Displaying luxury cars as competition prizes in airport terminals and online, Best of the Best is showing investors, including 13.76% shareholder BAA, some flighty growth rates.

Interim figures to October showed sales increased 67.3% to £3.6m and a swing from losses of £53,000 to pre-tax profits of £453,000 – Best of the Best closed the period with £1.7m of cash, equal to 30% of its market value, lately lower on illiquidity issues and poor investor sentiment towards smaller companies.

Chief executive William Hindmarch reported ongoing solid trading for the first half, with changes to competition structures proving popular, airport trading remaining strong and new airport site openings making positive contributions to the numbers. Significantly, Best of the Best has signed a seven-year ‘pan-airport’ contract with airport operating giant BAA, covering seven of its existing airport sites, nicely underpinning its position in the UK market and raising entry barriers.

A new ‘landmark’ site opens at Heathrow Terminal 5 in March and Best of the Best is expanding overseas having inked its first international deal – a contract for Copenhagen Airport. Moreover, the group’s online customer base continues to grow fast and build revenue, helped by the introduction of new ‘Instant Win’ products and a loyalty programme.

For the year to April, Charles Stanley’s Ben Archer forecasts increased profits of £1.1m, up from £700,000, on turnover of £7.5m (2007: £5.9m), giving an increase in earnings from 4.4p to 6.04p. We think Best of the Best has good recovery potential, with the forward earnings multiple of 7.5 failing to reflect earnings growth and a full-year dividend on the way. Speculative buy.

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