BOTB.L Regulatory News (BOTB)

RNS Number : 1554P

Best of the Best PLC

12 July 2010

 

 

 

BEST OF THE BEST PLC

 

Preliminary Group audited results for the year ended 30th April 2010

 

Best of the Best plc displays luxury cars as competition prizes within airport terminals and online

 

 

 

Key points:

·; Revenue of £7.30 million (2009: £7.46 million)

·; Profit Before Tax of £0.48 million (2009: £0.52 million)

·; Strong cash generation with a 15% increase in cash balances to £2.29 million (2009: £1.99 million)

·; Board recommending 9% increase in dividend to 1.2p per share (2009: 1.1p)

·; New contract signed with Dublin Airport

·; Site refurbishments continue to contribute positive results

·; Ongoing discussions with new domestic and international airport sites

·; New IT platform and website launched in September 2009

 

William Hindmarch, Chief Executive, said:

"I am pleased to report results that reflect a solid year's trading, particularly for the first 11 months of the financial year. However, the widely reported disruption in April 2010 due to the volcanic activity in Iceland resulted in the closure of our airport sites for a sustained period, and had a significant impact on profitability in the final month of the period.

The major investment in our IT infrastructure and website was completed during the year, providing our existing customers with a considerably enhanced experience, whilst opening up new organic growth opportunities through the acquisition of new online players.

The Company has ended the year with increased cash balances of £2.29 million. The Group is well positioned with opportunities both to increase the scope, size and contribution of its online business and to open new physical outlets over the coming months."

 

 

 

 

Enquiries:

Best of the Best plc	William Hindmarch, Chief Executive	T: 020 7371 8866
	Rupert Garton, Commercial Director
Biddicks	Shane Dolan	T: 020 7448 1000
Charles Stanley Securities	Mark Taylor	T: 020 7149 6000
(Nominated Adviser)

 

Please visit www.botb.com for further information

 

 

Chief Executive's Statement

I am pleased to report results that reflect a solid year's trading, particularly for the first 11 months of the financial year. However, the widely reported disruption in April 2010 due to the volcanic activity in Iceland resulted in the closure of our airport sites for a sustained period, and had a significant impact on profitability in the final month of the period.

Having traded in line with expectations throughout the year, the effective closure of the business for 6-7 days, combined with the operational gearing of the business, resulted in a shortfall in profits for the full year.

The major investment in our IT infrastructure and website was completed during the year, providing our existing customers with a considerably enhanced experience, whilst opening up new organic growth opportunities through the acquisition of new online players. Our online business continues to perform well, representing approximately 21% of total sales during the year and our database of registered players has reached approximately 420,000. We have allocated substantial resources towards the development of our IT systems, website and online marketing capabilities over the past six months, which the Directors believe will bring significant new opportunities in this area.

During the period we signed a contract with Dublin Airport Authority to open a site in the new Terminal 2, and we are in discussions with operators of both domestic and international airports with a view to securing further sites.

 

Results

Turnover for the year ended 30 April 2010 was £7.30 million (2009: £7.46m), generating profit before tax of £0.48 million (2009: £0.52 million). Reported earnings per share was 2.68p per share (2009: 2.98p).

The cash position of the Company increased by 15% to £2.29 million (2009: £1.99 million), with prize inventory on display at £1.42 million. The balance sheet has strengthened further with net assets increasing to £4.28 million (2009: £4.08 million).

 

Dividend

The Board is recommending a final dividend payment of 1.2 pence per share for the full year ending 30th April 2010 subject to shareholder approval at the AGM on 16th September 2010. The final dividend is covered 2.2 times by earnings per share and will be paid on 15th October 2010 to shareholders on the register on 17th September 2010.

 

Business

The first 11 months of the financial year saw solid trading across our airport sites. Despite passenger numbers remaining below the levels seen in previous years, income per passenger (or Best of the Best customer) remained broadly stable.

Having traded in line with expectations throughout the year, the effective closure of the business for a 6-7 day period as a result of the volcanic ash disruption in April, combined with the operational gearing of the business, resulted in a shortfall in profits for the month and impacted the full year result.

There have been major landlord terminal refurbishments underway at Heathrow Terminal 4, Manchester Terminal 1, Edinburgh, and Glasgow. We have taken the opportunity to reinstall brand new, redesigned sites at Heathrow Terminal 4, Manchester Terminal 1 and Glasgow, as well as two sites in Heathrow's Terminal 1.

Our new site at Edinburgh Airport will reopen in August having been closed for the past 12 months due to the terminal refurbishment. Our tender for a site in Dublin Airport's impressive new Terminal 2 development was successful and will open in November 2010.

 

The sale by BAA of Gatwick Airport is complete and our contracts have transferred to the new owners, and we remain well prepared should BAA transfer any further airports over the coming months and years.

The Directors believe that our customer database is a source of significant value, and we have begun to substantiate this through partnerships with Aston Martin, Maserati and Tesla, providing them with additional exposure to both our airport sites and our customer database.

Our new IT platform has allowed us to trial new products and price points, both at airport terminals and online, as well as to expand our loyalty program. We will look to build on these trials in the coming months to increase the penetration and revenues at our airport locations.

