REG - Best of the Best PLC - Half-year Report
26/01/2023 07:00
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RNS Number : 8961N Best of the Best PLC 26 January 2023
Best of the Best plc
("Best of the Best", "BOTB", "the Company" or "the Group")
Interim results for the six months ended 31 October 2022
Best of the Best plc (LSE: BOTB), the provider of online competitions to win
cars and other prizes, is pleased to report its interim results for the half
year ended 31 October 2022 (the "Period").
Financial highlights:
· Revenue of £13.65 million (H1 2021 £19.12m), significantly
greater than the £7.60 million delivered pre-pandemic in H1 2020, the most
appropriate comparative period
· Profit before tax of £2.71 million (H1 2021: £3.04 million),
again greater than the £1.38 million generated in H1 2020
· Earnings per share 27.95p (H1 2021: 27.26p)
· Following the normal attrition profile of the very large cohort
of customers acquired during the pandemic, player numbers have now stabilised
and the business is well placed for a return to steady growth
· Strong financial position with cash balances of £5.26 million as
at 31 October 2022 (H1 2021: £8.34million), following the return of £6.75
million to shareholders via a tender offer and dividend in the Period. The
Group is debt free.
William Hindmarch, Chief Executive, said:
"I am pleased that the business has stabilised following both the unusual
pandemic period and subsequent post-Covid trading as the world has returned to
normal, albeit with inflationary pressures and the consumer spending
squeeze. The very large cohort of customers acquired during the pandemic
period has exhibited the normal attrition profile, and with this comparative
headwind behind us, player numbers are well placed for a return to growth.
As previously reported, we have refocused our competition line-up after a
successful trial in the summer to address shifting consumer behaviour, which
has had the intended effect of reducing revenue but enhancing our already
strong profit margins. Revenue for the period was nevertheless almost double
the pre-pandemic level.
Trading since the period end has continued in line with our expectations. BOTB
is underpinned by solid financials, a large and loyal customer base, and a
proven business model. We are excited by the business development
opportunities resulting from the Globe Invest relationship and look forward to
the future with confidence."
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
Jack Devoy
finnCap Corporate Finance T: 020 7220 0500
(Nominated Adviser and Broker) Carl Holmes
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 2022 was £13.65 million (H1 2021:
£19.12 million) and profit before tax was £2.71 million (H1 2021: £3.04
million). Earnings per share were 27.95p (H1 2021: 27.26p).
BOTB remains strongly cash generative. Net assets at 31 October 2022 stood at
£3.73 million underpinned by cash balances at the period end of £5.26
million (H1 2021: £8.34m) following the return of £6.75 million to
shareholders via a tender offer in July 2022 and an ordinary dividend in
October 2022. The Group is debt free.
Strategy, Competitions & GIL Investment
As previously reported, in order to put the business in a better position for
the reduced levels of revenue post-pandemic we have made changes to the
product line-up, re-balancing our three principal weekly competitions - to two
enhanced ones with an additional 'Friday Fun' competition under trial. We
are pleased with the results of these changes, which have enhanced margins and
make the business better operationally geared for future increases in revenue.
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 Period we progressed trials to gain customer insights into
frequency and 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.
As already announced Globe Invest Limited ("GIL") acquired a 29.9% strategic
shareholding in BOTB on 8 September 2022. Since the successful
transformation of BOTB from a bricks and mortar operator to an online pureplay
in the skill-based competition space, the Board of BOTB was actively
considering its options for international expansion and delivering its product
set to a wider audience. After much consideration, the Board concluded that
the most effective way to deliver and achieve this next level of growth, and
therefore the most efficient way to create value for shareholders, was by way
of a partnership agreement with an established global operator. GIL has a
number of affiliated entities which have an extensive international presence
covering content, digital marketing and software development sectors in
particular, as well as a proven track record of growing global B2C and B2B
businesses.
Following the current period of information sharing and close collaboration,
BOTB and GIL intend to enter into a Licensing and Distribution Agreement and a
Marketing and Collaboration Agreement through which GIL will provide the
business with the operational expertise and reach to execute a global
strategy, whilst further leveraging BOTB's existing database and building upon
the strong foundations that we have created. This is a great opportunity and
further updates on the progress with GIL will be made in due course, when the
Licensing and Distribution Agreement and a Marketing and Collaboration
Agreement has been finalised and the optimal structure has been decided.
Marketing and CRM
With an addressable marketing database of 1.9m, the business continues to
offer a diverse promotional schedule featuring a variety of prizes to engage
existing and reactivate lapsing players. The weekly selection caters to all
player cohorts with a wide range of ticket prices and includes prize bundles
such as a car plus luxury watch, bills paid for a year and cash sums.
The new CRM platform is now fully integrated, providing a single customer view
and allowing appropriate communications via email and push messaging, as well
as personalised on-site content and retargeting campaigns on Meta and Google
channels.
