REG - Best of the Best PLC - Half-year Report
19/01/2022 07:05
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220119:nRSS8770Ya&default-theme=true
RNS Number : 8770Y Best of the Best PLC 19 January 2022
Best of the Best plc
("Best of the Best", "BOTB", "the Company" or "the Group")
Interim results for the six months ended 31 October 2021
Best of the Best plc runs competitions online to win cars and other prizes.
Operational gearing, higher customer acquisition costs and increased prizes
have reduced margins on
broadly stable revenues
Key Financials:
· Total revenue for the six months £19.12 million (2020: £22.09
million), in line with management's expectations
· Profit before tax £3.04 million (2020: £6.80 million), in line
with management's expectations
· Earnings per share 27.26p (2020: 59.84p)
· Net assets of £6.35 million (2020: £6.75 million),
substantially underpinned by property and cash
· Strong financial position with cash balances of £8.34 million
(2020: £11.18 million) and no borrowings
Outlook:
· Following a period of stabilisation (albeit at a significantly
higher level than pre Covid), the cost of acquiring players increased by a
further c. 37% in November and December 2021 compared to the prior six month
average, resulting in fewer customer registrations for similar levels of
marketing investment.
· Early January 2022 indications suggest that marketing costs may
be trending back towards levels experienced in the period under review, but
reduced customer acquisition in November and December 2021, together with a
cautious outlook means that we believe our revenues for the full 12 months
will now be £34 - £35 million, with pre-tax profits expected to be £4.25 -
£4.75 million.
· We are a profitable, cash generative business with no debt and a
large and loyal customer base. We will be taking steps to reduce the bottom
line impact of reduced revenues by maintaining a sharp focus on costs, and
prioritising only the most efficient marketing channels.
William Hindmarch, Chief Executive, said:
"We are confident that the business, now operating purely online, is
positioned to grow above the traditional growth rates experienced when
operations were focused on bricks and mortar retail. Our very strong results
last year were driven by material increases in our marketing budget, the
addition of new competitions, prize enhancements and pricing changes,
delivering significant quantities of new customers and traffic to our website,
which our operationally geared business model converted into heightened levels
of profitability. However, it is now also becoming apparent that the
business benefitted more than originally assumed from a tailwind during the
Covid period, whilst much of the country remained in lockdown with restricted
movement, travel, entertainment and other retail opportunities.
Emerging out of lockdowns, we have been faced with very tough comparatives,
however, revenues are running at twice the level of that when we exited our
last physical retail site and completed the transformation to a fully online
business.
During the period under review, the business traded in line with market
expectations as updated in August 2021 and, having exhibited the incredible
benefits of operational gearing during the financial year ended April 2021,
the Board remains fully focused on re-harnessing this opportunity by adjusting
customer acquisition, through product development and by seeking additional
revenue streams.
Whilst we are facing a new set of challenges, we remain a profitable, cash
generative business with no debt and a large and loyal customer base which
remains engaged. Understandably, we will be taking steps to reduce the
bottom line impact of reduced revenues, by maintaining a sharp focus on costs,
and prioritizing the most efficient marketing channels.
We recognise that there is potential volatility ahead, which is evident in our
cautious short-term outlook, but look to the medium and long term with
confidence as we push towards a return to steady growth and more normalised
marketing costs."
Enquiries:
Best of the Best plc William Hindmarch, Chief Executive T: 020 7371 8866
Rupert Garton, Commercial Director
Buchanan Chris Lane T: 020 7466 5000
Toto Berger
Oakvale Capital Daniel Burns T: 0207 580 3838
(Financial Adviser) Kieran Davey
finnCap Corporate Finance T: 020 7220 0500
(Nominated Adviser and Broker) Carl Holmes
Kate Bannatyne
Teddy Whiley
ECM
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
(http://www.botb.com) for further information
Chief Executive's Statement
Interim Results
Revenue for the six months ended 31 October 2021 was £19.12 million (2020:
£22.09 million). Profit before tax was £3.04 million (2020: £6.80 million)
with earnings per share of 27.26p (2020: 59.84p). Net assets at 31 October
2021 stood at £6.35 million underpinned by cash balances at the period end of
£8.34 million and our 967-year leasehold office properties in London, valued
at £0.95 million. The Group has no borrowings.
