BOTB.L Regulatory News (BOTB)

19 Jul 2007 07:00

Best of the Best PLC19 July 2007 BEST.L BEST OF THE BEST PLC Preliminary audited results for the year ended 30th April 2007 Best of the Best plc displays luxury cars as competition prizes within airport terminals and online Key points • Turnover up 23.4% to £5.9m (2006 £4.7m) • Profit Before Tax up 20.2% to 0.71m (2006 £0.59m) • 2 New Airport Contracts signed during the period and a further 3 since the year end • In discussions with new non-airport sites • New ticket pricing widening customer base and increasing player frequency • Significant growth in online players • Database at 210,000 and growing at approximately 9,000 new players per month • Senior appointments to drive growth in airport and online business • Directors confident of steady progress in the year ahead William Hindmarch, Chief Executive, said: "I am pleased to report a strong second half performance with the full year results in line with expectations. We continue to diversify our competition structures, which in turn is generating new customers. Our online presence continues to grow and our database is now increasing at a rate of approximately 9,000 new players a month. We continue to assess non airport sites as we focus on developing new markets and I look forward to updating shareholders with further progress in due course." 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 Advisers) Freddy Crossley Please visit www.bestofthebest.co.uk for further information Chief Executive's Statement I am pleased to announce our results for the year ended 30th April 2007.Overall, it has been a successful year for the Company, which floated on AIM inAugust 2006 raising £2.0m net of expenses. Although we experienced difficulttrading conditions almost immediately post-flotation due to major securityalerts across the UK's airports, we had a strong second half to the year whichproduced full year results in line with current market expectations. We have consolidated on our success to date and have made a number of seniormanagement and operational appointments, which will underpin further progress inthe year ahead. Results During the year ended 30th April 2007 Turnover was £5.9m (2006 £4.7m) withprofit before tax increasing by 20.2 per cent to £0.71m (2006 £0.59m). A smalloverall decline in operating margin was principally due to the impact of thesecurity alerts in the first six months. However, over the second half operatingmargin improved significantly and was helped by the popularity of our new lowerpricing structure and shorter competition durations. The cash position of the Company remains solid at £1.77m, and we have increasedthe inventory by £0.38m over the year to accommodate new competition prizes ondisplay. Dividend The Board is not recommending the payment of a dividend but as stated onAdmission to AIM it intends to pay a dividend for the financial year ending 30April 2008. New Site Contracts In the financial year we signed two new contracts, one in Heathrow Terminal 4which commenced operations in July 2006 and a further contract for a flagshipsite in the new Terminal 5 which will open in March 2008. Since the year end wehave also signed three further contracts for sites in Birmingham Airport,Heathrow Terminal 2 and Nottingham East Midlands Airport. We continue to assess the development of sites at foreign airports, shoppingcentres and other high footfall locations. We have completed a short trial inone of the UK's leading shopping centres at Bluewater and we are in discussionswith several other venue owners and operators about further trials. Business Our lower ticket price and shorter duration competitions continue to besuccessful and have been well received by customers. The lower ticket price hasenabled us to target a broader demographic, both in terms of passengers throughthe airports, and also online. Furthermore, airport to online conversion hasimproved, player frequency has increased and our competitions are attracting ayounger customer base. The shorter competitions have proved very attractive andour increasing critical mass should allow us to continue to increase thefrequency of our competitions in the future. We have recently refitted our stands in the Gatwick North and South terminals toa much higher standard and I am pleased to report that the new style hasmaterially improved revenues at these sites. By using a completely new standdesign together with the latest audiovisual and lighting effects, we havesignificantly improved the customers' experience and contributed to the qualityof the airport departure lounges. We are now submitting plans to upgrade otherkey sites to a similar standard, which have been well received by the airportoperators. During the period we recruited a senior Sales Director who previously ran directsales teams for Sky TV, and who is responsible for overseeing all of our airportsales. We have already experienced encouraging results, through enhancedcommission structures, better recruitment and improved retention of staff. Wecontinue to focus on recruitment and training which are key to building andmaintaining a productive sales force. Online Business Our lower