GOAL.L Regulatory News (GOAL)

26 Feb 2007 07:01

Goals Soccer Centres PLC26 February 2007 Goals Soccer Centres plc Preliminary Results for the year ended 31 December 2006 Goals nets 78% profit increase Goals Soccer Centres plc ("Goals" or the "Company") is the premier operator of 'next generation' 5-a-side soccer centres across the UK. Goals currently has 22centres and has established a well progressed pipeline of sites to continue itsproven rollout concept. Key Points Financial Prime locations, quality facilities and outstanding customer service hasresulted in another record result underpinning our market position for thelong-term • Sales up 43% to £16.0m (2005: £11.2m) • EBITA* up 67% to £6.1m (2005: £3.6m) • EBITA profit margin increased by 5% to 38%, benefiting from further economies of scale, increased utilisation and tight cost control • Profit before tax* up 78% to £4.7m (2005: £2.6m) • Basic earnings per share* up 87% to 7.3p (2005: 3.9p) • Like for like sales growth of 9% • Final ordinary dividend proposed in respect of the current year of 0.65p per share making 0.95p for the full year, an increase of 90% on the previous year dividend * The company has adopted FRS 20 - share based payments in 2006 and as a resultthe profit and loss account for 2005 has been restated. This has reduced theprofit for the year ended 31 December 2006 by £203,000 (December 2005:£162,000). Rollout Small-sided football continues to grow in both stature and popularity. The Boardbelieves that Goals "next generation" concept is well placed to capitalise onthis trend. • Five centres added during the year • On schedule to open five centres during 2007 of which one is already open and one is under construction • On schedule to open a minimum of five centres during 2008 and to increase the rate of openings thereafter. Current Trading • Trading has remained strong since the year end Keith Rogers, Managing Director of Goals said: "I am delighted to report another record set of results for the Company withprofits up 78%. This is an outstanding performance, demonstrating the demand inthe market for our 'next generation' concept. We have doubled the number ofcentres since flotation in December 2004 and our site pipeline is strong. TheCompany has continued to trade strongly since the year end." 26 February 2007 Enquiries:Goals Soccer Centres plc Today: 020 7457 2020 Thereafter: 01355 234 800Keith Rogers, Managing DirectorBill Gow, Finance Director KBC Peel Hunt Tel: 020 7418 8900David DaviesMatt Goode College Hill Tel: 020 7457 2020Matthew Smallwood Jamie Ramsay Chairman's statement I am pleased to report Goals Soccer Centres' results for the year ended 31stDecember 2006. A great result for the 2006 season! This has been another record year as Goals continues to deliver strong financialperformance. Sales increased by 43% to £16.0m (2005: £11.2m). EBITDA increasedby 59% to £7.2m (2005: £4.5m), and EBITA increased by 67% to £6.1m (2005:£3.6m). This resulted in a 75% increase in profit on ordinary activities beforetax and amortisation to £4.8m (2005: £2.8m), a 78% increase in profit before taxto £4.7m (2005: £2.6m), a 79% increase in basic earnings per share (beforeamortisation) to 7.5p (2005: 4.2p) and an 87% increase in earnings per share to7.3p (2005: 3.9p). The Board intends the Company will continue to retain the majority ofdistributable profits and cash flows to contribute towards the funding of itsplanned rollout of new centres. However, the Directors have proposed a finalordinary dividend in respect of the current year of 0.65p per share making 0.95pfor the full year (2005: 0.5p). This represents a 90% increase and the Boardintends to continue to propose to pay dividends each year growing at least asfast as earnings. Subject to approval at the Annual General Meeting to be held on 20 April 2007,the final dividend of 0.65p per share will be paid on 27 April 2007 toshareholders on the register on 30 March 2007. Our staff are focused on and our systems are geared towards maximisingutilisation. I am pleased to report that like-for-like sales increased byapproximately 9% during the year. Our focus on prime locations, qualityfacilities and outstanding customer service has led to strongly increasedrevenues from existing centres and new openings. The company has adopted FRS 20 - share based payments in 2006. As a result theprofit and loss account for 2005 has been restated. This has reduced the profitfor the year ended 31 December 2006 by £203,000 and December 2005 by £162,000. Taking 5-a-side into the premier league The popularity of 5-a-side football continues to grow. Football is the mostpopular sport in the UK and 5-a-side football, as a commercial activity,continues to grow rapidly amongst