GOAL.L Regulatory News (GOAL)

6 Mar 2006 07:13

Goals Soccer Centres PLC06 March 2006 Goals Soccer Centres plc Preliminary Results for the year ended 31 December 2005 Goals nets 355% 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 18centres and has established a well progressed pipeline of sites to continue itsproven rollout concept. Key Points Financial • Sales up 35% to £11.2m (2004: £8.3m) • EBITA up 58% to £3.8m (2004: £2.4m) • Profit before tax and amortisation up 296% to £2.9m (2004: £0.7m) • Profit before tax up 355% to £2.8m (2004: £0.6m) • Earnings per share (before amortisation) up 83% to 4.6p (2004: 2.5p)* • Earnings per share up 122% to 4.3p (2004: 1.9p)* • Strong financial performance driven by like for like sales growth of 9% and new openings • Maiden final ordinary dividend proposed in respect of the current year of 0.5p per share Rollout • Seven centres added since flotation in December 2004 • On schedule to open a further four centres during 2006 of which three are already under construction • On schedule to open a minimum of five centres 2007 Brand Partnerships In line with Goals strategy of working with brands enjoying a strong associationwith football, the following partnerships are announced: • an innovative brand partnership with UMBRO who are an FA Sponsor and 'FA Partner of Small Sided Football'. • a sponsorship agreement with Powerade, 'The Official Sports Drink' ofThe World Cup, The European Championships and The Football League. * The tax charge for the year is an effective rate of 36.1% (2004: 32.6%). Thecharge includes £118,000 (0.28p per share) being the one off impact of amendingthe rate at which deferred tax is provided from 19% to 30%. Keith Rogers, Managing Director of Goals said: "I am delighted to report profits up 355%. This is an outstanding performance,demonstrating the demand in the market for our 'next generation' concept. Wehave added seven new sites since flotation and our site pipeline is strong. TheCompany has continued to trade strongly since the year end." 6 March 2006 Enquiries:Goals Soccer Centres plc Today: 020 7457 2020 Thereafter: 01355 234 800Keith Rogers, Managing DirectorBill Gow, Finance Director College Hill Tel: 020 7457 2020 Matthew SmallwoodJamie Ramsay Chairman's statement I am pleased to report Goals Soccer Centres' results for the year ended 31stDecember 2005. This has been another excellent year as Goals continues to deliver strongfinancial performance. Sales increased by 35% to £11.2m (2004: £8.3m). EBITDAincreased by 46% to £4.7m (2004: £3.2m), and EBITA increased by 58% to £3.8m(2004: £2.4m). This resulted in a 296% increase in profit on ordinary activitiesbefore tax and amortisation to £2.9m (2004: £0.7m), a 355% increase in profitbefore tax to £2.8m (2004: £0.6m), an 83% increase in earnings per share (beforeamortisation) to 4.6p (2004: 2.5p) and a 122% increase in earnings per share to4.3p (2004: 1.9p). Strong financial performance driven by like for like sales growth of 9% isfurther evidence of the Company's proven "next generation" concept and the highlevel of pitch utilisation achieved. Our focus on prime locations, qualityfacilities and outstanding customer service has led to strongly increasedrevenues from existing centres and new openings. 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 has grownrapidly in recent years. This has been acknowledged by the Football Associationin their formal recognition of the small sided game. The Board believes theunique Goals concept puts the Company in a strong position to capitalise on thispopularity and exploit the continuing major commercial opportunity to satisfysignificant potential and latent demand in the market. The Board recognises the long term potential of the small sided football marketand considers a strategy of developing quality facilities in prime locationstogether with excellent service will continue to underpin Goals premier marketposition over the long term. 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 the quality standards.Goals welcomes this initiative and is applying for the Award for all its centresin England. I am delighted to announce that we have entered into a brand partnership withUMBRO, a globally recognised football brand with a strong heritage derived frommore than 70 years' association with the sport of football. UMBRO have recentlybeen appointed the FA Partner of Small sided football. Our partnership withUMBRO will lead to many benefits for both companies and is in line with Goalsstrategy of working with brands enjoying a strong association with football. Inaddition to this we have entered into a sponsorship agreement with Powerade, 'The Official Sports Drink' of The World Cup, The European Championships and TheFootball League. 