First Day Dealings
14 Agosto 2006 - 9:00AM
UK Regulatory
RNS Number:4984H
Best of the Best PLC
14 August 2006
Best of the Best plc
("Best of the Best" or "the Company")
Best of the Best plc is a profitable business that displays luxury cars as
competition prizes in rented retail space within airport terminals and on its
website www.bestofthebest.co.uk
ADMISSION TO AIM
* Dealings on AIM commence today
* Placing of 3,968,254 Ordinary Shares of 5p each at 63p per share
* #2.5 million (before expenses) raised via a Placing and represents all
new money
* The proceeds will be used for the financing of new sites, adapting
existing locations, increasing online sales, marketing and to augment the
Company's existing working capital facilities
* The Company was founded by CEO, William Hindmarch, in 1999 and started
trading at Heathrow's Terminal 4 in 2000
* BAA retains original stake post flotation
* The Company has expanded into eight BAA operated airports and two
airport terminals in Manchester and one in Luton, operated by Manchester
Airports Group plc and TBI plc respectively
* The Company is currently in discussions for the roll out of further
sites within a number of airport terminals both in the UK and
internationally. The Directors believe that this will result in an increase
in the number of sites operating in the current financial year
* The Directors have been approached by the operators of other retail site
locations, such as ferry terminals, railway stations, cinemas, supermarkets,
motorway service stations and shopping centres, and are continually
reviewing new sites as the Company develops its product range
* Charles Stanley Securities Limited is the Company's Nominated Adviser
and Broker
William Hindmarch, Chief Executive, commented,
"We believe that there are significant opportunities to develop our business,
which is well positioned to benefit from the rapid growth in UK airport
passengers. The DTI suggests that over the next 15 years in the UK alone numbers
will increase from 229 million per annum to 401 million per annum. Such strong
growth in our core market, in addition to our growing online capability and
opportunities to develop an online gaming service, create the foundations for
rapid growth."
Enquiries:
Best of the Best plc William Hindmarch, Chief Executive T: 020 7371 8866
Rupert Garton, Commercial Director
Biddicks Shane Dolan T: 020 7448 1000
Charles Stanley Securities Mark Taylor/Freddy Crossley T: 020 7953 2000
The Business
Best of the Best runs competitions, typically over a fixed period of two months,
with different price points depending on the prize. The competitions are run
simultaneously from both its airport terminal sites and online. Typically,
tickets at airport terminal sites are sold to passing airport passengers. Their
contact information, which is essential to entering the competition, is
collected and added to a database. Towards the end of the competition an email
is sent to the database of prior customers which stimulates further sales as
customers enter the competition online.
There are three different competitions that Best of the Best runs both at the
airport terminal sites and online, in the following formats as at 1 June 2006:
Supercar Competition Sportscar Competition Superbike Competition
Ticket Cost #60 #25 #10
Duration of Competition 2 months 2 months 2 months
Typical Prizes Aston Martin DB9 Porsche Boxter S Ducati 999S
Ferrari F430 Porsche Cayman S MV Augusta
Bentley Continental GT TVR Sagaris Triumph Rocket III
Aston Martin AMV8 + #10,000 Audi RS4 Harley Davidson V Rod
Range Rover Sport + #40,000 Mercedes SLK 55 AMG Yamaha FX Cruiser Wet Bike
The Company, since it began trading, has given away prizes with a value of over
#6 million from more than 100 competitions
Strong financial performance
Best of the Best has been profitable for the last two financial years. Total
turnover increased by 29.6 per cent between the years ending 30 April 2005 and
30 April 2006 and online sales by 100 per cent for the period to 30 April 2004
to 30 April 2006. The Directors believe that the planned increase in the number
of terminal sites operating will have a significant impact on turnover in the
current financial year.
30 April 30 April 30 April
2004 2005 2006
#'000 #'000 #'000
Turnover 2,904 3,663 4,748
Operating (loss)/profit (74) 112 615
(Loss)/profit before taxation (81) 103 591
Development of physical sites
The Company is in discussions for the roll out of further sites within a number
of airport terminals both in the UK and internationally. The Directors believe
that this will result in an increase in the number of sites operating in the
current financial year.
The Directors believe that by varying the price of ticket, type of prize and
nature of the game, including instant win tickets, at selected sites it would be
possible to target a wider audience of the departing passengers that pass by its
sites resulting in an increase in turnover.
Additionally, the Company will continue to improve the sites and make them more
attractive to passengers. Furthermore by basing the stands themselves on more
functional common design with recyclable parts the Directors consider they can
reduce the cost and improve the functionality of new stands.
The operating systems and software used by the Company allows the sites to be
fully scalable allowing the Company's sites to be easily reproduced with
identical systems and financial controls.
Furthermore, the Directors have been approached by the operators of other retail
site locations which they have placed under review such as ferry terminals,
railway stations, cinemas, supermarkets, motorway service stations and shopping
centres, and are continually reviewing new sites as the Company develops its
product range.
