GOAL.L Regulatory News (GOAL)

22 Feb 2005 07:00

Goals Soccer Centres PLC22 February 2005 Goals Soccer Centres Plc Preliminary Results for the year ended 31 December 2004 Goals Soccer Centres plc ("Goals" or the "Company") is the premier operator of"next generation" 5-a-side soccer centres across the UK. Goals currentlyoperates 12 centres and has established a well-progressed pipeline of sites tocontinue its proven rollout concept. 14 more openings are planned over the nextthree years, a further five of those in 2005. Goals successfully floated on theAlternative Investment Market ("AIM") in December 2004. KEY POINTS Financial • Sales up 35% to £8.3m (2003: £6.2m) • EBITDA up 45% to £3.2m (2003: £2.2m) • EBITA up 38% to £2.4m (2003: £1.7m) • Profit on ordinary activities before tax and amortisation up 72% to £0.7m (2003: £0.4m) • Earnings Per Share up 50% to 1.92p (2003: 1.28p) • Strong financial performance driven by like-for-like sales growth of 7% and new openings Rollout • Two new centres opened - Goals Wimbledon opened May 2004 - on time and on budget. - Goals Black Country opened January 2005 - on time and on budget. • 2005 Openings - On schedule for total of five further openings in 2005 (six in total in 2005 including Goals Black Country) - Goals Teesside on schedule to open in Quarter 1 2005 - Construction work started on Goals Heathrow. - Construction work started on Goals Sheffield. - On schedule to begin construction on 2 further centres in 1st half 2005. Keith Rogers, Managing Director of Goals said: "Through 2004 our business has continued to develop and to achieve predictableresults in line with our model. There remains much opportunity and potential tocontinue to grow our portfolio of next generation soccer centres in a measuredand controlled way in order to deliver continued and growing returns forshareholders. The Company has continued to trade strongly since the start of thenew financial year" 22 February 2005 Enquiries:Goals Soccer Centres plc Today: 020 7457 2020 Thereafter: 01698 286 633Keith Rogers, Managing DirectorBill Gow, Finance Director College Hill Tel: 020 7457 2020Matthew Smallwood/Jamie Ramsay CHAIRMAN'S STATEMENT Following our recent admission to the Alternative Investment Market on 7December 2004, I am pleased to report Goals Soccer Centres' maiden results as apublic company for the year ended 31st December 2004. This has been another strong year for Goals. Sales increased by 35% to £8.3m(2003: £6.2m). EBITDA increased by 45% to £3.2m (2003: £2.2m), and EBITAincreased by 38% to £2.4m (2003: £1.7m). This resulted in a 100% increase inprofit on ordinary activities to £0.6m (2003: £0.3m) and a 50% increase inEarnings Per Share to 1.92p (2003: 1.28p) Significant progress was also made in developing our site pipeline. Playing for SuccessThe popularity of 5-a-side football has never been greater. Football is the mostpopular sport in the UK and 5-a-side football as a commercial activity has grownrapidly in recent years. The Board considers that this trend will be maintainedin the future. We believe there is a major commercial opportunity to satisfy significantpotential and latent demand through the provision of quality "next-generation"facilities in unrivalled locations.We remain confident in our business model and product, and look forward to 2005with enthusiasm. The Board expects further significant progress in 2005, in terms of tradingperformance and the opening of new centres. Our strategy is straightforward: • to continue to innovate and lead the industry, • to accelerate our UK rollout of "next-generation" soccer centres, • to maximise revenue from existing centres, • to continue to build a positive national 5-a-side football brand and to develop marketing partnerships with known brand operators, • to continue to generate high returns on capital. We made excellent progress in all of these during 2004. 