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 2005, we continued to evolve and improve theGoals concept. This included further advances in artificial grass technology,the launch of a new interactive website and the provision of themed Kids PartyZones. We continue to invest in our advanced management and communicationsystems to improve customer experience and increase income. We intend during thecourse of 2006 to implement new online team management facilities and onlinebooking. 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. This is an exciting year for football with the 2006 World Cup being held inGermany this summer. Goals will work with its partners including UMBRO andPowerade to ensure that the anticipated high level of interest in the game willbenefit our business over the medium to long term. New signings 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 and commitment to quality facilities has enabled us to pursuesites through partnership arrangements with the private sector, schools, localauthorities and colleges. Goals Sheffield, our most recent school partnershipwas formally opened by Richard Caborn MP, Minister of Sport. Since the Company listed on AIM in December 2004 we have opened Goals BlackCountry, Goals Teesside, Goals Heathrow, Goals Sheffield, Goals Beckenham andGoals Sutton. We have also acquired a centre in Southampton and this iscurrently being refurbished to reflect the Goals "next generation" concept. Thecentre is currently trading and refurbishment works will be complete by April2006. Construction has also commenced on new centres in the West Midlands, Bradfordand Plymouth and construction on one further centre is expected to commenceprior to June 2006. Our site pipeline continues to strengthen and we areconfident we will open a minimum of five centres during 2007. Goals in the community Goals commitment to youth sports development in the communities in which itoperates is evidenced by its Community Access Policy which provides free accessto key user groups during off-peak hours. By working in partnership withschools, local authorities and government bodies we have improved access forchildren to quality sports facilities. 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 and dedication of our staff. Our futurestaff requirements are provided through ongoing training and promotion fromwithin. I should like to thank all Goals staff for their major part indelivering another year of operational and financial success. Financial review This has been an excellent year as the Goals concept continues to deliver strongfinancial performance. Sales increased by 35% to £11.2m (2004: £8.3m). This included a contribution of£1.35m 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 pipe line 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. EBITDA increased by 46% to £4.7m (2004: £3.2m), and EBITA increased by 58% to£3.8m (2004: £2.4m). The gross profit margin increased to 87% (2004: 86%), theEBITDA profit margin increased to 42% (2004: 39%) and the EBITA profit marginincreased to 34% (2004: 29%). The improvement in margins reflects the ongoingincrease in utilisation across the centres and tight cost control. This resulted in a 296% increase in profit on ordinary activities before tax andamortisation to £2.9m (2004: £0.7m) Interest costs reduced from £1.7m to £0.9m due to the funds raised from theplacing of shares when the Company listed on AIM in December 2004. The tax charge for the year is an effective rate of 36.1% (2004: 32.6%). Thecharge includes £118,000 (0.28p per share) being the one off impact of amendingthe rate at which deferred tax is provided from 19% to 30%. This resulted in an 83% increase in earnings per share (before amortisation) to4.6p (2004: 2.5p) and a 122% increase in earnings per share to 4.3p (2004:1.9p). Cash inflow from operating activities increased by 60% to £4.8m (2004: £3m).