all age groups and both genders. This has beenacknowledged by the Football Association in their formal recognition of thesmall sided game. The Board believes the unique Goals concept positions theCompany well to capitalise on this popularity and exploit the continuing majorcommercial opportunity to satisfy significant potential and latent demand in themarket. The Board recognises the long-term potential of the small sided football market.Goals is the premier operator in the UK - a position maintained by ourcommitment to prime locations, quality facilities and excellent customerservice. We believe that this will continue to underpin Goals premier marketposition over the long term. It is our aim to continually exceed customerexpectations and to provide the best possible customer experience. Our strategy remains focused and straightforward: • To continue to innovate and lead the industry, • To accelerate our rollout of "next generation" soccer centres in prime locations, • To maximise revenue from existing centres through outstanding customer service, • To continue to build a positive national 5-a-side brand and to develop marketing partnerships with operators of recognised complementary brands, • To continue to generate high returns on capital. We continue to make excellent progress in all these areas. Goals has acquired an enviable reputation through its commitment to quality andservice, indeed all pitches at all centres are 3G artificial grass, a uniquemarket position. This has led to many innovative partnerships with schools,local authorities and the private sector. Our commitment to quality and ourpositive community policies have led to recognition and support from sportingorganisations and government bodies. The FA has introduced a Small-SidedFootball Award to aid the continued development of the sport by offeringrecognition and benefits to those providers that attain their quality standards.Goals welcomes this initiative and has applied for the Award for all its centresin England. The small sided game continues to grow in both stature and popularity. TheFootball Association and UMBRO have partnered to launch a brand new nationalfive-a-side competition, 'The FA UMBRO Fives'. This exciting development is theonly competition of its kind and is being heralded as The FA Cup of five-a-sidefootball - the biggest and most prestigious Small Sided Football tournament inthe country. Like The FA Cup, competing teams have the chance to progress to thefinal stages to be held at the new Wembley Stadium. Our brand partnership with UMBRO, the Football Association's "Official Partnerfor Small Sided Football" has now been implemented. This has led to many jointinitiatives aimed at increasing both participation in grassroots football andawareness of the Goals brand nationally. Our website now incorporates a 'Kit-Shop' operated in association with UMBRO which has proven to be extremelypopular. This partnership is in line with Goals strategy of working with brandsenjoying a strong association with football. In addition to this we haverecently renewed our sponsorship agreement with Powerade, 'The Official SportsDrink' of The 2008 UEFA European Championship. 5-a-side is now a whole new ball game Goals is the premier operator in the market. Our "next generation" offeringcomprises the latest artificial pitch technology, high quality facilities andsuperior customer service. During 2006, we continued to evolve and improve theGoals concept. We continue to invest in our advanced management andcommunication systems to improve customer experience and increase income. Ournew online 'Team Manager' facility has been implemented and has attractedsignificant take up among customers. We appreciate the benefits that could accrue from online booking for ourcustomers and are working to implement this over the next few months. We havealready implemented the first stage of this with online booking for tournamentteams. Goals benefits from a high level of customer satisfaction identified throughmeasured feedback. We aim to continually exceed customers' expectations and toprovide the best possible customer experience. New signings Since the Company listed on AIM in December 2004 we have opened 11 additionalcentres representing a 100% increase. Goals continues to develop its strong site pipeline to provide for future centreopenings. We have developed a well defined and proven site selection strategywhich is fundamental to the ongoing success of the business. We continue to besuccessful in identifying and developing high profile sites in densely populatedareas. Our reputation has enabled us to pursue sites through partnership arrangementswith the private sector, schools, local authorities and colleges. This