priced tickets have significantly improved the rate of growth of ourdatabase, which now stands at circa 210,000 registered players. We believe theonline business has significant potential for growth and we have thereforerecently made two key hires. The Head of Online Marketing brings considerableexperience in online sales, and database acquisition, whilst the Chief TechnicalOfficer will enable us to develop our website, new games and competitions, withgreater speed and efficiency. With this additional resource, we aim tomaterially increase the growth of online sales. Our instant win game has recently been launched online with encouraging earlyresults, and improvements to our website are driving increased levels oftraffic. We will continue to focus hard on developing the online offering duringthe year ahead. Strategy Our core strategy continues to focus on growing sales at airport sites andonline, and building our database accordingly. Increasing the number of newsites will continue to remain a priority as will attracting a wider targetmarket to both our physical and online sites by creating new and attractive gameformats. The higher margin online competitions will benefit from the increase incustomers on the database. The new competition format strongly supports thisstrategy, as we are now growing our database much more rapidly, and we haveidentified significant potential to offer additional games and content to ourwebsite. Outlook The Board remains positive of the trading prospects for the Company in the newfinancial year. We are currently in discussions to develop physical sites withina number of new locations and we are reviewing new game formats. We continue to monitor developments and review opportunities in our skill gamingsector and look forward to updating shareholders with further progress in duecourse. William HindmarchChief Executive19 July 2007 BEST OF THE BEST PLC Income Statement For The Year Ended 30 April 2007 2007 2006 £'000 £'000 Notes CONTINUING OPERATIONS Revenue 5,861 4,748 Cost of sales (2,376) (2,031) ________ _______ GROSS PROFIT 3,485 2,717 Administrative expenses (2,815) (2,102) ________ _______ OPERATING PROFIT 670 615 Finance costs (12) (24) Finance income 52 - ________ ________ PROFIT BEFORE TAX 710 591 Tax 3 (152) (158) ________ ________ PROFIT FOR THE PERIOD 558 433 ________ ________ (Loss)/Earnings Per Share expressed in pence per share: 4 Basic 4.99 4.95 Diluted 4.93 4.95 BEST OF THE BEST PLC Statement of Recognised Income and Expense For The Year Ended 30 April 2007 2007 2006 Notes £'000 £'000 PROFIT FOR THE FINANCIAL YEAR 558 433 _______ _______TOTAL RECOGNISED INCOME AND EXPENSE RELATING TO THE YEAR 558 433 _______ _______ Prior year adjustment (270) _______ TOTAL RECOGNISED INCOME AND EXPENSE SINCE LAST ANNUAL REPORT 163 _______ BEST OF THE BEST PLC Balance Sheet 30 April 2007 2007 2006 Notes £'000 £'000 ASSETSNON-CURRENT ASSETS Property, plant and equipment 562 444Deferred tax 20 8 _______ _______ 582 452 CURRENT ASSETSInventories 1,535 1,161Trade and other receivables 50 47Cash and cash equivalents 1,768 - _______ _______ 3,353 1,208 LIABILITIES 666 630CURRENT LIABILITIESTrade and other payablesFinancial liabilities - borrowings - 187Bank overdraftsInterest bearing loans and borrowings - 16Tax payable 159 105 _______ _______ 825 938 NET CURRENT ASSETS 2,528 270 _______ _______NON-CURRENT LIABILITIESFinancial liabilities - borrowingsInterest bearing loans and borrowings - 177 _______ _______NET ASSETS 3,110 545 _______ _______ SHAREHOLDERS' EQUITYCalled up share capital 6 636 63Share premium 7 1,783 138Share-based payment reserve 7 27 -Retained earnings 7 664 344 _______ _______ 3,110 545TOTAL EQUITY _______ _______ BEST OF THE BEST PLC Cash Flow Statement For The Year Ended 30 April 2007 2007 2006 £'000 £'000Cash flows from operating activities Cash generated from operations 1 497 256Interest paid (12) (24)Tax paid (109) (28) _______ _______Net cash from operating activities 376 204 Cash flows from investing activitiesPurchase of tangible fixed assets (278) (90)Sale of tangible fixed assets 18 -Interest received 52 - _______ _______Net cash from investing activities (208) (90) Cash flows from financing activitiesLoan repayments in year (194) (4)Amount withdrawn by directors - (77)Share issue 1,981 - _______ _______ Net cash from financing activities 1,787 (81) Increase in cash and cash equivalents 1,955 33 Cash and cash equivalents at beginning of year (187) (220) _______ _______Cash and cash equivalents at end of year 1,768 (187) _______ _______ BEST OF THE BEST PLC Notes to the Cash Flow Statement For The Year Ended 30 April 2007 1. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS 2007 2006 £'000 £'000Profit before tax 709 592Depreciation charges 146 112Profit on disposal of fixed assets (4) -Employee share based payment 27 -Finance Costs 12 24Finance Income (52) - _______ _______ 838 728 Increase in inventories (374) (259)Increase in trade and other receivables (3) (8)Increase/(Decrease) in trade and other payables 36 (205) _______ _______Cash generated from operations 497 256 _______ _______ BEST OF THE BEST PLC Notes to the Preliminary Report For The Year Ended 30 April 2007 1. ACCOUNTING POLICIES The preliminary financial information has been prepared using accountingpolicies set out in the Company's statutory accounts for the year ended 30thApril 2007. FRS 20 'Share-based payment' has been adopted for the first time.Under this standard, an expense is recognised in the profit and loss accountwhen the Company receives goods or services in exchange for shares or where thevaluation of those goods or services incorporates the performance of theCompany's share price. The profit and loss account includes a charge forshare-based payments of £27,132 (2006: £Nil). The implementation of FRS 20 hasnot resulted in a prior year adjustment. Revenue represents the value of ticketssold in respect of competitions which have been completed at the accountingdate. A competition is completed when the Company closes entries. 2. SEGMENTAL REPORTING The directors consider that the primary reporting format is by business segmentand that there is only one such segment being that of competition operators.This disclosure has already been provided in the preliminary report All of the Company's operations are located in the United Kingdom. 3. TAX Analysis of the tax charge 2007 2006 £'000 £'000Current tax:Tax 160 170Overprovision in prior year - (8)Underprovision in prior year 3 - ------- ------- Total current tax 163 162 Deferred tax (11) (4) ------- ------- Total tax charge in income statement 152 158 4. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period. Diluted earnings per share is calculated using the weighted average number ofshares adjusted to assume the conversion of all dilutive potential ordinaryshares. Reconciliations are set out below. 2007 Weighted average number Per-share Earnings of amount £'000 shares penceBasic EPSEarnings attributable to ordinaryshareholders 588 11,196,262 4.99Effect of dilutive securitiesOptions - 138,838 - -------- --------- --------Diluted EPSAdjusted earnings 558 11,335,100 4.93 ======== ========= ======== 2006 Weighted average number Per-share Earnings of amount £ shares penceBasic EPSEarnings attributable to ordinaryshareholders 433,066 8,750,000 4.95Effect of dilutive securities - - - -------- -------- -------- Diluted EPSAdjusted earnings 433,066 8,750,000 4.95 ======== ======== ======== 5. PRIOR YEAR ADJUSTMENT The prior year adjustment as disclosed in the Statement of Recognised Income andExpense in the year ended 30th April 2006 relates to a change in accountingpolicy in relation to turnover. The effect has been to increase Accruals and Deferred income by £330,000,increase turnover by £252,000 and increase cost of sales by £221,000. The effecton the tax charge was to reduce this by £28,000. The retained profits, after these adjustments, were reduced by £270,000 in theyear ended 30th April 2005. 6. CALLED UP SHARE CAPITAL Authorised:Number: Class: Nominal 2007 2006value: £'000 £'00030,000,000 Ordinary shares 5p 1,500 100(2006 - 100,000) ======= ======= Allotted, issued and fully paid:Number: Class: Nominal 2007 2006value: £'000 £'00012,718,254 Ordinary shares 5p 636 63(2006 - 62,500) ======= ======= The Company has one class of share which carry no right to fixed income. The share issues during the year were as listed below (1) On 4th August 2006 a bonus share issue took place whereby existingshareholders were granted 6 shares for every one held resulting in a total issueof 7,500,000 ordinary shares of £0.05 each. This issue was a non-cashconsideration (2) On 14th August 2006 issued 3,968,254 ordinary shares at £0.63 per share forcash consideration. No shares were issued subsequent to 30th April 2007. 7. RESERVES Share-based Retained Share payment earnings premium reserve Totals £'000 £'000 £'000 £'000 At 1 May 2006 344 138 - 482Profit for the year 558 558Bonus share issue (238) (138) - (376)Cash share issue (Net of expenses) - 1,783 - 1,783Employee benefits - - 27 27 -------- ------- -------- -------- At 30 April 2007 664 1,783 27 2,474 ======== ======= ======== ======== 8. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2007 2006 £'000 £'000Profit for the financial year 558 433Issue of shares (net of expenses) 1,981 -Employee share schemes adjustment 27 - -------- -------- Net addition to shareholders' funds 2,566 433Opening shareholders' funds 544 112 -------- -------- Closing shareholders' funds 3,110 545 ======== ======== 9. The financial information set out above for the years ended 30 April 2007 and2006 does not constitute statutory accounts within the meaning of Section 240 ofthe Companies Act 1985. Statutory accounts for 30 April 2006 have been deliveredto the Registrar of Companies and those for 30 April 2007 will be deliveredfollowing the Company's annual general meeting. The Company's auditors havereported on the full accounts for both years and have accompanied each year withan unqualified report. 10. The annual report and accounts will be posted to shareholders and will beavailable for members of the public at the Company's registered office, 2 PlatoPlace, St Dionis Road, London, SW6 4TU. 11. The Annual General Meeting will be held on 20th September 2007 at theoffices 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