In light of the recent economic environment we have been cautious regarding overseas expansion. However, we continue to engage in discussions with international airport operators to identify key tier 1 locations and countries where multiple site developments will be possible.

 

Online Business

The online business represented approximately 21% of total turnover and performed in line with expectations during the year ended 30 April 2010. During the period we invested substantial resources towards the complete redevelopment of our IT systems and website, which was launched in the second quarter. We are pleased to report that this was delivered on time and on budget, and has been well received by our customers and our airport staff. The last six months have proven the stability and flexibility of the new systems, which give us scalable foundations for future growth.

New account based reward scheme functionality together with marketing initiatives have increased the conversion of airport to online players, and the database of registered players on the new platform stands at approximately 420,000.

Traditionally, the acquisition of our online players has predominantly been through our physical airport sites, and our website has almost exclusively served our existing customer base. The Directors believe the new platform will bring significant growth opportunities for the online business, and have very recently appointed a Head of Marketing to lead this development.

We have budgeted for a greater level of marketing resources, primarily to increase the levels of player acquisition through traditional online channels, as well as to improve the metrics related to retention, loyalty and increased lifetime value of our existing airport acquired players.

 

Outlook

Despite the unpredictability of the past year, including the economic climate and the unfortunate ash related events of April 2010, the Group continues to trade profitably.

The Board remains optimistic about the trading prospects for the Group in the coming year. The Directors are confident of steady trading from the airport estate, and are optimistic with regards to the future opportunities for the online business.

With its strong cash balance, the Group is well placed to execute its strategy of increasing the scope, size and contribution of its online offering, as well as to assess locations to open new physical outlets over the coming months.

We continue to monitor developments and review opportunities in our sector and look forward to updating shareholders with further progress in due course.

 

 

William Hindmarch

Chief Executive

12th July 2010

BEST OF THE BEST PLC
Consolidated Income Statement
For The Year Ended 30th April 2010
		2010		2009
	Notes	£'000		£'000
CONTINUING OPERATIONS
Revenue	5	7,298		7,462
Cost of sales		(2,980)		(2,986)
GROSS PROFIT		4,318		4,476
Administrative expenses		(3,869)		(4,012)
OPERATING PROFIT		449		464
Finance income		31		55
PROFIT BEFORE TAX		480		519
Tax	6	(139)		(139)
PROFIT FOR THE YEAR		341		380
Earnings per share expressed
in pence per share:	7
Basic		2.68		2.98
Diluted		2.62		2.92

 

BEST OF THE BEST PLC
Consolidated Statement of Comprehensive Income
For The Year Ended 30th April 2010
		2010		2009
	Notes	£'000		£'000
PROFIT FOR THE FINANCIAL YEAR		341		380
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		341		380

 

BEST OF THE BEST PLC
Consolidated Statement of Financial Position
30th April 2010
		2010		2009
	Notes	£'000		£'000
ASSETS NON-CURRENT ASSETS
Property, plant and equipment		1,314		1,172
Deferred tax		22		3
		1,336		1,175

 

CURRENT ASSETS
Inventories		1,421		1,739
Trade and other receivables		110		115
Cash and cash equivalents		2,290		1,988
		3,821		3,842
TOTAL ASSETS		5,157		5,017
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital	8	636		636
Share premium	9	1,783		1,783
Share-based payment reserve	9	148		145
Retained earnings	9	1,715		1,514
TOTAL EQUITY		4,282		4,078
LIABILITIES
CURRENT LIABILITES
Trade and other payables		727		799
Tax payable		148		140
TOTAL LIABILITIES		875		939
TOTAL EQUITY AND LIABILITIES		5,157		5,017

BEST OF THE BEST PLC

 

Consolidated Statement of Changes in Equity

For The Year Ended 30th April 2010

 

 

	Called up share capital	Profit and loss account	Share premium	Other reserves	Total equity
	£'000	£'000	£'000	£'000	£'000
Balance at 1 May 2008	636	1,261	1,783	106	3,786
Changes in equity
Dividends	-	(127)	-	-	(127)
Total comprehensive income	-	380	-	39	419
Balance at 30 April 2009	636	1,514	1,783	145	4,078
Changes in equity
Dividends	-	(140)	-	-	(140)
Total comprehensive income	-	341	-	3	344
Balance at 30 April 2010	636	1,715	1,783	148	4,282

 

 

BEST OF THE BEST PLC
Consolidated Cash Flow Statement
For The Year Ended 30th April 2010
		2010		2009
Cash flows from operating activities		£'000		£'000
Cash generated from operations	1	987		960
Tax paid		(150)		(246)
Net cash from operating activities		837		714
Cash flows from investing activities
Purchase of tangible fixed assets		(477)		(382)
Sale of tangible fixed assets		51		22
Interest received		31		55
Net cash from investing activities		(395)		(305)
Cash flows from financing activities
Equity dividends paid		(140)		(127)
Net cash from financing activities		(140)		(127)
Increase/(Decrease) in cash and cash equivalents		302		282
Cash and cash equivalents at beginning of year		1,988		1,706
Cash and cash equivalents at end of year		2,290		1,988