isendorsed by our recent selection by The Royal Parks to develop a facility in TheRegent's Park, London, a decision based on both financial and qualitativemeasures. We continue to be innovative in seeking out new and special developmentopportunities, as demonstrated by the opening of Goals Birmingham at Star City,Europe's largest urban entertainment complex. This exciting centre features 10pitches developed on the top deck of a multi-storey car park adjacent to anelevated section of the M6 motorway resulting in both high visibility andaccessibility. This facility has been submitted for a national design award byBirmingham City Council. Five new centres were added during 2006 at Sutton, Southampton, Birmingham (StarCity), Plymouth and Bradford. We are confident of opening a minimum of five new centres during 2007. GoalsPerry Barr has already opened, Goals Hayes is under construction andconstruction work is due to start shortly on a further centre. Our site pipeline continues to strengthen and we are confident we will open aminimum of five centres during 2008 and increase the rate of openingsthereafter. Goals in the community Our commitment to youth sports development in the communities in which weoperate is evidenced by our Community Access Policy providing free access to keyuser groups during off-peak hours. By working in partnership with schools, localauthorities and government bodies we have improved access for children toquality sports facilities. Every week, thousands of children benefit from free use of Goalsstate-of-the-art facilities. We therefore take our corporate and socialresponsibilities seriously and will only enter into partnership and sponsorshiparrangements which meet our strict ethical codes. It is the policy of Goals to strive for environmental excellence in all aspectsof management and operation. In recent years the Company has continuouslyimproved environmental performance through an ongoing reduction in businesscosts and waste. The Board plan to continue to increase awareness ofenvironmental issues across the Company. The Board recognises the significance of effective health and safety managementand is committed to providing a safe, secure and healthy environment for bothcustomers and employees. The Company has a detailed health and safety managementplan in place and this is reviewed regularly by the Board. A team game The Directors continue to strengthen the management team to match the Company'scontinued growth. The delivery of a quality service and experience to ourcustomers is down to the professionalism, knowledge and passion of our staff.Our future staff requirements are provided through ongoing training andpromotion from within. I should like to thank all Goals staff for their majorpart in delivering another year of operational and financial success. Financial review This has been another record year as the Goals concept continues to deliverstrong financial performance. Sales increased by 43% to £16.0m (2005: £11.2m). This included a contribution of£1.6m from the new centres opened during the year. This strong performance is further evidence of the Company's proven "nextgeneration" concept and the focus on increasing revenues not only fromdeveloping its pipeline of new sites but also from its existing centres. Ourstaff continue to focus on customer retention and maximising pitch utilisationand our systems are designed to assist the staff to achieve this objective. I ampleased to report like-for-like sales growth of 9% in the year despite a minorimpact from the World Cup during June. By targeting the corporate sector throughthe offering of World Cup themed corporate events, we minimised the impact fromloss of play during major World Cup games. EBITDA increased by 59% to £7.2m (2005: £4.5m), and EBITA increased by 67% to£6.1m (2005: £3.6m). The gross profit margin was maintained at 87%, the EBITDAprofit margin increased to 45% (2005: 41%) and the EBITA profit margin increasedto 38% (2005: 33%). The improvement in margins reflects the ongoing increase inutilisation across the centres, economies of scale and tight cost control. Cash inflow from operating activities increased by 52% to £7.3m (2005: £4.8m).We invested £13.7m in capital expenditure during the year, £12.6m of whichrelates to investment in new centres. This has resulted in an increase ininterest costs from £0.9m to £1.3m. Profit on ordinary activities before tax and amortisation has risen by 75% to£4.8m (2005: £2.7m) and profit before tax increased by 78% to £4.7m (2005:£2.6m). The tax charge for the year is at an effective rate of 35% (2005: 38%). Twopercent of the tax charge related to disallowable charges for share basedpayments and goodwill amortisiation (2005: 3%). This