Airport disruption caused by volcanic activity in Iceland was behind last year’s profit shortfall at Best of the Best, which displays luxury cars as competition prizes within airport terminals and online.
Best of the Best, which trades at airports including Heathrow and Manchester and boasts partnerships with car brands including Aston Martin and Maserati, enjoyed solid trading during the year to April, despite relatively low passenger numbers.
However, profits were curtailed by volcanic ash disruption at the tail-end of the year, which led to the closure of airport sites in April and caused pre-tax profits to decline from £520,000 to £480,000 as turnover eased off to £7.3m (2009: £7.46m). Strongly cash-generative, Best of the Best grew cash balances 15% to the best part of £2.3m and upped the dividend 9% to 1.2p.
Contract highlights included a deal with Dublin Airport Authority to open a site in the new Terminal 2 – this opens in November – whilst Best of the Best says it is in discussions with both domestic and international airport operators with a view to securing further sites.
William Hindmarch, chief executive, believes significant investment in the website has boosted Best of the Best’s organic growth potential. Traditionally, online players have been acquired by way of its physical airport sites, but the new platform should drive a step-change in growth at the online business, which now accounts for 21% of the top line.
With strong cash balances, Best of the Best looks well placed to further develop its online business and open new sites both at home and internationally. Trading at a discount to £4.3m of net assets, Best of the Best, whose shares have fallen from their 2007 AIM peak of 80p, represents a worthy recovery punt.
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