023 2022
£000 £000 £000 £000
Trade receivables 23 13 23 13
Other receivables 20 46 20 46
Prepayments and accrued income 170 125 170 125
213 184 213 184
The fair value of trade and other receivables approximates to their carrying
values.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
17. CASH AND CASH EQUIVALENTS - GROUP AND COMPANY
Group Company
2023 2022 2023 2022
£000 £000 £000 £000
Bank accounts 6,899 10,817 6,899 10,817
Cash in hand 1 1 1 1
6,900 10,818 6,900 10,818
18. CALLED UP SHARE CAPITAL - COMPANY
Allotted, issued and fully paid 2023 2022 2023 2022
Ordinary shares of 5 pence each Number Number £000 £000
At the start of the year 9,412,901 9,412,901 471 471
Purchased for cancellation in the year (1,045,877) - (53) -
At the end of the year 8,367,024 9,412,901 418 471
1,045,877 Ordinary shares of £0.05 per share were re-purchased by the company
and subsequently cancelled. An amount equal to the nominal value of the
ordinary shares has been transferred to the capital redemption reserve. The
amount paid per share was £6. The difference between the amount paid and the
nominal value of the shares re-purchased has been deducted from the retained
earnings reserve.
19. TRADE AND OTHER PAYABLES - GROUP AND COMPANY
Group Company
2023 2022 2023 2022
£000 £000 £000 £000
Trade creditors 165 309 165 309
Social security and other taxes 193 503 193 503
Other creditors 1,351 2,456 1,351 2,456
Contract liability balances 39 353 39 353
Pension creditor 6 4 6 4
1,754 3,625 1,754 3,625
20. DEFERRED TAX - GROUP AND COMPANY
Group Company
2023 2022 2023 2022
£000 £000 £000 £000
Liability at 1 May (24) (14) (24) (14)
Movement in the year (8) (10) (8) (10)
Liability at 30 April (32) (24) (32) (24)
Deferred tax liabilities and assets have been recognised in respect of
accelerated capital allowances giving rise to deferred tax liabilities and
assets where the Directors believe that it is probable that these liabilities
will fall due and assets will be recovered.
BEST OF THE BEST PLC
Notes to the Preliminary Announcement (continued)
For The Year Ended 30 April 2023
21. SHARE BASED PAYMENT - GROUP AND COMPANY
Details of the share options outstanding during the year are as follows:
Outstanding at 1 May 2022 Number Outstanding at 30 April 2023 Number
Grant date Granted Exercised Forfeited Expiry date Exercise price £
19-12-2017 9,352 - - - 9,352 19-12-2027 2.25
28-02-2020 85,000 - - - 85,000 28-02-2030 3.85
19-07-2020 10,000 - - - 10,000 19-07-2030 16.00
19-09-2020 5,000 - - - 5,000 19-09-2030 18.00
23-11-2021 84,000 - - - 84,000 23-11-2031 7.10
The Company and Group operate a share option scheme for certain Directors and
employees. Options are exercisable at a price defined by the individual
option agreements. The vesting period on each option is three years. If
the options remain unexercised during the specified period from the date of
grant, the options expire. Options are generally forfeited if the employee
leaves the Group before the options vest, however, this is at the discretion
of the Board.
Details of the share options and the weighted average exercise price ('WAEP')
outstanding during the year are as follows:
2023 2023 2022 2022
Number WAEP Number WAEP
Outstanding at the beginning of year 193,352 6.17 109,352 5.47
Granted during the year - - 84,000 7.10
Outstanding at the end of the year 193,352 6.17 193,352 6.17
Exercisable at the end of the year 94,352 3.69 9,352 2.25
The weighted average remaining contractual life of share options outstanding
as at 30 April 2023 was 7 years and 6 months (2022: 8 years and 4 months).
No amount has been recognised in these financial statements in respect of
share option charges as the amount would be insignificant (2022: £Nil).
BEST OF THE BEST PLC
Notes to the Financial Statements (continued)
For The Year Ended 30 April 2023
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS - GROUP AND COMPANY
The principal financial assets of the Group are bank balances. The Group's
principal financial liabilities are trade and other payables. The main
purpose of these financial instruments is to generate sufficient working
capital for the Group to continue its operations. The Group's financial assets
and liabilities are all measured at amortised cost and so no fair value
disclosures are required.
Credit risk
The Group's exposure to credit risk is limited to the carrying amounts of
financial assets recognised at the statement of financial position date, as
summarised below. Management considers that the Group is exposed to little
credit risk arising on its receivables due to the value of those
receivables. The credit risk on cash balances is limited because the third
parties are banks with high credit ratings assigned by international credit
rating agencies.
2023 2022
£000 £000
Financial assets classified as loans and receivables - carrying amounts:
Trade receivables 23 13
Other receivables 190 171
Cash and cash equivalents 6,900 10,818
7,113 11,002
Liquidity risk
The Group's funding strategy is to generate sufficient working capital to
settle liabilities as they fall due and to ensure sufficient financial
resource is in place to support management's long-term growth plans.
The Group's financial liabilities have contractual maturities as follows:
2023 2022
£000 £000
Financial liabilities- carrying amounts Up to 1 year Up to 1 year
Trade and other payables 1,715 3,272
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