£9.8m was invested as capital expenditure during the year, £8.6m of whichrelated to investment in new centres. At 31 December 2005 approximately £1.4mhad been invested in sites which are planned to open during 2006. Debt at 31 December 2005 was £15.5m (2004: £10.0m). This level of debtrepresents 107% of shareholders' funds and 50% of tangible fixed assets. We haveput in place a new £25m six year revolving credit facility with HBoS. This willfully fund our objective of 14 further centres over the next three years andprovide a contingency for further centre openings. Dividends 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 maidenfinal ordinary dividend in respect of the current year of 0.5p per share and inthe future propose to pay dividends each year growing at least as fast asearnings. Subject to approval at the Annual General Meeting to be held on 20 April 2006,the final dividend of 0.5p per share will be paid on 28 April 2006 toshareholders on the register on 31 March 2006. 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 2006 and beyondwith enthusiasm in terms of trading performance and new centre openings. Sir Rodney Walker 6 March 2005Chairman The Preliminary announcement was approved by the Board of Directors on 5 March2006. Profit and loss accountfor the year ended 31 December 2005 Note 2005 2004 £000 £000 Turnover 2 11,166 8,288Cost of sales (1,506) (1,175) Gross profit 9,660 7,113Administrative expenses- general (5,861) (4,710)- goodwill amortisation (122) (122) Operating profit 3 3,677 2,281Other interest receivable and similar income 2 2Interest payable and similar charges 4 (888) (1,670) Profit on ordinary activities before taxation 2,791 613Tax on profit on ordinary activities 5 (1,007) (200) Profit on ordinary activities after taxation 1,784 413Dividends paid 6 - (155) Profit for the financial year 1,784 258 Earnings per ordinary share- Basic and diluted 7 4.26p 1.92p There are no recognised gains and losses other than those set out above. Balance sheet at 31 December 2005 Note 2005 2005 2004 2004 £000 £000 £000 £000Fixed assetsIntangible assets - goodwill 8 1,848 1,970Tangible assets 9 31,221 22,484 33,069 24,454Current assetsStocks 121 84Debtors 608 224Cash in hand 216 133 945 441Creditors: amounts falling due within one year 11 (2,703) (1,854) Net current liabilities (1,758) (1,413) Total assets less current liabilities 31,311 23,041 Creditors: amounts falling due after more than one year 12 (15,680) (9,834)Provisions for liabilities and charges 14 (891) (251) Net assets 14,740 12,956 Capital and reservesCalled up share capital 104 104Share premium account 12,679 12,679Profit and loss account 1,957 173 Equity shareholders' funds 14,740 12,956 Cash flow statementfor the year ended 31 December 2005 Note 2005 2005 2004 2004 £000 £000 £000 £000 Cash inflow from operating activities 4,833 3,023Returns on investments and servicing of finance Interest paid (832) (1,790) Interest received - 2 Net cash outflow for returns on investments and servicing of finance (832) (1,788) Taxation - - Capital expenditure Payments to acquire property, plant and (9,334) (4,384) equipment Net cash outflow for capital expenditure and financial investment (9,334) (4,384) Cash outflow before financing (5,333) (3,149) Equity dividends paid - (155) Financing Issue of share capital - 13,250 Expenses paid in connection with share issue (176) (799) Bank loans received 6,156 10,505 Bank loans repaid - (12,250) Loan notes and vendor loans redeemed (595) (7,600) Net cash inflow from financing 5,385 3,106 Increase / (decrease) in cash in the period 52 (198) Reconciliation of net cash flow to movement in net debt 2005 2004 £000 £000 Increase / (decrease) in cash in the period 52 (198)Cash inflow from bank finance (6,156) (10,505)Bank loans repaid - 12,250Loan notes and vendor loans redeemed 595 7,600 Change in net debt resulting from cash flows (5,509) 9,147Non cash movement - amortisation of finance (17) 5costs Movement in net debt in the year (5,526) 9,152Net debt at the start of the year (10,004) (19,156) Net debt at the end of the year 10 (15,530) (10,004) Notes 1 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 2005 and the year ended 31 December 2004 does not constitutestatutory accounts within the meaning of section 240 of the Companies Act 1985.Statutory accounts for the year ended 31 December 2004 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: 2005 2004 £000 £000Operating profit is stated after charging: Auditors' remuneration: - audit 23 10 - taxation services 3 2 - further assurance services - 87Depreciation written off tangible fixed assets 903 815Rental under operating leases - plant and machinery 19 4 - others 403 387 During 2004, all amounts payable in respect of further assurance services werecharged to the share premium account. b) reconciliation of