(BEST) Best Of The Best

Best of the Best plc

("Best of the Best" or "the Company")

Interim results for the six months ended 31 October 2011.

Best of the Best plc displays luxury cars as competition prizes within retail locations and online.

Key points 

·              Revenue from continuing operations increased 11.2 per cent to £2.67 million (2010: £2.41 million)

·              Loss before tax from continuing operations £0.12 million (2010 profit: £0.17 million)

·              Current cash balance of £1.1 million

·              Net Assets of £4.08 million (2010: £4.24 million)

·              Extended trials at shopping centres on going, with three new site openings planned imminently

·              Airport refurbishments continue with new lightweight, flexible stand designs

·              Encouraging trends in acquisition, conversion and frequency of online players

·              Tender Offer completed in November 2011, resulting in £1.18m being returned to shareholders

William Hindmarch, Chief Executive, said:

"Although it is disappointing to report a loss in the first half of the financial year, as the business continues to adjust to the impact of the loss of BAA contracts, I am pleased with the overall progress we have made.  We have experienced encouraging trading from our three trial shopping centre sites, and we have a further three sites due to commence trading in the next two months.

The Company has taken considerable steps to reduce the overhead of the business in line with its reduced income, in order to restore profitability following the loss of five BAA contracts, and will benefit from the increased revenues from its new site openings.  Following the tender offer in November 2011, the balance sheet remains strong with a cash balance in excess of £1.1 million, and the Company is well placed to take advantage of opportunities to open new physical locations and invest in the online business."

Enquiries:

Please visit www.botb.com for further information

Chief Executive's Statement

Although it is disappointing to report a loss in the first half of the financial year, as the business continues to adjust to the impact of the loss of BAA contracts and the significant reduction in revenues, I am pleased with the overall progress we made.  We have experienced encouraging trading from our three trial shopping centre sites, and we have plans to extend the trials to three further sites in the coming months.

The airport business has traded steadily throughout the first half, and offline revenues have been bolstered by income from the three shopping centre sites.  We are encouraged by the diversification of our offline revenues, a trend which we expect will continue in the future. 

The online business which accounted for some 35 per cent of total revenues in the period continues to perform well, with positive trends in the acquisition, conversion and engagement of players.  The results of additional competition categories have been promising and new daily competitions have recently been introduced.

Results

Revenue from continuing operations for the six months ended 31 October 2011 increased by 11.2 per cent to £2.67 million (2010: £2.41 million).  The Company recorded a loss before tax from continuing operations for the period of £0.12 million (2010 profit: £0.17 million). 

The Company has taken considerable steps to reduce the overhead of the business in line with its reduced income, in order to restore profitability following the loss of five BAA contracts (which represented 48 per cent of airport income in the prior period), and will benefit from the increased revenues from its new site openings. 

The cash position of the Company at the balance sheet date was £2.37 million (2010: £2.65 million), with inventory of prizes on display reduced to £1.10 million (2010: £1.7 million).  Our net assets which principally comprise cash, our stock of cars on display (held at net realisable value) and our 997 year leasehold office property stood at £4.08 million (2010: £4.24 million).  Following the Tender Offer and subsequent repurchase of shares in November 2011 (resulting in £1.18m being returned to shareholders), cash balances have reduced but currently remain in excess of £1.1 million.

Dividend

The Board is not recommending the payment of an interim dividend; however it is the intention of the Directors to maintain a progressive dividend policy and it will continue to review the payment of a dividend for the full financial year ending 30 April 2012.

Business at physical locations

The Company is currently trading from 10 airport sites, and three sites in shopping centres.  Airport locations include Gatwick North and South, Stansted, Luton, Birmingham, Manchester Terminals 1 and 2, Edinburgh, Copenhagen and Dublin's Terminal 2.  Shopping centre locations include Westfield Shepherds Bush, Westfield Stratford, and Lakeside. 

