Best of the Best plc

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

Interim results for the six months ended 31 October 2020

Best of the Best plc runs competitions online to win cars and other prizes.

Online-only model and efficient marketing investment drive ongoing revenue and profit growth

Financial Highlights: 

Operational Highlights: 

William Hindmarch, Chief Executive, said:

"These strong results reflect our successful move to a pure online model together with our increased confidence in marketing investment as we look to accelerate growth.

Sales momentum since the period end has been encouraging, and we expect pre-tax profits for the full year to be materially ahead of management's expectations. We look forward to updating shareholders with further progress in due course."

Enquiries:

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014  Please visit www.botb.com for further information
 

Chief Executive's Statement

Over the past few years the Company has cautiously but actively reduced the estate of physical sites upon which it was originally established 20 years ago.  Having previously traded from up to twenty-six airport and shopping centre locations, the business has completed its evolution and now operates entirely online.

The financial results for the first half reflect the benefits of our successful transition to an online only model, with a reduced cost base and improved capital efficiency. I am particularly pleased with the smooth and measured way in which this transition has been executed, with no loss of overall revenue or unwelcome exceptional costs. 

With the transition now complete, the Company is benefitting from a very effective and scalable platform from which it can continue to leverage its brand, supplier relationships and the proprietary systems, software and database it has developed.

Whilst growing our investment in new customer acquisition, alongside improving the products and experience we offer existing players, BOTB has invested in increasing the range of competitions and prizes. I am pleased with the growth delivered in the year to date and how well positioned the business is for the future.

Interim Results

Revenue for the six months ended 31 October was £22.09 million (2019: £7.60 million). Profit before tax was £6.80 million (2019: £1.38 million) with earnings per share increasing to 59.84p (2019: 12.40p). 

Net assets at 31 October 2020 stood at £6.75 million underpinned by cash balances at the period end of £11.18 million and our 967-year leasehold office properties in London, valued at £0.95 million. The Group has no borrowings.

Competitions, Strategy & CRM

Both our 'Dream Car' and 'Lifestyle' competitions delivered encouraging results and during the period we have added a new Midweek Car Competition, offering a more focused selection of the most popular lower-priced prizes.  More recently, the ticket prices in our car competitions have been materially reduced and all cars in the Dream Car Competition are now awarded together with £50,000 in cash as standard. 

The Lifestyle Competition, which features luxury watches, motorbikes, holidays, other gadgets/technology and cash prizes, continued to perform well showing the benefits of considered diversification. The wide range of prizes in the Lifestyle Competition, with entry prices starting at just 15p, has also significantly broadened our addressable market.

The weekly 'In The Headlights' edits, our YouTube car reviews and other social channel automotive content continue to provide valuable engagement with players. This activity has recently been bolstered by a new 'Under the Hood' section of the website, showcasing recent car winners and prize collections, in-house car reviews, and other editorial content.

BOTB has built a substantial and valuable database, which not only supports its existing competitions, but also offers interesting opportunities for new products and strategic partnerships, which are currently under review. 

New player acquisition

We continued to invest confidently to attract new customers to our increased range of competitions and content, through a wide array of digital marketing channels, as well as TV, Radio, Print and PR.  Encouraging revenue growth has been delivered by an enlarged in-house marketing team, deploying constantly updated, dynamic and creative content at a granular level across all channels.  This has also delivered increasingly efficient customer acquisition metrics. 

Social media continues to be a core marketing and community channel, driving both customer acquisition and contributing to brand awareness. We now have a Facebook following of over 350,000 alongside 240,000 Instagram users, actively engaged with our unique content.  Traditional media is also used to maximise the Company's exposure to a wide range of demographics, including our 'traditional' airport customer. Investment in print and PR continues to secure frequent coverage of weekly winners and is working well to positively strengthen and promote the BOTB brand.  

All investment in this area is carefully analysed on the cost per acquisition of a new customer, versus their lifetime value. This metric, which is tracked in considerable detail across the various channels, is critical in our decision making on where and how we continue to grow our marketing budget in the year ahead.

IT development

There have been numerous iterative changes to the system architecture and website during the period, all aimed at incremental improvements in the user experience of new and existing customers.  Our in-house team of developers work to a fortnightly deployment schedule with new code being released regularly and consistently, using AB split testing to refine and roll out new functionality.

Also during the period our native iOS App was soft launched, with the native Android app to follow shortly. Our marketing team is poised to promote both of these apps to our customers as a simpler way to enter our competitions with a richer user experience.

Dividends

In line with various previous distributions, as the Company continues to be profitable, cash generative and benefits from a robust balance sheet, the Board is also pleased to declare the return of approximately £3.75 million to shareholders by way of a special dividend (the "Special Dividend") of 40.0p per ordinary share. 

The Special Dividend will be paid on 5^th February 2021 to shareholders on the register at the close of business on 22nd January 2021. The ex-dividend date is 21^st January 2021. Following the payment of the Special Dividend the Company will retain working capital cash balances in excess of £7.0 million, which the Directors consider to be sufficient working capital to fund the Company's activities over the next 12 month period.

Update of FSP

The Company, together with its advisers, remains in ongoing discussions with interested parties from a number of sector verticals and including private equity, who are reviewing information in a data room and having management team meetings. These discussions are continuing despite the renewed constraints of Covid-19, though the related restrictions are naturally impacting the speed of discussions and decision making. The Board wishes to reiterate that there can be no certainty that an offer will be forthcoming or as to the terms of any such offer and looks forward to keeping shareholders updated in due course.

Outlook

The first half of the year has delivered encouraging sales and profits growth, and importantly, we also completed the transition to an online-only business which has driven a step change in growth.  This momentum has continued since the period end and, as a result, the Board now expects full year pre-tax profits to materially exceed management expectations.

With the Group well-positioned for the remainder of the financial year and beyond, the Board remains confident about the prospects for the business. I look forward to updating shareholders with further progress in due course.

William Hindmarch

Chief Executive

14 January 2021