resulted in a 79% increase in basic earnings per share (beforeamortisation) to 7.5p (2005: 4.2p) and an 87% increase in basic earnings pershare to 7.3p (2005: 3.9p). The company has adopted FRS 20 - share based payments in 2006 and as a resultthe profit and loss account for 2005 has been restated. This has reduced theprofit for the year ended 31 December 2006 by £203,000 (December 2005:£162,000). International Financial Reporting Standards will be adopted from 1 January 2007. Net Debt at 31 December 2006 was £23.9m (2004: £15.5m). This level of debtrepresents 135% of shareholders' funds and 54% of tangible fixed assets. We haveput in place a new £30m five year revolving credit facility with HBoS. This willfully fund our objective of 10 further centres over the next two years andprovide a significant contingency for further centre openings. EBITDA interestcover for the year was 5.6 times (2005: 5.1 times). The Company has interestrate hedging in place which fixes borrowing costs at 5.85% on £10m and thebalance is at a margin of 1.1% over LIBOR. Current trading The Company has continued to trade strongly since the year end. We remainconfident in our business model and product, and look forward to 2007 and beyondwith enthusiasm in terms of trading performance and new centre openings. Sir Rodney Walker 26 February 2007Chairman The Preliminary announcement was approved by the Board of Directors on 23February 2007. Profit and loss accountfor the year ended 31 December 2006 Note 2006 2005 (as restated see note 1) £000 £000 Turnover 2 15,952 11,166Cost of sales (2,098) (1,506) _______ _______ Gross profit 13,854 9,660Administrative expenses- general (7,763) (6,023)- goodwill amortisation (122) (122) _______ _______ Operating profit 3 5,969 3,515Other interest receivable and similar income - 2Interest payable and similar charges 4 (1,282) (888) _______ _______ Profit on ordinary activities before taxation 4,687 2,629Tax on profit on ordinary activities 5 (1,647) (1,007) _______ _______ Profit on ordinary activities after taxation andfor the financial year 3,040 1,622 _______ _______ _____________________________________________________________________________________________________________ Earnings per ordinary share- Basic 7 7.3p 3.9p- Diluted 7 7.0p 3.9p_____________________________________________________________________________________________________________ Balance sheet at 31 December 2006 Note 2006 2005 £000 £000 £000 £000Fixed assetsIntangible assets - goodwill 8 1,726 1,848Tangible assets 9 44,317 31,221 ______ ______ 46,043 33,069Current assetsStocks 240 121Debtors 650 608Cash in hand 333 216 ______ _______ 1,223 945Creditors: amounts falling due within one 10year (5,310) (2,703) ______ _______ Net current liabilities (4,087) (1,758) ______ ______ Total assets less current liabilities 41,956 31,311 Creditors: amounts falling due aftermore than one year 11 (22,828) (15,680)Provisions for liabilities and charges (1,480) (891) ______ ______ Net assets 17,648 14,740 ______ ______ Capital and reservesCalled up share capital 104 104Share premium account 12,679 12,679Profit and loss account 4,865 1,957 ______ ______ Equity shareholders' funds 17,648 14,740 ______ ______ Cash flow statementfor the year ended 31 December 2006 Note 2006 2005 £000 £000 £000 £000 Cash inflow from operating activities 3 7,328 4,833Returns on investments and servicing offinanceInterest paid (1,278) (832) ______ ______ Net cash outflow for returns on investmentsand servicing of finance (1,278) (832) Taxation (349) - Capital expenditurePayments to acquire property, plant and equipment (13,722) (9,334) ______ ______ Net cash outflow for capital expenditureand financial investment (13,722) (9,334) ________ _______ Cash outflow before financing (8,021) (5,333) Equity dividends paid (335) - FinancingExpenses paid in connection with share - (176)issueBank loans received 8,430 6,156Loan notes and vendor loans redeemed (60) (595) _______ _______ Net cash inflow from financing 8,370 5,385 _______ ______ Increase in cash in the period 14 52 _______ ______ Reconciliation of net cash flow to movement in net debt 2006 2005 £000 £000 Increase in cash in the period 14 52Cash inflow from bank finance (8,430) (6,156)Loan notes and vendor loans redeemed 60 595 _______ _______ Change in net debt resulting from cash flows (8,356) (5,509)Non cash movement - amortisation of (2) (17)finance costs- finance costs capitalised 14 - _______ _______ Movement in net debt in the year (8,344) (5,526)Net debt at the start of the year (15,530) (10,004) _______ _______ Net debt at the end of the year 13 (23,874) (15,530) _______ _______ Notes (forming part of the financial statements) 1 Accounting policies The accounting