Strategy, Competitions & CRM
With a principally fixed cost operating model and high levels of operational
gearing, our strategy focuses on increasing revenues, player numbers and
engagement by efficiently recruiting new customers through a variety of
principally digital marketing channels, whilst innovating and improving our
competitions and prizes. Our dedicated in-house marketing team also allocates
significant resources towards CRM, via a range of communications channels and
retention initiatives, to maximise customer LTVs and ROI.
BOTB's customer database and engagement with social media followers have
developed significantly in recent years, supporting existing revenue streams
and providing potential new monetisation opportunities in the future. The
database now stands at 1.8 million contactable customers, with much of our CRM
and customer service carried out via daily content updates on our social media
accounts, mainly Facebook (420,000 followers) and Instagram (300,000
followers).
Our principal competitions are the Weekly Dream Car and Midweek
Competitions. Both offer the opportunity to win brand new cars (from a
choice of up to 200 models) combined with the ability to add up to £50,000 in
cash with your prize. Ticket prices start from just 45p with our largest
prizes valued at c. £250,000.
With tickets from just 25p, the Lifestyle Competition featuring motorbikes,
luxury watches, holidays, top technology and cash prizes, continues to be
popular, addressing a wider non-car market, as well as cross selling to our
core automotive audience.
We take significant time, effort and resources to try and surprise all of our
BOTB winners in person with the car they have won. Together with a film crew,
our presenter Christian Williams travels the length and breadth of the UK to
deliver these surprises, creating compelling and engaging video content,
marketing assets, website and social content. Whilst this has been much
harder to enact in line with Government advice during the various stages of
lockdown and restricted movement, we are pleased to have continued to build
upon our uniquely emotive library of material, whilst celebrating our 600(th)
car winner and a number of other milestones.
New player acquisition
As previously mentioned, the costs of acquiring new customers (CPA) during the
period have increased significantly above pre-pandemic levels (see table
below). This appears to have been driven by a number of market forces,
including the trend that, upon exiting lockdown, most businesses across all
sectors have sought to increase their online marketing budgets in order to
drive market share and to speed up their transition away from traditional
retail. This has, in our experience, enabled channels (e.g. Meta Group -
Facebook & Instagram) to materially increase the cost of advertising
impressions (CPM's) on their platforms.
Calendar Year 2019 2020 2021
3 month average Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
CPA (all-channels) £22.65 £22.08 £17.74 £17.41 £14.77 £12.70 £13.22 £20.69 £21.43 £34.72 £41.29 £50.36
CPM (Facebook) £2.97 £3.78 £4.47 £4.32 £3.33 £3.04 £3.72 £4.58 £4.31 £5.65 £6.07 £6.27
Furthermore, as widely acknowledged during the same period and in line with
many online focused companies, the changes introduced by Apple's iOS14
operating system have undoubtedly reduced the accuracy of our targeting and
thereby the efficiency of our marketing, albeit it is hard to precisely
quantify the effects at this stage.
Whilst a smaller overall contributor to new players, we continue to use a
multitude of other channels beyond social media to acquire customers such as
Influencers, TV and other more traditional forms of advertising.
We are in early-stage discussions about working in partnership with larger
media companies to diversify and broaden our acquisition channels, whilst we
continue to explore possible overseas options and will report on both of these
developments as they materialise. We recognise this to be an important area
of focus in the year ahead and will be allocating resources accordingly.
IT development
Our systems architecture, content management systems, websites and user
experience have continued to benefit from incremental improvements aimed at
both new and existing customers. Our in-house team of developers work to a
fortnightly deployment schedule with new code being released regularly and
consistently, to roll out new functionality. Most recently we have undertaken
a major upgrade of our Umbraco CMS, allowing increased flexibility and
automation of competition management, pricing, and new product development.
Our CRM is substantially driven by our email marketing program and during the
period we successfully migrated to a new provider Emarsys, which affords us
more sophisticated targeting, segmentation and content personalisation
opportunities going forward. The iOS App is operating as expected, now
accounting for approximately 13% of total revenues.
Outlook
Emerging out of successive lockdowns and the Covid period, we have been faced
with very tough comparatives, however, revenues are running at twice the level
of that when we exited our last physical retail site and completed the
transformation to a fully online business. We are confident that the
business, now operating purely online, is positioned to grow above the
traditional growth rates experienced when operations were focused on bricks
and mortar retail.
