Best of the Best stocks fall 30% despite tripling profits as the company warns of falling interest in its auto competitions since the lockdown was eased
- Pre-tax profit increased to £ 14 million for the year ended April 30, compared to £ 4.2 million a year earlier
- BOTB has its final dividend of 3p. increased to 5 cents per share
- Investors are also expecting a 50p special dividend worth a total of £ 4.71 million
- But the company’s shares had fallen to £ 19 by midday Wednesday
Best of the Best’s shares plummeted around 30 percent after the online competitor company said it recently saw a decline in customer interest, overshadowing its excellent full-year results.
Best of the Best, which specializes in luxury sports car raffles where people buy tickets in hopes of winning expensive cars, have more than tripled wins over the past year, results show.
Pre-tax income rose to £ 14 million for the year to the end of April, up from £ 4.2 million a year earlier, after revenues rose from £ 17.8 million to £ 45.7 million.
Outstanding Achievement: Best of the Best, which specializes in raffles for luxury sports cars where people buy tickets in hopes of winning expensive cars, tripled their winnings last year
Given the strong performance, the company increased its final dividend from 3p to 5p per share, with investors also expecting a special 50p dividend for a total of £ 4.71 million.
But the shares of the AIM-listed company fell more than 30 percent at some point this morning. They were down 27.8 percent to 19 pounds by Wednesday lunchtime.
However, they are still around 60 percent above the previous year’s figure and have seen a jump in value of around 500 percent in the last two years.
The massive decline is due to the company saying that customer interest has “subsided” since the lockdown restrictions were lifted in April when shops and restaurants reopened.
CEO William Hindmarch said: ‘We are closely monitoring this, but with our flexible model, growth strategy and plans for the coming year, we expect customer engagement to return to normal levels shortly.’
Best of the Best closed its last competitive physical location at Birmingham Airport in July 2019 after renting physical locations at airports and shopping malls across the country for 20 years.
These included Heathrow Airport, where its first physical location was, as well as Gatwick, Edinburgh, Manchester and Dublin Airports and later the Westfield Shopping Center in London.
Hindmarch said that the online move in retrospect was “opportune” given the travel restrictions due to the pandemic.
‘After we made the strategic decision to leave our predominantly airport-based retail area and concentrate on a purely online strategy, we were able to align our business, our products and our prices specifically with a much more scalable purely online offering’, he added.
BOTB was founded in 1999 and started taking off thanks to the power of social media
BOTB was founded by Hindmarch in 1999 and took off thanks to the power of social media.
Contestants must place a marker where they think a soccer ball was in a photo before it is cleverly cut out.
In the “Dream Car” competition, customers can buy tickets from £ 1.60 to win supercars like Jaguars and Tesla, while tickets for the “Midweek Car Competition” start at 80p.
Customers can also take part in the Weekly Lifestyle Competition to win luxury watches, motorcycles, vacations and other gadgets.
Stellar rise: BOTB stock fell today, but it’s still about 60% higher than last year and is up about 500% over the past two years