5-A-Side Is Now A Whole New Ball GameGoals is the premier operator in the UK market. Our "next-generation" offeringcomprises the latest artificial pitch technology, high quality facilities andsuperior customer service. Goals currently has over 33,000 customers goingthrough our centres each week and this is expected to exceed 50,000 per week bythe end of this year During 2004, we continued to work with our partners to evolve and furtherimprove the Goals concept. This included advances in artificial grass technologysuch as monofilament turf which further enhanced the playing characteristics ofthe grass while also improving turf life; implementation of our new leaguemanagement system delivering greater management control and improvinginformation delivery to teams; we progressed our investigation of centrallyprovided streamed on-screen advertising, the benefits of which are expected thisyear. It is our intention to continually exceed customer expectations and to providethe best possible customer experience. New SigningsThe time taken from site identification to commencement of construction canexceed two years. Goals has over recent years developed a well progressedpipeline of sites. We are confident in meeting our objective of six siteopenings during 2005 and 15 new sites over the next three years. We made significant headway during the year in developing our site pipeline andcompleted work on Goals Wimbledon (opened May 2004) and Goals Black Country(opened January 2005) and commenced construction on Goals Teesside. Since theyear end, construction has commenced on Goals Heathrow and Goals Sheffield. Weremain on schedule to begin construction on two further centres in the firsthalf of 2005. During the year we completed the expansion of Goals Leeds through the additionof two courts and the expansion of other centres is being investigated. Goals in the CommunityGoals is committed to youth sports development in the communities in which itoperates. By working in partnership with local authorities, schools and sportsdevelopment agencies, we seek to improve access for children to quality sportsfacilities. Our commitment to free access for key user groups during off-peakhours is a model of public-private partnership. A Winning TeamThe Directors continue to strengthen the management team as and whenappropriate. The skill and dedication of Goals' people in serving our customersis the real driving force behind our success.I should like to thank all of them for another excellent year. Financial Review2004 has proven to be another successful year for Goals. Sales increased by 35% to £8.3m from £6.2m. This included £0.6m from theWimbledon centre which opened during the year, and traded ahead of expectations. This strong performance is based on the Company's proven roll-out concept andthe maximisation of utilisation throughout our centres. We believe that Goals iswell placed to increase revenues not only from developing its pipeline of sitesbut also from its existing portfolio of centres. Our staff are focused oncustomer retention and maximising utilisation and our systems are designed toassist the staff to achieve this. I am pleased to report that like-for-likesales increased by approximately 7% during the year. We continually seek to drive non-football revenue growth at all our centres andapproximately 30% of sales were derived from non-football income during theyear. EBITDA increased by 45% to £3.2m from £2.2m in 2003 and EBITA increased by 38%to £2.4m from £1.7m in 2003. During the year we reviewed the estimated usefuleconomic life of our pitches and reduced it to seven years. This increased thedepreciation charge by £109k for the year and will be recurring. The Company'sstrategy is to ensure that "next generation" facilities are available to ourcustomers for many years ahead. Interest costs increased from £1.4m to £1.7m. However, this includes £0.5m ofinterest paid on £7m of secured loan stock issued by Dunedin Capital Partners.Net funds of £12.3m were raised for the Company from the placing of shares whenthe Company listed on AIM and these funds were used to fully repay the securedloan stock and reduce bank debt. Interest costs are expected to decrease in thecurrent year, reflecting the reduced debt. Profit on ordinary activities before tax and amortisation increased by 72% to£0.7m (2003: £0.4m) and Earnings Per Share increased by 50% to 1.92p (2003:1.28p). Cash inflow from operating activities amounted to £3.0m. We invested £4.9m ascapital expenditure during the year, £4.3m of which relates to investment in newcentres. At 31 December 2004, approximately £2.9m had been invested in ourpipeline of sites. The majority of this relates to Goals Black Country and GoalsTeesside. Debt at 31 December 2004 was £10m (2003: £19.2m). This level of debt represents77% of shareholders' funds and 44% of tangible fixed assets. We have put inplace a new six year revolving credit facility with HBoS of £22.5m. This willfully fund our objective of 14 further centres over the next three years. Shareholder returnThe Board expects further significant progress in 2005, in terms of tradingperformance and the opening of new centres. The Board intends that the Companywill retain