policies which with the exception of FRS 20 : Share basedpayments have been applied consistently in dealing with items which areconsidered material in relation to the Company's financial statements are notedbelow. In these financial statements, FRS 20: Share based payments has been adoptedfor the first time The company has restated the prior year profit and lossaccount to ensure consistency with accounting policies applied in 2006. Theeffect of adopting FRS 20 in the current year is in a decrease in profit for theyear of £203,000 (2005: £162,000). Basis of preparation The financial statements have been prepared in accordance with applicableAccounting Standards, and under the historical cost accounting rules. TheCompany has a number of subsidiary undertakings, none of which trades, andaccordingly consolidated financial statements have not been prepared. The financial information set out herein relating to the Company for the yearended 31 December 2006 and the year ended 31 December 2005 does not constitutestatutory accounts within the meaning section 240 of the Companies Act 1985.Statutory accounts for the year ended 31 December 2005 have been delivered tothe Registrar of Companies in Scotland. The auditors' report on those accountswas unqualified and did not contain a statement under section 237(2) or (3) ofthe Companies Act 1985. 2 Segmental reporting All turnover and operating profit is derived from the operation of outdoorsoccer centres within the United Kingdom. 3 Operating profit (a) Operating profit is stated after charging: 2006 2005 £000 £000 Auditors' remuneration:- audit of these financial statements 30 23- other services relating to taxation 8 3- services relating to corporate finance transactions enteredinto or proposed to be entered into 30 -Depreciation written off tangible fixed assets 1,103 903Amortisation of goodwill 122 122Rental under operating leases- plant and machinery 33 19- others 742 403 (b) Reconciliation of operating profit to cash flow from operating activities: 2006 2005 £000 £000 Operating profit 5,969 3,515Depreciation 1,103 902Share based payments 203 162Amortisation of goodwill 122 122Increase in stock (119) (37)Decrease / (Increase) in debtors (345) (81)Increase/(decrease) in creditors 395 250 _______ _______ Net cash inflow from operating activities 7,328 4,833 _______ _______ 4 Interest payable and similar charges 2006 2005 £000 £000 On bank loans and overdrafts 1,223 748On all other loans 57 123Amortisation of finance costs 2 17 _______ _______ 1,282 888 _______ _______ 5 Taxation 2006 2005 £000 £000Current taxUK corporation tax on profits for the year - current year 1,090 367- prior year (32) - _______ _______ 1,058 367 _______ _______ Originating timing differences 589 522Increase due to change of rates 19% to 30% - 118 _______ _______ Total deferred tax 589 640 _______ _______ Tax on profit on ordinary activities 1,647 1,007 _______ _______ Factors affecting the tax charge for the current year The current tax charge for the year is £1,090,000 (2005: £367,000). This isbelow the standard rate of corporation tax in the UK of 30% (2005: 30%). Thedifferences are explained below: 2006 2005 £000 £000Current tax reconciliation (as restated)Profit on ordinary activities before tax 4,687 2,629 _______ _______ Current tax at 30% (2005: 30%) 1,406 788 Effects of:Expenses not deductible for tax purposes 37 29FRS 20 charge 60 49Depreciation on assets not qualifying for capital allowances 176 30Capital allowances in excess of depreciation (589) (522)Marginal relief - (7) _______ _______ Total current tax charge 1,090 367 _______ _______ 6 Dividends 2006 2005 £000 £000 Dividends paid 209 - - 2005 final- 2006 interim 126 - _______ _______ 335 _______ _______ The directors have proposed a final ordinary dividend in respect of 2006 of£272,245 (2005:£209,419). As required by FRS 21: Events after the Balance SheetEvent Date, this has not been included in creditors as it was not approvedbefore the year end. 7 Earnings per share Earnings per 0.25p ordinary share is calculated by dividing the earningsattributable to ordinary shareholders by the weighted average number of ordinaryshares in issue during the period. 