The physical sites have traded steadily throughout the first half, with like-for-like sales showing an increase of 3.2 per cent, and an overall increase for continuing operations of 20.2 per cent, compared to the same period in the prior financial year.  Following the restructuring of the Supercar Competition and introduction of new categories of prize and price points, revenues from physical sites have been bolstered by income from the three trial shopping centre sites, which accounted for 22.1 per cent of offline sales in December 2011. 

During February and March 2012, the Company will be opening three further shopping centre sites, at Westfield Merry Hill, Bluewater and Westfield Derby, further building upon and diversifying our non-airport revenues, and raising our exposure and the profile of our brand away from airports.  We have devised a lightweight, attractive and efficient stand design for our shopping centre outlets, which is less capital intensive, quicker to install and more flexible, allowing us to take full advantage of the opportunities afforded to us by these locations.  Furthermore, the cars on display at these sites tend to be from the second and third tiers of our Supercar Competition, which absorb significantly less working capital but continue to be well received by customers and the shopping centres.

We will be incorporating aspects of these more lightweight, stands as we continue our programme of refurbishment, which will see our stands at Gatwick North, Stansted and Birmingham being replaced and refitted over the coming weeks, and reduced to single car sites. 

The Company is in discussions to take a further site at Dublin Airport in Terminal 1, and a number of additional UK shopping centres have been identified at which we will seek further locations during 2012. 

Online Business

Online sales accounted for 35 per cent of total revenue in the period and were broadly flat compared the same period last year.  One of the consequences of losing the five BAA contracts was an immediate reduction in new player registrations, and we are pleased that revenues have not slipped whilst we have been taking the necessary steps to increase registrations from new sites, improve conversion of players from physical locations to online, and grow the number of customers acquired through online channels. 

As previously mentioned we restructured the main supercar competition to include three entry points (£25, £10 and £5) and a range of new cars. The results of these new categories have been promising and we have added daily competitions to the recently introduced luxury watch, designer handbag and tech competitions.  There is now a selection of at least 10 competitions for players to choose from, with daily prizes and prices from 50 pence to £25, giving our website a wider appeal and aiding customer acquisition.

Our average order value has decreased as the new lower priced competitions and categories have been introduced, but this has been more than offset by the number of transactions that we are processing on a monthly basis, which has increased by 58.7 per cent over the same period in the prior year.  We are confident that in the long term these trends will result in a more stable, engaged and loyal customer base. The online team continue to work on a wide range of marketing initiatives, with a particular focus on social networks and marketing partnerships to build online registrations and revenue in the future.

Outlook

2011 was a difficult year as the Company adjusted to significantly reduced revenues, sought to rebuild the number of physical locations, and restructured its competitions.  Good progress has been made and the Company will benefit in the second half of the year from reductions in central overhead and increased revenues, both from new site openings and the online business.  Following the tender offer in November 2011, the balance sheet remains strong with a cash balance in excess of £1.1 million, and the Company is well placed to take advantage of opportunities to open new physical locations and invest in the online business.

I look forward to updating shareholders in due course.

William Hindmarch

Chief Executive

27 January 2012

BEST OF THE BEST PLC

Unaudited interim financial statements for the six months ended 31^st October 2011

Report of the independent auditors

Independent review report to Best of the Best Plc

Introduction

We have been instructed by the Company to review the financial information for the six months ended 31^st October 2011 which comprises the consolidated statement of comprehensive income, consolidated statement of financial position as at 31^st October 2011, consolidated cash flow statement, consolidated statement of changes in equity, comparative figures and associated notes.

We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

This report is made solely to the Company in accordance with guidance contained in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity". Our review work has been undertaken so that we might state to the Company those matters we are required to sate to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors.  The Directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market which require that the half yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

As disclosed in note 6, the annual financial statements of the group are prepared in accordance with IFRS's as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with the International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the six months ended 31^st October 2011 is not prepared, in all material, respects, in accordance with International Accounting Standard 34 as adopted the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.    

Wilkins Kennedy

Chartered Accountants

Statutory Auditors

Bridge House

London Bridge

London, SE1 9QR

27 January 2012