Development of online sales
Approximately 20 per cent. of the Company's revenue is derived from the higher
margin online sales of tickets which has increased by 24 per cent. for the six
months to 30 April 2006 compared to the same period in the previous year and
approximately 100 per cent. for the year to 30 April 2006 compared to the same
period in the year to 30 April 2004.
Following the growth and development of the Company's online sales, largely
through the conversion of customers using physical site sales, the Company
expects to increase its online product range. Online sales generate
significantly higher margins than sales in physical sites due to the latter's
higher operating costs, and the Company therefore intends to focus on marketing
strategies to increase the level of online sales. The Company has also developed
affiliate sales and marketing relationships driving a significant number of
individuals to its site and the Directors believe that these relationships can
be improved both in the UK and internationally. Currently the web site receives
an average of 250,000 unique visits per month and 1.5 million page impressions.
Best of the Best is in the early stages of developing its white labelled online
casino and poker business and the Directors are confident that this area of the
business offers wide ranging synergistic benefits and its contributions to
turnover will continue to increase.
Database
The Best of the Best database currently has approximately 150,000 individuals
registered and is growing at approximately 5,000 per month. The Directors
consider this database to be a significant asset for marketing both the
Company's core product, especially towards the end of competitions, and for
marketing complementary services, such as the online casino. Approximately 10
per cent. of the individuals on the database have played on more than one
occasion, with the highest spending 5 per cent. of such repeat customers having
spent on average of #290 per customer. There are also third party arrangements
for commercially utilising the database under review.
REASONS FOR THE PLACING
The net proceeds of the Placing available to the Company after the expenses of
the Placing and Admission will be # 2 million. The funds will be used for the
financing of new sites, adapting existing sites, marketing, investment in staff
and technology and the remainder to augment the Company's existing working
capital facilities.
The Company also relies on an experienced management team and skilled workforce
and the Directors believe that Admission will help the Company attract and
retain key employees whom the Company will be able to incentivise through the
grant of share options.
The Directors
William Hindmarch, aged 32 - Chief Executive
William graduated from the University of Durham in 1996 and joined Kleinwort
Benson as a graduate trainee. He founded the business in 1999. He has been the
Chief Executive of the Company for 6 years.
Michael Hindmarch, aged 66 - Non Executive Chairman
Michael qualified as a Polymer Technologist at the National College of Rubber
and Plastics Technology, London. He founded Plantpak (Plastics) Ltd., a
horticultural plastics company in 1970. In 1985 he reversed Plantpak into Falcon
Industries Plc, a listed conglomerate, becoming Chairman and CEO. Since 1990 he
has acted as an independent business consultant to a number of small companies.
Nick Ziebland, aged 53 - Non Executive Director
Nick joined BAA in 1987 as commercial manager looking after retail at Heathrow
Terminal 1, before moving on to become Head of Retail at Gatwick. In 1995 Nick
became Group Retail Strategy Director and took on a dual role in 2004, when he
also became Retail Director of Heathrow Terminal 5.
Rupert Garton, aged 31 - Commercial Director
Rupert graduated from the University of Durham in 1997 and joined JP Morgan as a
graduate trainee. After 18 months he moved to Dresdner Kleinwort Wasserstein to
take up a position in the equity capital markets division. He then spent a
further four years in Dresdner Kleinwort Wasserstein's corporate finance
division, working in London, Milan and Johannesburg. In 2003, he left to do a
Masters in Business Administration (MBA) at the Oxford Said Business School,
before joining a specialist furniture retailer with #10 million turnover as
Commercial Director. He joined the Company in January 2006.
William Henbrey, aged 60 - Non Executive Finance Director
William, a Chartered Accountant, was a partner in BDO Stoy Hayward LLP, London
from 1978 until his retirement from the firm in June 2006 and was head of the UK
Betting & Gaming and Leisure & Hospitality Units.
He has been involved in all aspects of the betting and gaming sector for over 30
years. He has acted for a wide range of clients in both the private and quoted
arena and, in recent years, leading online gaming and sports book operators. He
has extensive experience of advising and assisting these clients with business
and strategic planning, flotations, acquisitions and disposals.
Current Airport Locations
Existing Best of the Best Departing Passenger
Airport Terminal Sites Numbers during 2005
Edinburgh 3,917,697
Glasgow 4,392,434
Heathrow Terminal 1 7,076,764
Heathrow Terminal 3 9,534,282
Heathrow Terminal 4 8,072,121
Gatwick North Terminal 6,765,679
Gatwick South Terminal 9,566,040
Luton 4,573,888
Manchester Terminal 1 5,243,136
Manchester Terminal 2 3,616,141
Stansted 11,018,684
Total 73,776,866
This information is provided by RNS
The company news service from the London Stock Exchange
END
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