2006 Weighted 2006 2005 Weighted 2005 Profit for the average earnings per Profit for Average earnings financial number of share the financial number of per share year shares year (as restated) shares (as restated) £000 Number p £000 Number p Basic earnings pershare 3,040 41,883,788 7.3 1,622 41,883,788 3.9 Diluted earningsper share 3,040 43,503,685 7.0 1,622 41,883,788 3.9 Diluted earnings per share calculated using the earnings divided by the weightedaverage number of shares in issue for the year ended 31 December 2006 plus alloutstanding relevant share options at that date. The share options disclosed in the remuneration report are contingent upon thegrowth of future earnings. Under FRS 22: Earnings per Share, these shareoptions are treated as contingently issuable shares for the purposes ofdetermining diluted earnings per share. Diluted earnings per share are calculated as follows: 2006 2005 Profit for the financial year £3,040,000 £1,622,000Weighted average number of shares 41,883,758 41,883,788Effect of dilutive share options 1,619,897 - Diluted weighted average number of shares 43,503,685 41,883,788 Diluted earnings per share 7.0p 3.9p 8 Intangible fixed assets Goodwill £000CostAt beginning and end of year 2,458 _______ AmortisationAt beginning of year 610Charged in year 122 _______ At end of year 732 _______ Net book valueAt 31 December 2006 1,726 _______ At 31 December 2005 1,848 _______ 9 Tangible fixed assets Land and Fixtures and Assets in course Total buildings fittings of construction £000 £000 £000 £000CostAt beginning of year 27,647 4,829 1,440 33,916Additions 10,368 1,666 2,165 14,199Disposals - (31) - (31)Transfers 816 203 (1,019) - ______ ______ ______ ______ At end of year 38,831 6,667 2,586 48,084 ______ ______ ______ ______ DepreciationAt beginning of year 1,455 1,240 - 2,695Charge for year 588 515 - 1,103Disposals - (31) - (31) ______ ______ ______ ______ At end of year 2,043 1,724 - 3,767 ______ ______ ______ ______ Net book valueAt 31 December 2006 36,788 4,943 2,586 44,317 ______ ______ ______ ______ At 31 December 2005 26,192 3,589 1,440 31,221 ______ ______ ______ ______ The net book value of land and buildings comprises: 2006 2005 £000 £000 Freehold 1,011 956Long leasehold 35,777 25,236 ______ ______ 36,788 26,192 ______ ______ 10 Creditors: amounts falling due within one year 2006 2005 £000 £000 Bank overdraft 541 438Vendor loan notes 1,145 -Trade creditors 768 723Other taxes and social security 218 134Other creditors 40 20Accruals and deferred income 1,521 1,021Corporation tax 1,077 367 ______ ______ 5,310 2,703 ______ ______ 11 Creditors: amounts falling due after more than one year 2006 2005 £000 £000 Bank loan 22,616 14,186Vendor loan notes - Class B - 1,205Other taxes and social security 307 372Less: unamortised finance costs (95) (83) ______ ______ 22,828 15,680 ______ ______ Analysis of debt: 2006 2005 £000 £000 Debt can be analysed as falling due:In one year or less, or on demand 1,686 438Between one and two years - -Between two and five years -In five years or more 22,616 15,391 ______ ______ 24,302 15,829 ______ ______ Amounts repayable in more than five years: 2006 2005 £000 £000 Vendor loan notes - 1,205Revolving credit facility 22,616 14,186 ______ ______ 22,616 15,391 ______ ______ The Company's debt is financed by a revolving credit facility, and an amount of£22,616,000 (2005: £14,186,000) was outstanding at year end. At 31 December2006, the Company had undrawn committed bank facilities of £948,000 (2005:£6,671,000). The commitment attracts a non-utilisation fee of 0.35% per annumof the average undrawn amount. The facility becomes due for repayment inFebruary 2012. Under the terms of the loan agreement funds remain available forthe Company to draw down until this date. The facility is secured by a fixedcharge over the heritable, freehold and leasehold property, a floating chargeand a composite guarantee by each Group Company. The vendor loan notes redemption date is 30 November 2011; however note holderscan serve written notice on the Company requiring redemption at par at any timeon or after six months following the issue of the loan note. The loan notes areguaranteed by the Bank of Scotland and bear interest at LIBOR. Subsequent to the year end the revolving credit facility was increased to£30,000,000 with a repayment date of 30 January 2012. 12 Analysis of net debt At beginning of Trading Non cash At end of year cashflow movement year £000 £000 £000 £000 Cash at bank and in hand 216 117 - 333Overdraft (438) (103) - (541) ______ ______ ______ ______ (222) 14 - (208) Revolving credit facility (14,186) (8,430) - (22,616)Vendor loan (1,205) 60 - (1,145)Unamortised finance issue costs 83 14 (2) 95 ______ ______ ______ ______ (15,308) (8,356) (2) (23,666) ______ ______ ______ ______ (15,530) (8,342) (2) (23,874) ______ ______ ______ ______ 13 Annual Report and Accounts The Annual Report and Accounts for the year ended 31 December 2006 will beposted to shareholders in March 2007. Additional copies will be available viathe Company's website, www.goalsplc.co.uk, or from the Company Secretary at theCompany's registered office Orbital House, Peel Park, East Kilbride, G74 5PR. This information is provided by RNS The company news service from the London Stock Exchange