Best of the Best shares surge after special dividend

(Sharecast News) - Best of the Best shares jumped by more than a third after the prize competition company declared a special dividend and said current sales were ahead of expectations.

Operating profit before exceptional items for the year to the end of April rose to £4.19m from £2.11m as revenue increased 20% to £17.79m. Pretax profit fell to £4.19m because of £2.6m of net exceptional gains a year earlier.

Best of the Best increased its ordinary dividend by 50% to 3p a share and declared a special dividend of 20p a share to be paid on 10 July.

The company, which runs competitions to win luxury cars and other items, increased its payout to shareholders as many other companies are cutting or scrapping dividends to conserve cash during the Covid-19 crisis.

The AIM-traded company's shares rose 39% to a record high of £11.29 at 10:30 BST. The shares were priced at 349p at the start of 2020.

Best of the Best said sales momentum since the end of the financial year was encouraging and ahead of its expectations. The company has shifted to become a digital-only operation after closing its retail branches. At the end of April it had £5.21m of cash and no debts.

Chief Executive William Hindmarch said: "Our digital only model gives us more flexibility and focus, as well as efficiency and cost savings, combined with ever increasing confidence in our accelerating online marketing investment. This has delivered strong results with both revenue and profit building throughout the second half of the financial year, leading to strong cash generation.

"Sales momentum since the period end has been encouraging and ahead of management's original expectations, and we look forward to updating shareholders with further progress in due course."

Best of the Best's main competition is its "dream car" contest, which gives players the chance to win a Bentley, Mercedes or other high-end vehicle. It also runs competitions for smaller prizes such as holidays, luxury watches, motorbikes and cash.