operating profit to cash flow from operating activities 2005 2004 £000 £000 Operating profit 3,677 2,281Depreciation 902 815Amortisation of goodwill 122 122Increase in stock (37) (22)Increase in debtors (81) (70)Increase/(decrease) in creditors 250 (103) Net cash inflow from operating activities 4,833 3,023 4 Interest payable and similar charges 2005 2004 £000 £000 On bank loans and overdrafts 748 916On all other loans 123 659Amortisation of finance costs 17 95 888 1,670 5 Taxation 2005 2004 £000 £000Current taxUK corporation tax on profits for the year 367 - Deferred tax (note 14)Originating timing differences 522 204Adjustment in respect of prior periods - (4)Increase due to change of rates 19% to 30% 118 - Total deferred tax 640 200 Tax on profit on ordinary activities 1,007 200 Factors affecting the tax charge for the current year The current tax charge for the year is £367,000 (2004: nil). This is below thestandard rate of corporation tax in the UK (30%, 2004: small companies rate of19%). The differences are explained below: 2005 2004 £000 £000Current tax reconciliationProfit on ordinary activities before 2,791 613tax Current tax at 30% (2004: 19%) 837 116 Effects of:Expenses not deductible for tax 29 22purposesDepreciation on assets not qualifying for capital 30 66allowancesDeferred tax charge (522) (204)Marginal relief (7) - Total current tax charge 367 - 6 Dividends 2005 2004 £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. UnderFRS 22: Earnings per Share, these share options are treated as contingentlyissuable shares for the purposes of determining diluted earnings per share. 2005 Weighted 2005 2004 Weighted 2004 Profit for average earnings per Profit for average earnings per the the financial number of share financial number of share year year shares p £000 shares p £000 Number Number Basic and dilutedearnings per share 1,784 41,883,788 4.26 413 21,497,945 1.92 8 Intangible fixed assets Goodwill £000CostAt beginning and end of year 2,458 AmortisationAt beginning of year 488Charged in year 122 At end of year 610 Net book valueAt 31 December 2005 1,848 At 31 December 2004 1,970 9 Tangible fixed assets Assets Land and Fixtures in course of buildings and fittings construction Total £000 £000 £000 £000Cost At beginning of year 18,398 2,956 2,922 24,276 Additions 6,905 1,590 1,294 9,789 Disposals - - (149) (149) Transfers 2,344 283 (2,627) - At end of year 27,647 4,829 1,440 33,916 Depreciation At beginning of year 1,044 748 - 1,792 Charge for year 411 492 - 903 Disposals - - - - At end of year 1,455 1,240 - 2,695 Net book value At 31 December 2005 26,192 3,589 1,440 31,221 At 31 December 2004 17,354 2,208 2,922 22,484 10 Analysis of net debt At beginning Trading Non cash At end of of year cashflow movement year £000 £000 £000 £000 Cash at bank and in hand 133 83 - 216Overdraft (407) (31) - (438) (274) 52 - (222) Revolving credit facility (8,030) (6,156) - (14,186)Vendor loan (1,800) 595 - (1,205)Unamortised finance issue costs 100 - (17) 83 ' (10,004) (5,509) (17) (15,530) 11 Creditors: amounts falling due within one year 2005 2004 £000 £000 Bank overdraft 438 407Trade creditors 723 879Other taxes and social security 134 73Other creditors 20 3Accruals and deferred income 1,021 492Corporation tax 367 - 2,703 1,854 12 Creditors: amounts falling due after more than one year 2005 2004 £000 £000 Bank loan 14,186 8,030Vendor loan notes - Class B 1,205 1,800Other taxes and social security 372 104Less: unamortised finance costs (83) (100) 15,680 9,834 13 Reconciliation of weighted average number of shares 2005 2004 £000 £000 Opening number of ordinary shares 41,883,788 975,000Bonus issue - 4,025,000Redenomination of ordinary shares from 1p to 0.25p - 15,000,000 Unchanged capital from 2004 to 2005 41,883,788 20,000,000Impact of shares issued (average age of these shares 2004: 25 days) - 1,497,943 Weighted average number of shares 41,883,788 21,497,943 14 Provisions for liabilities and charges 2005 2004Deferred tax £000 £000 At beginning of year 251 51Charged to the profit and loss account 640 200 At end of year 891 251 The elements of deferred taxation are as follows: 2005 2004 £000 £000 Difference between accumulated depreciation and capital allowances 891 362Tax losses - (101)Other timing differences - (10) Deferred tax liability 891 251 15 Annual Report and Accounts The Annual Report and Accounts for the year ended 31 December 2005 will beposted to shareholders in March 2006. 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