GOAL.L Regulatory News (GOAL)

Goals Soccer Centres plc

Interim Results for the six months ended 30 June 2011

Goals Soccer Centres plc ("Goals" or the "Company") is the leading player in the fast growing 5-a-side soccer market. The Company currently operates 43 centres and has established a pipeline in excess of 40 sites to continue the rollout of its proven concept.

Key Points

Financial

·; Sales up 11% to £14.7m  (2010: £13.2m)

·; Like for like sales up 3%* (2010: down 3%)

·; EBITDA up 10% to £6.4m (2010: £5.8m)

·; Adjusted Profit Before Income Tax** up 8% to £4.1m (2010: £3.8m)

·; Profit Before Income Tax up 46% to £4.0m (2010: £2.7m)

·; Adjusted diluted Earnings Per Share** up 9% to 5.8p (2010: 5.3p)

·; Diluted Earnings Per Share up 50% to 5.7p (2010: 3.8p)

·; Ordinary dividend maintained at 0.675p per share (2010: 0.675p)

·; Net cash generated from operations up 24% to £6.6m (2010: £5.3m)

·; Net bank debt of £54.4m

\* The impact of the contested VAT on block bookings by teams to fulfil their league fixtures has resulted in like for like sales net of VAT being flat

** Adjusted profit before tax is profit before tax adjusted for the impact of the movement in fair value of the capped floating interest rate hedging arrangement of nil (2010: £1.1m) and losses in the USA of £0.1m (2010: nil). Adjusted Diluted Earnings Per Share is Diluted Earnings per Share adjusted for the net of tax impact of the movement in fair value of the capped floating interest rate hedging arrangement and start up costs in the USA.

Operational highlights

·; Number of centres increased by 30% in 18 months

- Four centres added during the current period at Sunderland, Liverpool South, Norwich and Hull

- One further centre under construction in Chester

·; A new innovative modular build concept is being trialled at Chester that is expected to

- Reduce capital expenditure to circa £1.5m per centre

- Improve returns in the business

- Allow for increased rollout in future, if appropriate

·; Two of 2011 scheduled openings deferred till 2012 to allow evaluation of new modular concept

·; Minimum of four centres to open during 2012

Current Trading

Following a satisfactory performance in the first half of 2011 which saw sales, with the exception of April, grow month on month throughout the period, we have since experienced softer than expected trading during the second half of July and through August. However, we fully expect a return to the trading levels seen in the first half of the year in part aided by our 'Get Back in the Game' marketing campaign encouraging summer-lapsed players to get back to playing in early September.

Keith Rogers, Managing Director of Goals said:

"In view of the current economic climate, we are satisfied with the performance of the business in the first half of this year. The opportunity to utilise modular build pavilions in our rollout is an important development for our business. The opportunity to maintain a strong rollout strategy while reducing costs and shortening build time and simultaneously reducing debt will significantly improve our business model going forward and ensure we stay at the forefront of innovation in this fast growing sector of the leisure industry."

5 September 2011

Enquiries:

Chairman's statement

I am pleased to report that trading for the first six months has been in line with management expectations further strengthening our premier market position. Sales increased by 11% to £14.7m (June 2010: £13.2m). This performance was encouraging during a period which followed a significant snow disruption and with the exception of April, which like many businesses was impacted by softer trading, sales grew month on month throughout the period.

Like for like sales were up 3% due to our continued focus on customer retention and maximising pitch utilisation. The impact of the contested VAT on block bookings by teams to fulfil their league fixtures has resulted in like for like sales net of VAT being flat.

Like-for-like sales in our key product areas were:

·; Core Football, (approximately 73% of total sales) increased by 4% (0% net of VAT on leagues)

·; Bar and Vending, (approximately 18% of total sales) decreased by 4%

·; Birthday Parties, (approximately 4% of total sales) decreased by 1%

·; Corporate Events & Sponsorship, (approximately 4% of total sales) declined by 16%

Like-for-like football sales, continued to grow and this reinforces our belief that our low admission price means that the business is resilient to the continuing difficult economic climate. Like-for-like bar and vending sales declined by 4% as we introduced a charge for weekend function room hire which resulted in a slight decline in sales on these functions, but an increase in profits. Like-for-like corporate eventssales declined by 16% as there had been a benefit in this area prior to the World Cup in 2010.