the majority of any distributable profits and cash flows tocontribute towards the funding of its planned roll out. However, the Directorspropose to declare a small dividend each year for the foreseeable future,commencing with a final dividend for the year ending 31 December 2005. Sir Rodney Walker Chairman 22 February 2005 The Preliminary announcement was approved by the Board of Directors on 21February 2005. Profit and loss accountfor the year ended 31 December 2004 Note 2004 2003 £000 £000 Turnover 2 8,288 6,156Cost of sales (1,175) (858) Gross profit 7,113 5,298Administrative expenses- general (4,710) (3,559)- goodwill amortisation (122) (122) Operating profit 3 2,281 1,617Other interest receivable and similar income 2 -Interest payable and similar charges 4 (1,670) (1,401)Gain on sale of land - 90 Profit on ordinary activities before taxation 613 306Tax on profit on ordinary activities 5 (200) (51) Profit on ordinary activities after taxation 413 255Dividends paid and proposed 6 (155) - Profit for the financial year 258 255 Earnings per ordinary share- Basic and diluted 7 1.92p 1.28p There are no recognised gains and losses other than those set out above. Balance sheetat 31 December 2004 Note 2004 2003 £000 £000 £000 £000Fixed assetsIntangible assets - goodwill 8 1,970 2,092Tangible assets 9 22,484 18,385 24,454 20,477Current assetsStocks 84 62Debtors 224 121Cash in hand 10 133 147 441 330Creditors: amounts falling due within one 11 (1,854) (1,141)year Net current liabilities (1,413) (811) Total assets less current liabilities 23,041 19,666 Creditors: amounts falling due after more 12 (9,834) (19,193)than one yearProvisions for liabilities and charges 14 (251) (51) Net assets 12,956 422 Capital and reservesCalled up share capital 104 10Share premium account 12,679 497Profit and loss account 173 (85) Equity shareholders' funds 12,956 422 Cash flow statementfor the year ended 31 December 2004 2004 2003 £000 £000 £000 £000 Cash inflow from operating activities 3,023 2,246Returns on investments and servicing of financeInterest paid (1,790) (1,223)Interest received 2 - Net cash outflow for returns on investments and (1,788) (1,223)servicing of finance Taxation - - Capital expenditurePayments to acquire property, plant and (4,384) (5,173)equipment Net cash outflow for capital expenditure and (4,384) (5,173)financial investment Cash outflow before financing (3,149) (4,150) Equity dividends paid (155) - FinancingIssue of share capital 13,250 -Expenses paid in connection with share issue (799) -Bank loans received 10,505 4,550Bank loans repaid (12,250) -Loan notes and vendor loans redeemed (7,600) (343) Net cash inflow from financing 3,106 4,207 (Decrease)/increase in cash in the period (198) 57 Reconciliation of net cash flow to movement in net debt Note 2004 2003 £000 £000 (Decrease)/increase in cash in the period (198) 57Cash inflow from bank finance (10,505) (4,550)Bank loans repaid 12,250 -Loan notes and vendor loans redeemed 7,600 343 Change in net debt resulting from cash flows 9,147 (4,150)Non cash movement - amortisation of finance costs 5 (48) Movement in net debt in the year 9,152 (4,198) Net debt at the start of the year (19,156) (14,958) Net debt at the end of the year 10 (10,004) (19,156) Notes to the preliminary results for the year ended 31 December 2004 1. Basis of preparation The financial information set out herein relating to the Company for the yearended 31 December 2004 and the year ended 31 December 2003 does not constitutestatutory accounts within the meaning of section 240 of the Companies Act 1985.Statutory accounts for the year ended 31 December 2003 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: 2004 2003 £000 £000 Auditors' remuneration:- audit 10 8- taxation services 2 2- further assurance services 87 -Depreciation written off tangible fixed assets 815 481Rental under operating leases- plant and machinery 4 -- others 387 358 During 2004, all amounts payable in respect of further assurance services werecharged to the share premium account. b) Reconciliation of operating profit to net cash inflow from operatingactivities: 2004 2003 £000 £000 Operating profit 2,281 1,617Depreciation 815 481Amortisation of goodwill 122 122Increase in stock (22) (23)Increase in debtors (70) (102)(Decrease)/increase in creditors (103) 151 Net cash inflow from operating activities 3,023 2,246 4. Interest payable and similar charges 2004 2003 £000 £000 On bank loans and overdrafts 916 712On all other loans 659 641Amortisation of finance costs 95 48 1,670 1,401 5. Taxation 2004 