During the period under review, the business traded in line with the market
expectations as updated in August 2021 and, having exhibited the incredible
benefits of operational gearing during the financial year ended April 2021,
the Board remains fully focused on re-harnessing this opportunity by adjusting
customer acquisition, through product development and by seeking additional
revenue streams.
Whilst we are facing a new set of challenges, we remain a profitable, cash
generative business with no debt and a large and loyal customer base which
remains engaged. Understandably, we will be taking steps to reduce the
bottom line impact of reduced revenues, by maintaining a sharp focus on costs,
and prioritizing the most efficient marketing channels.
We recognise that there is potential volatility ahead, which is evident in our
cautious short term outlook, but look to the medium and long term with
confidence as we push towards a return to steady growth.
I look forward to updating shareholders in due course.
William Hindmarch
Chief Executive
BEST OF THE BEST PLC
Unaudited Consolidated Income Statement
For the Six Months Ended 31 October 2021
___________________________________________________________________________________________________
Six Months Ended 31/10/21 Unaudited Six Months Ended 31/10/20 Unaudited
Year Ended 30/04/21 Audited
Notes £'000 £'000 £'000
Revenue 2 19,118 22,088 45,681
Cost of sales (8,267) (8,206) (17,410)
GROSS PROFIT 10,851 13,882 28,271
Administrative expenses (7,813) (7,083) (14,209)
OPERATING PROFIT 3,038 6,799 14,602
Finance income - 1 1
PROFIT BEFORE TAX 3,038 6,800 14,063
Tax (472) (1,188) (2,569)
PROFIT FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME 2,566 5,612
11,494
Profit and total comprehensive income attributable to:
Owners of the parent 2,566 5,612 11,494
Profit on earnings per share expressed
in pence per share: 3
Basic from continuing operations 27.26 59.84 122.52
Diluted from continuing operations 27.06 59.39 121.82
BEST OF THE BEST PLC
Unaudited Consolidated Statement of Financial Position
As at 31 October 2021
_________________________________________________________________________________________________
Six Months Ended 31/10/21 Unaudited Six Months Ended 31/10/20 Unaudited
Year Ended 30/04/21 Audited
Notes £'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Development costs 120 157 160
Property, plant and equipment 1,087 1,098 1,103
Deferred tax - - -
1,207 1,255 1,263
CURRENT ASSETS
Trade and other receivables 420 105 271
Cash and cash equivalents 8,346 11,183 11,814
8,766 11,288 12,085
TOTAL ASSETS 9,973 12,543 13,348
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 471 469 471
Share premium 278 199 277
Capital redemption reserve 237 237 236
Foreign exchange reserve 27 20 27
Retained earnings 5,341 5,824 7,953
TOTAL EQUITY 6,354 6,749 8,964
LIABILITIES
CURRENT LIABILITES
Trade and other payables 3,122 4,610 3,053
Tax payable 483 1,184 1,317
Provision 14 - 14
TOTAL LIABILITIES 3,619 5,794 4,384
TOTAL EQUITY AND LIABILITIES 9,973 12,543 13,348
BEST OF THE BEST PLC
Unaudited Consolidated Statement of Changes in Equity
For the Six Months Ended 31 October 2021
Called up
share Retained Share
capital earnings premium
£'000 £'000 £'000
Balance at 1 May 2020 469 2,369 199
Issue of share capital 2 - 78
Dividends - (5,910) -
Transactions with owners - - -
Profit for the year - 11,494 -
Total comprehensive income - 11,494 -
Balance at 30 April 2021 471 7,953 277
Dividends - (5,178) -
Transactions with owners - - 1
Profit for the period - 2,566 -
Total comprehensive income - 2,566 -
Balance at 31 October 2021 471 5,341 278
Capital Foreign
redemption exchange Total
reserve reserves equity
£'000 £'000 £'000
Balance at 1 May 2020 236 27 3,300
Issue of share capital - - 80
Dividends - - (5,910)
Transactions with owners - - -
Profit for the year - - 11,494
Total comprehensive income - - 11,494
Balance at 30 April 2021 236 27 8,964
Dividends - - (5,178)
Transactions with owners - - 1
Profit for the period 1 - 2,567
Total comprehensive income - - 2,566
Balance at 31 October 2021 237 27 6,354
BEST OF THE BEST PLC
Unaudited Consolidated Statement of Changes in Equity
For the Six Months Ended 31 October 2021
Called up
share Retained Share
capital earnings premium
