Best of the Best PLC Trading Update (5218I)
13 Agosto 2021 - 01:00AM
UK Regulatory
TIDMBOTB
RNS Number : 5218I
Best of the Best PLC
13 August 2021
Best of the Best plc
("Best of the Best", "BOTB" or the "Company")
Trading Update
Best of the Best PLC (LSE: BOTB), the online organiser of weekly
competitions to win cars and other lifestyle prizes, provides the
following trading update for the 15 weeks ended 8 August 2021.
At the time of the Company's Preliminary Results announcement on
16 June 2021, we indicated that trading had softened since the
COVID lockdown ended on 12 April 2021.
Below we outline what has happened to the three customer cohorts
since that update:
1. Existing customers, signed up prior to May 2020 remain loyal
and engaged but with their newfound freedoms, the distractions of
major sporting events and ability to travel, they are generating
revenues c.6% lower than during the final 15 weeks of the financial
year ended 30 April 2021. Despite this, revenues generated by these
existing customers remain higher than in the 12 months
pre-pandemic, and now form c.50% of the total.
2. Customers signed up between May 2020 and Apr 2021 (during the
Pandemic), representing c.40% of total revenue have performed well
and in line with our normal models and expected behaviour.
3. In line with many other businesses, the cost of acquiring new
customers has significantly increased in recent months with the
cost per thousand impressions (CPM) on social media platforms -
which account for two-thirds of BOTB's marketing spend, increasing
by up to 60% compared to previous levels. Combined with the
aforementioned reduced levels of engagement post-lockdown, our
variable marketing investment has therefore not yet increased in
line with our budgeted forecasts but has cautiously remained
in-line with the prior period. As a result, new customer revenues
(registered within the last 15 weeks) are c.40% lower (accounting
for a 9% fall in total revenue) than during the final 15 weeks of
the prior financial year. Importantly, new customers acquired in
recent months have performed in-line with previous customers, but
we have simply registered fewer of them for the same levels of
marketing investment. We are monitoring our marketing costs and
returns very closely and remain ready to increase investment as
soon as market conditions improve.
In combination, these factors have resulted in a c.15% reduction
in average weekly sales for the first 15 weeks of the new financial
year, compared to the final 15 weeks of the prior financial year
ended 30 April 2021. It is worth noting that the summer months are
typically a low point and there is a seasonal lull in customer
engagement and revenue generation, which we expect to improve over
the coming months.
With our substantially fixed cost model, this will have a
disproportionate impact on margins, profitability and earnings for
the financial year ending 30 April 2022. Whilst still substantially
higher than the pre-COVID comparative and the results delivered in
FY 2020, these are now anticipated to be c.57% lower than what was
reported for FY 2021. The new guidance the Board is providing today
for the year ending 30 April 2022 is c.62% below current market
forecasts with a commensurate impact on the following financial
year. However, should revenue trends improve, it can be expected
that the reverse would occur and margins and profitability would
increase materially due to the nature of the business model and the
operational gearing.
We are hopeful that the cost of acquiring new players will
normalise before too long and our flexible model means we are able
to adjust to a higher cost of new player acquisition if necessary.
Notwithstanding this, we remain focused on our growth strategy
which together with new initiatives, the ongoing engagement of our
large and loyal database, and a return to more normal patterns of
customer behaviour should allow for profitability to increase and
for margins to recover.
We remain excited by the growth opportunities for BOTB which
include new partnerships and additional competitions such as our
'One Ticket, Four Prizes' competition launched this week. The
Company's revenue is c.2.5 times higher than the corresponding
period in FY 2020, the pre-Covid comparative year.
The Company is profitable, cash generative and has a very strong
balance sheet with cash balances at 12(th) August 2021 in excess of
GBP6 million. The management team is fully focused on delivering
long-term growth and we look forward to updating shareholders in
due course.
Enquiries:
Best of the Best plc William Hindmarch, Chief T: 020 7371
Executive 8866
Rupert Garton, Commercial
Director
Buchanan Chris Lane T: 020 7466
Toto Berger 5000
finnCap Corporate Finance T: 020 7220
(Nominated Adviser and Carl Holmes 0500
Broker) Kate Bannatyne
Teddy Whiley
Alice Lane
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR. Please visit
www.botb.com for further information
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END
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