2003 £000 £000Current taxUK corporation tax on profits for the year - - Deferred tax (note 14)Origination of timing differences 204 99Adjustment in respect of prior periods (4) (48) Total deferred tax 200 51 Tax on profit on ordinary activities 200 51 Factors affecting the tax charge for the current yearThe current tax charge for the year is nil (2003: nil). This is below the SmallCompanies rate of corporation tax in the UK (19%, 2003: 19%). The differencesare explained below: 2004 2003 £000 £000Current tax reconciliationProfit on ordinary activities before tax 613 306 Current tax at 19% (2003: 19%) 116 58 Effects of:Expenses not deductible for tax purposes 22 21Depreciation on assets not qualifying for capital allowances 66 37Deferred tax charge (204) (99)Gain on sale of land not chargeable to corporation tax - (17) Total current tax charge - - 6. Dividends 2004 2003 £000 £000 Dividends paid 155 - The dividends during 2004 were paid to the holders of the ordinary "A" shares inaccordance with the previous Memorandum and Articles of Association. 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. The share options disclosed in theremuneration report are contingent upon the growth of future earnings. Under FRS14, these share options are treated as contingently issuable shares for thepurposes of determining diluted earnings per share. Weighted 2004 Weighted 2003 Profit for the average earnings Profit for the average earnings financial year number of per share financial year number of per share shares p £000 shares p £000 Number Number Basic 413 21,497,945 1.92 255 20,000,000 1.28and dilutedearningsper share 8. Intangible fixed assets Goodwill £000CostAt beginning and end of year 2,458 AmortisationAt beginning of year 366Charged in year 122 At end of year 488 Net book valueAt 31 December 2004 1,970 At 31 December 2003 2,092 9. Tangible fixed assets Assets Land and Fixtures in course of buildings and fittings construction Total £000 £000 £000 £000 CostAt beginning of year 16,569 2,280 642 19,491Additions 1,420 805 2,689 4,914Disposals - (129) - (129)Transfers 409 - (409) - At end of year 18,398 2,956 2,922 24,276 DepreciationAt beginning of year 703 403 - 1,106Charge for year 341 474 - 815Disposals - (129) - (129) At end of year 1,044 748 - 1,792 Net book valueAt 31 December 2004 17,354 2,208 2,922 22,484 At 31 December 2003 15,866 1,877 642 18,385 10. Analysis of net debt At beginning Trading Refinancing Non cash At end of of year cashflow cash flow movement year £000 £000 £000 £000 £000 Cash at bank and in hand 147 (14) - - 133Overdraft (223) (184) - - (407) (76) (198) - - (274) Bank loans (9,775) (2,475) 12,250 - -Revolving credit facility - - (8,030) - (8,030)Vendor loan (2,425) - 625 - (1,800)Loan stock (6,975) - 6,975 - -Unamortised finance issue 95 - 50 (45) 100costs (19,156) (2,673) 11,870 (45) (10,004) 11. Creditors: amounts falling due within one year 2004 2003 £000 £000 Bank overdraft 407 223Trade creditors 879 157Other taxes and social security 73 147Other creditors 3 1Accruals and deferred income 492 613 1,854 1,141 12. Creditors: amounts falling due after more than one year 2004 2003 £000 £000 Bank loan 8,030 9,775Vendor loan notes - Class B 1,800 2,425Secured loan stock - 6,975Other taxes and social security 104 113Less: unamortised finance costs (100) (95) 9,834 19,193 13. Reconciliation of weighted average number of shares 2004 2003 £000 £000 Opening number of ordinary shares 975,000 975,000Bonus issue 4,025,000 4,025,000Redenomination of ordinary shares from 1p to 0.25p 15,000,000 15,000,000 Unchanged capital from 2003 to 2004 20,000,000 20,000,000Impact of shares issued (average age of these shares: 25 1,497,943 -days) Weighted average number of shares 21,497,943 20,000,000 14. Provisions for liabilities and charges 2004 2003Deferred tax £000 £000 At beginning of year 51 -Charged to the profit and loss account 200 51 At end of year 251 51 The elements of deferred taxation are as follows: 2004 2003 £000 £000 Difference between accumulated depreciation and capital allowances 362 251Tax losses (101) (200)Other timing differences (10) - Deferred tax liability 251 51 15. Annual Report and Accounts The Annual report and accounts for the year ended 31 December 2004 will beposted to Shareholders in March 2005. Additional copies will be available viathe Company's website, www.goalsplc.co.uk, or from the Company Secretary at theCompany's registered office 29 Bothwell Road, Hamilton ML3 0AY. This information is provided by RNS The company news service from the London Stock Exchange