Best of the Best to reward shareholders following strong first half

Best of the Best stormed higher on Wednesday after announcing that it intends to reward shareholders following a first half that saw the company beat expectations and more than triple its profits.

The competition organiser said it intends to return surplus cash to shareholders by way of a tender offer for up to 7.1% of its share capital at a price of 485 pence per share, with £3.5m being paid to shareholders if the maximum number of shares under the tender offer is acquired.

The AIM traded company's generous attitude came as it reported that profit before tax for the six month period ended 31 October reached £3.6m, up 279% compared to the same period last year, after £4.5m of exceptional income was recognised as a result of the company's claim for overpaid VAT in prior years.

Adjusted profit before tax, which eliminated the impact of this exceptional income, increased by 14.7% to £1.1m, while revenue increased by 29% to £7.1m.

William Hindmarch, chief executive of BOTB, said: "I am pleased to announce good progress with an encouraging set of interim results as the business continues to grow both revenues and profits. Our marketing strategy has continued to perform well and driven strong revenue numbers as well as promising growth in newly acquired customers. We have one remaining physical location at Birmingham Airport and revenues are now generated almost exclusively online."

The company said it has now completed its move away from physical retail locations to become an online-focused operation, a move that was catalysed by continued rent and staffing costs for store locations.

BOTB had cash and cash equivalents of £6.9m at 31 October, up from £2.0m at the same point the year before.

"Trading since the period end has been encouraging, with the company well placed for future growth and currently operating ahead of management expectations for the full year. The impending increase in Remote Gaming Duty (RGD) will impact margins going forward but we are exploring options to mitigate this effect. We look forward to updating shareholders with further progress in due course," said Hindmarch.

Best of the Best's shares were up 31.82% at 290.00p at 1307 GMT.