By Samuel Indyk
Investing.com – Best Of The Best (LON:BOTB) shares tumbled after the company issued a profit warning as trading softened since the UK started to ease COVID restrictions from the middle of April 2021.
The AIM-listed company said existing customers signed up prior to May 2020 remain loyal and engaged but revenues they generate are circa 6% lower than during the final 15 weeks of the financial year ended 30th April 2021, given newfound freedoms, sporting events and ability to travel.
Customers signed up between May 2020 and April 2021 have performed in line with the company’s expectations.
More worrying for the company is the cost of acquiring new customers. Best of the Best said this has increased “significantly” in recent months with the cost per thousand impressions on social media platforms increasing by up to 60%.
As a result, new customer revenues are circa 40% lower than during the final 15 weeks of the prior financial year.
The company said that due to the substantially fixed cost model, the lower revenues will have a disproportionate impact on margins, profitability and earnings for the financial year ending 30th April 2022.
The new guidance the board is providing is circa 62% lower than current market forecasts with a commensurate impact on the following financial year.
“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 said in a statement.
Best of the Best added that it has cash in excess of £6 million as of 12th August 2021.
At 10:00BST, shares in Best of the Best were trading lower by 46% at 802.55 pence per share.
Best of the Best shares tumble following profit warning
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