£'000 £'000 £'000
Balance at 1 May 2020 469 2,369 199
Dividends - (2,157) -
Transactions with owners
Profit for the period - 5,612 -
Total comprehensive income - 5,612 -
- - -
Balance at 31 October 2020 469 5,824 199
Capital Foreign
redemption exchange Total
reserve reserves Equity
£'000 £'000 £'000
Balance at 1 May 2020 237 26 3,300
Dividends - - (2,157)
Transactions with owners - - -
Profit for the period - (6) 5,606
Total comprehensive income - - 5,606
Balance at 31 October 2020 237 20 6,749
BEST OF THE BEST PLC
Unaudited Consolidated Cash Flow Statement
For the Six Months Ended 31 October 2021
________________________________________________________________________________________________
Six Months Ended 31/10/21 Unaudited Six Months Ended 31/10/20 Unaudited
Year Ended 30/04/21 Audited
Cash flows from operating activities Notes £'000 £'000 £'000
Cash generated from operations 5 3,022 8,697 14,270
Tax paid (1,307) (455) (1,686)
Net cash from operating activities 1,715 8,242 12,584
Cash flows from investing activities
Purchase of intangible fixed assets - (78) (84)
Purchase of tangible fixed assets (6) (35) (67)
Sale of tangible fixed assets - - -
Interest received - 1 1
Net cash from investing activities (6) (112) (150)
Cash flows from financing activities
Share issue - - 80
Equity dividends paid (5,177) (2,157) (5,910)
Net cash from financing activities (5,177) (2,157) (5,830)
Increase in cash and cash equivalents (3,468) 5,973 6,604
Cash and cash equivalents at beginning of period 11,814 5,210 5,210
Cash and cash equivalents at end of period 8,346 11,183 11,814
BEST OF THE BEST PLC
Notes to the Interim Financial Statements
For the Six Months Ended 31 October 2021
1. BASIS OF PREPARATION
These condensed interim financial statements are for the six months ended 31
October 2021. 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 2021.
The Group is listed on the AIM market 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 2021.
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 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.
Six Months Ended 31/10/21 Six Months Ended 31/10/20
Unaudited Unaudited Year Ended 30/04/21
Audited
Profit and basic and diluted earnings attributable to the owners of the parent 2,566 11,494
5,611
Weighted average number of ordinary shares 9,412,901 9,377,253 9,381,253
Basic earnings per share 27.26 59.84p 122.52
Adjusted weighted average number of ordinary shares 9,482,360 9,448,550 9,435,186
Diluted earnings per share 27.06 59.39p 121.82
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.
4. DIVIDENDS
A Special Dividend of 50.0 pence per ordinary share was paid on 2 July 2021 to
shareholders on the register at the close of business on 1 July 2021.
A final dividend of 5.0 pence per ordinary share for the full year ending 30
April 2021 was paid on 01 October 2021 to shareholders on the register at 17
September 2021.
BEST OF THE BEST PLC
Notes to the Interim Financial Statements
For the Six Months Ended 31 October 2021
5. CASH GENERATED FROM OPERATIONS
Six Months Ended 31/10/21 Unaudited Six Months Ended 31/10/20 Unaudited Year
Ended 30/04/21 Audited
£'000 £'000 £'000
Profit before income tax 3,038 6,800 14,063
Depreciation and amortisation charges 63 25 55
Finance income - (1) (1)
Decrease / (increase) in trade and other receivables (149) 270 105
Increase / (decrease) in trade and other payables 70 1,603 48
(Decrease) / increase in provisions - - -
3,022 8,697 14,270
8. 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 2021.
The statutory accounts for the financial year ended 30 April 2021 were
prepared under IFRS and in conformity with the requirements of the Companies
Act 2006 applicable to companies reporting under IFRS. These accounts, upon
which the auditor issued an unqualified opinion, did not include references to
any matters to which the auditor 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BIGDBCSBDGDIRecent news on Best Of The Best
See all newsREG - Globe Invest Limited - Offer Closure
AnnouncementREG - AIM - Cancellation - Best of the Best Plc
AnnouncementREG - Velay Financial Best of the Best PLC - Form 8.3 - Best of the Best PLC
AnnouncementREG - Best of the Best PLC - Offer Update
AnnouncementREG - Takeover Panel - Disclosure Table
Announcement