 

BEST OF THE BEST PLC

 

Notes to the Consolidated Cash Flow Statement

For The Year Ended 30th April 2010

 

 

1. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATE FROM OPERATIONS

 

		2010		2009
		£'000		£'000
	Profit before tax	480		519
	Depreciation charges	292		253
	(Profit)/Loss on disposal of fixed assets	(7)		7
	Employee share based payment	3		38
	Finance income	(31)		(55)
		737		762
	Decrease in inventories	318		249
	Decrease in trade and other receivables	5		22
	Decrease in trade and other payables	(73)		(73)
	Cash generated from operations	987		680

 

BEST OF THE BEST PLC

 

Notes to the Preliminary Announcement

For The Year Ended 30th April 2010

 

1. BASIS OF PREPARATION

 

The financial information has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted by the EU (Adopted IFRS's) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been recorded under the historical cost convention.

 

The financial information set out above does not constitute the Group's statutory accounts for the years ended 30th April 2010 or 2009. The statutory accounts for 2010 will be delivered to the registrar of companies in due course.

 

2. BASIS OF CONSOLIDATION

 

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiary undertakings). Where necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies in line with the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

3. ACCOUNTING POLICIES

 

The preliminary financial information has been prepared using accounting policies set out in the Group's statutory accounts for the year ended 30th April 2010.

 

FRS 20 'Share-based payment' was adopted for the first time during the 2007 year end. Under this standard, an expense is recognised in the income statement when the Group receives goods for services in exchange for shares or where the valuation of those goods or services incorporates the performance of the Group's share price. The income statement includes a charge for share-based payments of £2,843 (2009: £38,555).

 

Revenue represents the value of tickets sold in respect of competitions which have been completed at the accounting date. A competition is completed when the Group closes entries.

4. 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 this preliminary report.

 

All of the Group's material operations are located in the United Kingdom.

5. EXCEPTIONAL ITEM

 

During 2009, the company received £82,000 with respect to overpaid VAT on foreign internet sales. This amount has been included in turnover for the year ended 30th April 2009.

 

6. TAX

 

Analysis of the tax charge

		2010		2009
		£'000		£'000
	Current tax:
	Tax	148		136
	Under/(over)provision in prior year	10		(10)
	Total current tax	158		126
	Deferred tax	(19)		13
	Total tax charge in income statement	139		139

 

 

 

 

7. EARNINGS PER SHARE

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

 

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. The Group has one category of dilutive potential ordinary shares: share options. For the share options a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Group's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

 

Reconciliations are set out below.

	Earnings £'000		2010 Weighted average number of shares		Per-share amount pence
Basic EPS
Earning attributable to ordinary shareholders	341		12,718,254		2.68
Effect of dilutive securities
Options	-		273,254
Diluted EPS
Adjusted earnings	341		12,991,508		2.62

 

 

	Earnings £'000		2009 Weighted average number of shares		Per-share amount pence
Basic EPS
Earning attributable to ordinary shareholders	380		12,718,254		2.98
Effect of dilutive securities
Options	-		262,367
Diluted EPS
Adjusted earnings	380		12,980,621		2.92

 

 

 

8. CALLED UP SHARE CAPITAL

 

	Authorised:
	Number:	Class:	Nominal	2010		2009
			value:	£'000		£'000
	30,000,000	Ordinary shares	5p	1,500		1,500
	Allotted, issued and fully paid:
	Number:	Class:	Nominal	2010		2009
			value:	£'000		£'000
	12,718,254	Ordinary shares	5p	636		636

 

No shares have been issued during or subsequent to the year ended 30th April 2010.

 

9. RESERVES

						Share-based
		Retained		Share		payment
		earnings		premium		reserve		Totals
		£'000		£'000		£'000		£'000
	At 1st May 2009	1,514		1,783		145		3,442
	Profit for the year	341						341
	Dividends	(140)						(140)
	Employee benefits					3		3
		1,715		1,783		148		3,646
	At 30th April 2010

 

 

10. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

				2010		2009
				£'000		£'000
	Profit for the financial year			341		380
	Dividends			(140)		(127)
				201		253
	Employee share schemes adjustment			3		39
	Net addition to shareholders' funds			204		292
	Opening shareholders' funds			4,078		3,786
	Closing shareholders' funds			4,282		4,078

 

 

11. The financial information set out above for the years ended 30th April 2010 and 2009 does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 2006. Statutory accounts for 30th April 2009 have been delivered to the Registrar of Companies and those for 30th April 2010 will be delivered following the Company's annual general meeting. The Company's auditors have reported on the full accounts for both years and have accompanied each year with an unqualified report.

 

12. The annual report and accounts will be posted to shareholders shortly and will be available for members of the public at the Company's registered office, 2 Plato Place, St Dionis Road, London, SW6 4TU.

 

13. The Annual General Meeting will be held on 16th September 2010 at the offices of Charles Stanley Securities, 25 Luke Street, London, EC2A 4AR.

 

This information is provided by RNS

The company news service from the London Stock Exchange