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Best of the Best plummets on results day

Shares drop 20 per cent despite record profit
June 16, 2021
  • Best of the Best lost a fifth of its market value on the morning of its results
  • Despite posting record profits in 2021 

Best of the Best (BOTB) shares dropped by as much as 29 per cent on the morning of its full-year results, despite a record financial performance. The company, which organises online prize competitions, said its operating profit had more than doubled year on year to £14m.

All of its revenues were derived from its online business, now that it has completed its transition from an airport-based retail operation to a pure-play digital model. In fact, over half of sales were generated through mobile devices, prompting the launch of both an iOS and Android mobile app. 

Alongside a final dividend of 5p per share, Best of the Best also announced a special dividend of 50p that is scheduled to be paid to shareholders on 16 July 2021. 

Management is clearly feeling confident, but that could prove misguided if the company continues to lose customers’ attention as lockdown rules lift. Chief executive William Hindmarch warned that compared with the summer 2020 period, the business has “experienced somewhat of a reduction in customer engagement since the latest easing of lockdown restrictions on 12 April 2021, specifically relating to the understandably long-awaited re-opening of hospitality and non-essential retail”. 

That means this set of results only includes around three weeks of the impact of looser lockdown rules. Best of the Best says it expects customer engagement to return to normal levels “before too long”, but judging by the reaction on results day, the market looks unconvinced. For now, we prefer to stay neutral. Hold. 

BEST OF THE BEST (BOTB)  
ORD PRICE:1,975pMARKET VALUE:£ 186m
TOUCH:1,850-2,100p12-MONTH HIGH:3,600pLOW: 1,110p
DIVIDEND YIELD:0.3%PE RATIO:16
NET ASSET VALUE:95pNET CASH:£11.8m
Year to 30 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201710.81.5113.71.4
201812.91.6013.31.5
201914.84.7038.52.0
202017.84.2137.53.0
202145.714.11235.0
% change+157+234+227+67
Ex-div:16 Sep   
Payment:01 Oct   
NB: A special dividend of 40p per share was paid on 5 February 2021. A special dividend of 50p is scheduled to be paid to shareholders on 16 July 2021.