Goals Soccer Centres Reveals A 2% Like-For-Like Sales Rise, But Will Cut Further Expansion Plans

Goals To Focus On Cash Generation After US Venture Scores £2m Own Goal

Goals Soccer Centres has reported a 6% rise in overall sales and a 2% rise in like-for-like sales in its year end statement, released on Thursday.

The company, which runs more than 40 five-a-side football centres in the UK, is also celebrating after it successfully appealed HMRC's decision to charge VAT on league income during the year.

However, it appears that the group is less bullish about 2013, choosing to halt all expansion plans and focus on cash generation strategies instead.

Redmayne Bentley stock broker Phil Wong told Huff Post UK: "Shares in Goals Soccer Centres were lacklustre this morning, as the five-a-side soccer centre operator announced trading in-line with market expectations. Overall sales were 6% higher to £32 million, though the group decided to postpone any further new site openings.

"The board commented that this will allow them to focus on cash generation and return on capital from its recently owned centres. The move to online will be a focus for 2013, with Goals planning to improve its offering and develop its social media presence. Shares recovered somewhat last year, though still trade at around a quarter of their all-time highs."

The Goals statement said the group would work to increase brand awareness through greater investment in social media in 2013.

Following marketing campaigns during February and September 2012, Goals has entered into a new brand partnership with talkSPORT, providing access to airtime at a significant discount to market rates.

The first official advertising campaign in partnership with talkSPORT took place earlier this year.

Nick Hood, business analyst at Company Watch, told Huff Post UK that the promotional tie up with talkSPORT was "a bold step" and could well illustrate how well Goals can weather the squeeze on consumers' disposable incomes.

“Goals has paused for breath, cutting back on new investment to use cash flow to pull its debt levels back from a figure close to 100% of its net worth," he added. "This recognises that such high gearing is less than ideal for a business with most of its value invested in specialist real estate."

Goals also discussed its venture into the American market; Goals invested £4.7m to construct a facility in Los Angeles last year, but revealed the board had reviewed the net present value of the Los Angeles centre based on current trading levels and this has indicated that the value is impaired by £2m.

"Goals has also learnt an expensive £2m lesson from its initial attempts to enter the US market, which is clearly turning out to be more challenging venture than anticipated," said Hood.

The end of year results comes shortly after Goals Soccer Centres shareholders narrowly decided to reject a £73m takeover bid from the Ontario Teacher' Pension Plan, a Canadian pension fund which offered 144p a share in August 2012.

Sir Rodney Walker, non-executive chairman of Goals, said in a statement: "Following the result of today's court meeting, the non-executive directors and executive management will continue to focus on delivering the group's strategy of delivering a best-in-class 5-a-side football experience to customers in the UK and beyond."

It is believed those who voted against the takeover regarded the offer price as too low - but the value of Goals had been challenged after Powerleague's owner Patron Capital confirmed it would not make an offer for its rival earlier this month.

Matt King, head of research for leisure at Mintel, said at the time of the takeover bid that the leisure sector had remained fairly resilient during the recession, and Goals' results in particular had been doing well.

"There's been a long term leisure trend towards increased participation - although this has been slightly tempered by the recession," he told The Huffington Post UK.

King also noted that in a time-poor society, the need for shorter bursts of activity had seen a surge for five-a-side football over the more traditional 11-a-side game. Indeed Football Association statistics have supported the theory that the shift towards five-a-side becoming more popular was set to continue.

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