App uptake has continued to grow and now accounts for 25% of weekly players
and revenue. We expect this number to increase moving forward with the 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 wider
promotion of both iOS and Android apps across all of our marketing, including
incentives to download.
Customer acquisition during the Period focused on the best-performing digital
channels, complemented by traditional TV media and the PR coverage generated
by our winner surprises. We continue to see the benefits of our ongoing SEO
marketing, with improving organic results allowing us to reduce spend on paid
search to drive traffic to the website.
More recently, CPMs on Meta channels have started to return towards pre-Covid
levels, allowing for more efficient player acquisition, particularly for the
Midweek Lifestyle Competition where the wide-ranging prize offering is
attracting a broader pool of players.
Looking ahead, a new TV commercial is launching in February 2023, a bespoke
tracking and optimisation platform developed by GIL is being road-tested and
we continue to explore new channels to market - TikTok in particular is a
focus.
Outlook
Whilst successive lockdowns and the unusual pandemic period set a high bar for
comparing our recent performance, I am pleased that following a period of
pandemic cohort attrition and subsequent stabilisation, 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 have also shown
how quickly we can as a business respond to changes in the market and shifting
revenue trends with careful cost control and discipline to preserve margins
and cash generation.
Having exhibited the benefits of BOTB's operational gearing during the
financial year ended April 2021, the Board remains fully focused on
re-harnessing this opportunity by focusing on only the most efficient channels
of customer acquisition, through product development and by seeking additional
revenue streams as a result of the developing relationship with GIL and its
associated group companies.
We look to the medium and long term with confidence as we push towards a
return to steady growth and trading since the period end has continued in line
with our expectations.
The Board is excited about the opportunities that lie ahead for BOTB, in
particular the collaboration with GIL and all the benefits, experience and
international exposure that this will bring.
I look forward to updating shareholders in due course.
William Hindmarch
Chief Executive
BEST OF THE BEST PLC
Unaudited Income Statement
For the Six Months Ended 31 October 2022
Six Months Ended 31/10/22 Unaudited Six Months Ended 31/10/21 Unaudited
Year Ended 30/04/22 Audited
Notes £'000 £'000 £'000
Revenue 2 13,646 19,118 34,682
Cost of sales (5,488) (8,267) (15,272)
GROSS PROFIT 8,158 10,851 19,410
Administrative expenses (5,461) (7,813) (14,271)
OPERATING PROFIT 2,697 3,038 5,139
Finance income 12 - 2
PROFIT BEFORE TAX 2,709 3,038 5,141
Tax 3 (266) (472) (877)
PROFIT FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME 2,566
2,443 4,264
Profit and total comprehensive income attributable to:
Owners of the parent 2,443 2,566 4,264
Profit on earnings per share expressed
in pence per share: 4
Basic from continuing operations 27.95 27.26 45.30
Diluted from continuing operations 27.65 27.06 44.37
BEST OF THE BEST PLC
Unaudited Statement of Financial Position
As at 31 October 2022
_________________________________________________________________________________________________
Six Months Ended 31/10/22 Unaudited Six Months Ended 31/10/21 Unaudited
Year Ended 30/04/22 Audited
£'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Development costs 126 120 107
Property, plant and equipment 1,057 1,087 1,075
1,183 1,207 1,182
CURRENT ASSETS
Trade and other receivables 261 420 184
Cash and cash equivalents 5,262 8,346 10,818
5,523 8,766 11,002
TOTAL ASSETS 6,706 9,973 12,184
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 418 471 471
Share premium 277 277 277
Capital redemption reserve 289 236 236
Foreign exchange reserve 35 29 35
Retained earnings 2,706 5,341 7,041
TOTAL EQUITY 3,725 6,354 8,060
LIABILITIES
CURRENT LIABILITES
Trade and other payables 2,506 3,122 3,625
Tax payable 451 483 475
Provision 24 14 24
TOTAL LIABILITIES 2,981 3,619 4,124
TOTAL EQUITY AND LIABILITIES 6,706 9,973 12,184
BEST OF THE BEST PLC
Unaudited Statement of Changes in Equity
For the Six Months Ended 31 October 2022
_________________________________________________________________________________________________
Called up
share Retained Share
capital earnings premium
Notes
£'000 £'000 £'000
Balance at 471 7,953 277
1 May 2021
Dividends - (5,178) -
Transactions with owners - (5,178) -
Profit for the year - 4,264 -
Exchange differences arising on translating foreign operations
- 2 -
Total comprehensive income - 4,266 -
Balance at 30 April 2022 471 7,041 277
Effect of share (53) (6,276) -
re-purchase
7
Dividends - (502) -
Transactions with owners (53) (6,778) -
Profit for the period - 2,443 -
Total comprehensive income - 2,443 -
Balance at 31 October 2022 418 2,706 277
Capital Foreign
redemption exchange Total
reserve reserves equity
£'000 £'000 £'000
