A special dividend is the winning prize at car competition runner Best of the Best (BOTB:AIM), which is continuing to impress investors with its strong balance sheet and growing online business.
The £17 million cap, which sells tickets at airports and online to people hoping to win a luxury car, has announced a special interim dividend of 19.5p which will be paid on 18 March.
Best of the Best says it continues to be both profitable and cash generative and benefits from a strong balance sheet with significant cash reserves. The bullish statement sends the shares 10.8% higher to 195p.
After paying the dividend the group will have cash balances in excess of £1 million which will be sufficient to fund its working capital activities. It has submitted a claim to recover overpaid VAT which, if successful, would provide further support to the balance sheet.
The special dividend follows last month’s solid set of interim results, which revealed a 10.9% rise in pre-tax profit to £480,000 and a 30% increase in revenue to £4.98 million.
Best of the Best is transitioning to an increasingly online business, with online revenue rising from £1.73 million to £3.26 million, representing 66.5% of total revenue. This is on the back of a significant investment in digital marketing, which the company intends to increase for the remainder of the financial year.
Panmure Gordon increased its pre-tax profit forecast for 2016, 2017 and 2018 by 10% following the interim results. It expects a profit of £1 million in the year to April 2016, 5.3% higher than the previous year. It also raised its target price from 155p to 220p, implying 12.8% upside.