30th Jan 2019 10:02
LONDON (Alliance News) - Best of the Best PLC on Wednesday said it is trading ahead of expectations in its current financial year, as profit more than tripled in the first half on reduced costs.
In addition, the company said it intends to return surplus cash to shareholders by way of a tender offer for up to 7.1% of its share capital at a price of 485 pence per share.
The stock was trading 35% higher on Wednesday at 298.00p a share, giving it a market capitalisation of GBP22.2 million. The stock closed at 220.00p on Tuesday.
If the maximum number of shares under the tender offer are acquired, the company said this will result in an amount of GBP3.5 million being paid to shareholders.
Following completion, Best of the Best said it will still have a robust balance sheet, retaining cash balances of in excess of GBP1.5 million, which the company considers to be sufficient working capital to fund its activities over the next 12 months.
The company, which runs competitions online to win cars and other prizes, reported pretax profit of GBP3.6 million for the six months to the end of October 2018. In the first half of financial 2018, pretax profit totalled GBP945,000.
Revenue rose 29% to GBP7.1 million in the recent half-year from GBP5.5 million year-on-year.
During the first half, the company said it has completed its move away from physical retail locations to become an online-focused operation. The move was initiated following a continued increase in costs associated with rent and staff expenditure in retail locations.
"We have one remaining physical location at Birmingham Airport, and revenue is now generated almost exclusively online," said Chief Executive William Hindmarch.
On a divisional basis, Best of the Best said its Dream Car competition unit continues to perform well, with improvements to the online user experience, pricing and choice of cars well received by clients.
The Lifestyle competition division - which features luxury watches, motorbikes, holidays and gadgets - also continued to perform encouragingly, the company said.
"Our marketing strategy has continued to perform well and driven strong revenue numbers as well as promising growth in newly acquired customers," said Hindmarch.
"Trading since the period end has been encouraging, with the company well placed for future growth and currently operating ahead of management expectations for the full year," added Hindmarch.
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