Balance at 1 May 2021 236 27 8,964
Dividends - - (5,178)
Transactions with owners - - (5,178)
Profit for the year - - 4,264
Exchange differences arising on translating foreign operations
- 8 10
Total comprehensive income - - 4,274
Balance at 30 April 2022 236 35 8,060
Share re-purchase 53 - (6,276)
Dividends - - (502)
Transactions with owners 53 - (6,778)
Profit for the period - - 2,443
Total comprehensive income - - 2,443
Balance at 31 October 2022 289 35 3,725
BEST OF THE BEST PLC
Unaudited Statement of Changes in Equity
For the Six Months Ended 31 October 2022
_________________________________________________________________________________________________
Called up
share Retained Share
capital earnings premium
£'000 £'000 £'000
Balance at 1 May 2021 471 7,953 277
Dividends - (5,178) -
Transactions with owners - - -
Profit for the period - 2,566 -
Total comprehensive income - 2,566 -
Balance at 31 October 2021 471 5,341 277
Capital Foreign
redemption exchange Total
reserve reserves equity
£'000 £'000 £'000
Balance at 1 May 2021 236 27 8,964
Dividends - - (5,178)
Transactions with owners - - -
Profit for the period - 2 2,568
Total comprehensive income - - 2,568
Balance at 31 October 2021 236 29 6,354
BEST OF THE BEST PLC
Unaudited Cash Flow Statement
For the Six Months Ended 31 October 2022
________________________________________________________________________________________________
Six Months Ended 31/10/22 Unaudited Six Months Ended 31/10/21 Unaudited
Year Ended 30/04/22 Audited
Cash flows from operating activities Notes £'000 £'000 £'000
Cash generated from operations 6 1,548 3,023 5,905
Tax paid (289) (1,307) (1,707)
Net cash from operating activities 1,259 1,716 4,198
Cash flows from investing activities
Purchase of intangible fixed assets (45) - -
Purchase of tangible fixed assets (4) (6) (18)
Interest received 12 - 2
Net cash from investing activities (37) (6) (16)
Cash flows from financing activities
Share re-purchase (6,276) - -
Equity dividends paid (502) (5,178) (5,178)
Net cash from financing activities (6,778) (5,178) (5,178)
Decrease in cash and cash equivalents (5,556) (3,468) (996)
Cash and cash equivalents at beginning of period 10,818 11,814 11,814
Cash and cash equivalents at end of period 5,262 8,346 10,818
BEST OF THE BEST PLC
Notes to the Interim Financial Statements
For the Six Months Ended 31 October 2022
1. BASIS OF PREPARATION
These condensed interim financial statements are for the six months ended 31
October 2022. They have been prepared with regard to the requirements of
International Financial Reporting Standards as adopted by the UK. 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 2022.
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 2022.
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. TAX
Analysis of the tax
charge
Six Months Ended 31/10/22 Unaudited Six Months Ended 31/10/21 Unaudited Year
Ended 30/04/22 Audited
£'000 £'000 £'000
Current tax:
Current period charge 451 472 865
Overprovision in prior period (185) - -
Deferred tax - - 12
Total tax charge in income statement 266 472 877
BEST OF THE BEST PLC
Notes to the Interim Financial Statements
For the Six Months Ended 31 October 2022
4. 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 31/10/22 Six Months Ended 31/10/21
Unaudited Unaudited Year Ended 30/04/22
Audited
Profit and basic and diluted earnings attributable to the owners of the parent 2,566
2,443 4,264
Weighted average number of ordinary shares 8,744,226 9,412,901 9,412,901
Basic earnings per share 27.95p 27.26p 45.30p
Adjusted weighted average number of ordinary shares 8,838,578 9,483,360 9,532,901
Diluted earnings per share 27.65p 27.06p 44.37p
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.
5. DIVIDENDS
A Special Dividend of 6 pence per ordinary share was paid on 22 September 2022
to shareholders on the register at the close of business on 16 September 2022.
BEST OF THE BEST PLC
Notes to the Interim Financial Statements
For the Six Months Ended 31 October 2022
6. CASH GENERATED FROM OPERATIONS
Six Months Ended 31/10/22 Unaudited Six Months Ended 31/10/21 Unaudited Year
Ended 30/04/22 Audited
£'000 £'000 £'000
Profit before income tax 2,709 3,038 5,145
Depreciation and amortisation charges 48 63 99
Finance income (12) - (2)
Exchange differences - - 8
(Increase) / decrease in trade and other receivables (77) (149) 86
(Decrease) / increase in trade and other payables (1,120) 71 569
1,548 3,023 5,905
7. SHARE RE-PURCHASE
On 6 July 2022, subject to a circular dated 16 June 2022, shareholders
approved a proposed tender offer by finnCap Ltd to purchase Ordinary shares in
the Company up to approximately 11% of the issued share capital at a price of
600 pence per share.
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 £6.00. The difference between the amount paid and
the nominal value of the shares re-purchased has been deducted from the
retained earnings reserve.
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 2022.
The statutory accounts for the financial year ended 30 April 2022 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.
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