Best Of The Best Share Discussion Threads

[g2theary] 13/8/2021 13:38

We'll see I can afford to hold and top up :)

[the canadian mounted] 13/8/2021 13:38

Excellent opportunity to top

[jackson83] 13/8/2021 13:37

200p true value - has further to drop next week

[g2theary] 13/8/2021 13:36

He sold out a while ago ... google it he's just commented on Twitter today :) I've never held this before I'm here for the gamble ... looks good this Bargin drop :))

[jackson83] 13/8/2021 13:34

Ticking time bomb after the directors sold out knowing we would receive more bad news RED FLAGS ... STRONG SELL

[the canadian mounted] 13/8/2021 13:32

Priming rocket 🚀 for take off

[the canadian mounted] 13/8/2021 13:31

Looking good going forward

[jackson83] 13/8/2021 13:25

Who is this large seller named Funky ?

[g2theary] 13/8/2021 13:22

Get ready for the up tick towards the close :) it was way over priced but the economic scenario has changed. It will have however retained a lot of customers that never would have punted on websites like this... it looks like it's been brought down to a level that reflects growth and retained value from pandemic customers... not been in here before but got just under 2000 today :) happy to hold :)

[az4hr] 13/8/2021 13:21

held these for nearly 5 years by longest hold so depressing what has happend. Days like this i feel like the bad days on the markets are so much worse than the nice days makes you feel like chucking it all in amd giving up. Congratulations to all those that got out before the sh8t hit the fan just wish i listened and took heed. A lesson i dont think i will forget in a hurry.

[hotaimstocks] 13/8/2021 13:11

FUNKY FINANCE breaking news !!!! HAS SOLD OUT.

[hotaimstocks] 13/8/2021 12:57

hard to sell volume now ? this will drop a lot lower next week RED FLAG emergency sell folks as why hold a ticking time bomb / expect another profits warning before xmas

[monte1] 13/8/2021 12:57

The core dividend is peppercorn.

Using Special Dividends gives them flexibility to change with the wind.

With current events I can’t see and special divi this year.

[transhoneyqueens] 13/8/2021 12:50

cash value 70p

[transhoneyqueens] 13/8/2021 12:49

institutional will dump next week and expect 300p

[bad robot] 13/8/2021 12:47

Good day all

I bought 1.2k shs for fun. Hoping to sell at 1070-1100p

BR
IN BR WE TRUS
RED MERCURY CREW.

[hotaimstocks] 13/8/2021 12:39

can see this gong to 200p within a few months.

[transhoneyqueens] 13/8/2021 12:35

400p is ok for now and could go bust if sales keep falling ... suspension ?

[monte1] 13/8/2021 12:04

I wonder if increasing competition from Omaze and the like is a factor in the current woes?

[the canadian mounted] 13/8/2021 12:02

Let’s just see where the derampers disappear to when these climb up
If you have invested your own dosh and not
T10 it then relax and remember it’s paying a dividend

[farnesbarnes] 13/8/2021 11:45

Small Caps Live Friday 13th August
Best of The Best (BOTB) - Trading Statement
I'm going to take this line by line, and touch on the background as relevant.
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.
So that's since their 30th April year end.
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.
At the time they said:
We are excited about the opportunities that the year ahead holds for BOTB, with a recovering economy and hopefully a return to normality. However, in contrast to the summer 2020 period, we have experienced somewhat of a reduction in customer engagement since the latest easing of lockdown restrictions on April 12, 2021, specifically relating to the understandably long-awaited re-opening of hospitality and non-essential retail. We are closely monitoring this, but with our flexible model, growth strategy and plans for the year ahead, we expect customer engagement to return to normal levels before too long. I look forward to updating shareholders in due course.
That's my emphasis. Of course, the word "normal" is key. If they return to "normal", pre-covid levels then they still look very expensive. Presumably, they were hoping to return to some kind of "new normal", "permanent plateau" etc.
Today they go on to give lots of detail:
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.
So of course, the question is whether those final 15 weeks of FY 2021 were representative of the year as a whole, or represented the high point.
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.
My recollection is that the pandemic started before that, but of course, they have aligned to their financial years. By "expected behaviour", what they are presumably talking about is higher attrition of relatively new customers. I've looked and I can't really tell. That's two of the last 15 weeks of FY 2020. Clearly, the higher the levels of attrition, the harder it is to stand still, and the more they need to spend on advertising.
It is the third group where they are really having difficulties:
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.
So the effect is:
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.
Perhaps from this, the attrition could be calculated? There has been lots of talk of low barriers to entry here and more recently emerging competitors. It may be that the lower engagement that they have put down to the end of the lockdown is actually due to these competitors, and will only get worse. But what is certain is that these competitors are bidding up ad-words prices. To reiterate:
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.
Recall that in the past they got "free advertising in two ways":
1) Presence at airports - now all closed
2) Publicity for winners in local newspapers.
In the results they commented:
Whilst the COVID-19 restrictions in place during most of the year significantly curtailed the ability of our presenting team to surprise winners at home or at work, we were pleased that the video calling alternatives available were well received by our players and continued to provide the engaging content for which BOTB has become so well regarded.
So, perhaps with the end of lockdown will come more opportunities for promotion from surprising winners. This is probably not local TV material, and perhaps the newspapers are getting wise to this, but it may make for some great viral tic-tock videos.But they have still given up their only physical presence, and although clearly airports are bad news at the moment, this puts them in the hands of search engine and social media monopolists.
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.
So that's the flip side of operational gearing. Other companies that have done well have higher variable costs including performance-related pay. They said before they expected things to "normalise".
Again, how conservative these guesses are all comes down to how strong the comparators were.15% down on an all-time peak last 15 weeks of FY 2021 is NOT conservative. And also about the basis for the forecast being that revenue trends continue (i.e. the down 15%).
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.
I don't like my management being "hopeful". And again, nobody knows what "normal" is / will be. I thought they were madly overpriced even at £20, and from then on things just went crazy...for a while. But it is important to note that they'd come off significantly in advance of today's statement, and not just because the formal sales process was ended.
How to value? Clearly, this is exceptionally difficult given the wide variance in possible outcomes. So let's look at a brokers note. This is what finnCap say:


So what would you say normalised EPS is there? 60p? Given the regulation risk, which I would say is even higher than the spreadbetters, perhaps a P/E of 10 is justified? So a valuation of 600p.
One more thing. Why would the management guide forecasts high, when:
Best of the Best PLC (LSE: BOTB), the provider of online competitions to win cars and other prizes, announces that it has been informed by the Selling Directors that, further to the announcement made at 6.00 p.m. on 31 March 2021 (the "ABB Announcement"), they have successfully sold a total of 2,469,352 Placing Shares at a price of £24.00 per Placing Share via an oversubscribed Placing. The Placing Shares in aggregate represent approximately 26.6 per cent. of the Company's issued share capital prior to the exercise of options.
The board are still in place and so perhaps they are now in it for the long term. In which case setting expectations low and consistently beating them would be the right approach. So, if you like the company and are not worried about regulation, 800p might be quite attractive.
Have a great weekend everyone!