Since the start of 2009 we have opened 12 new centres. Due to the economic climate, these newer centres continue to experience a slower rate of initial growth than in previous years resulting in maturity in both sales and profitability taking longer to achieve.

Earnings before interest, tax, depreciation and amortisation ("EBITDA") increased by 10% to £6.4m (June 2010: £5.8m). Our UK EBITDA margin increased to 44.4% (June 2010: 43.9%) benefiting from cost savings from the implementation of our call centre and tight cost control.

Adjusted Profit before income tax increased by 7% to £4.1m (2010: £3.8m) and adjusted diluted earnings per share increased by 9% to 5.8p (2010: 5.3p).

The Company invested £7.3m in capital expenditure during the period: £6.2m related to investment in new centres; £0.3m related to construction of batting cages at our centre in Los Angeles; £0.3m related to our ongoing investment in IT systems; and the balance of £0.5m related to investment in existing centres.

Net bank debt at 30 June 2011 was £54.4m. This level of debt represents 112% of shareholders' funds and 50% of tangible fixed assets. EBITDA interest cover for the period was 7 times (30 June 2010: 8 times). The Group's current bank facilities are due to expire in February 2013 and negotiations for renewal prior to that date are making good progress.

We are evaluating a new and innovative modular build system at Chester which will allow us to reduce debt and enhance return on capital whilst offering the opportunity to accelerate our rollout of new centres when appropriate.

Operating Review

Football remains the most popular sport in the UK and the appetite for 5-a-side football continues to grow amongst all age groups and both genders. The Board believes the unique Goals concept positions the Company to capitalise on this popularity and exploit the continuing major commercial opportunity to satisfy significant potential and latent demand in the market.

We consistently create and innovate in ways that extend our leadership position. Over the past 10 years we have built a well differentiated, high-energy and exciting brand.

We believe that our ability to select excellent locations and operate successful, high quality football centres has resulted in the continuing popularity of the Goals concept with our customers. This focus on delivering an amazing product and great experience to our customers is reflected in our popularity. 

Our strategy is:

·; To continue to innovate and lead the industry;

·; To continue 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;

·; To continue to generate high returns on capital;

·; To continue to create shareholder value; and

·; To provide "The Ultimate Football Experience".

We continue to make progress in all these areas.

New Modular Concept

Goals has always been about innovation. As part of an ongoing commitment to improve customer experience whilst maximising shareholder returns, we have been investigating the opportunities offered by modular build systems over the past few years. We have always understood that a modular system which meets the quality requirements of the Goals brand could offer significant benefits.

Following a thorough investigation of modular system providers we selected a partner with whom to work on developing a prototype system. We have spent a significant amount of time and resource developing a building which we are confident will meet our key requirements and maintain the quality experience of the Goals brand.

The system will offer a number of significant benefits:

·; Cost: the new system will significantly reduce new centre costs bringing a standard Goals development down to £1.5m (traditional build: £2.2m)

·; Speed: We will be able to reduce the site development time down from 22 weeks to 14

·; Increased rollout: With 40 sites in the pipeline, the reduced cost and speed will allow the Company to increase rollout in the future if appropriate

Although confident of this new concept, we have decided to delay development of the two remaining centres for the current year to allow evaluation of the system on our current development at Chester. If as we expect, the new system meets our requirements, we will revert to opening a minimum of four centres in 2012 and thereafter.

This system will thereafter be used in all locations except for those sites where a more bespoke solution is required.

Rollout

Since the Company listed on AIM in December 2004 we have added 32 additional centres representing a 282% increase. We now have 42% of the branded 5-a-side facility market.

During the period, we opened centres in Sunderland, Liverpool South, Norwich (delayed from 2010 due to weather) and Hull.

Our site pipeline continues to strengthen as we take advantage of the opportunities provided by the current economic climate.

Digital Strategy

We continue to develop our Digital Strategy to take advantage of the opportunities offered by new media for marketing and customer interaction. Earlier in the year we appointed an experienced digital marketing consultant who has helped us develop a strategy to maximise the return from this exciting, fast moving and effective method of reaching customers.

We are well advanced on the development of our new consumer website and aim to launch it in the next few months. This will bring far greater benefits for our customers including closer integration with social media enabling teams to quickly announce their results and other information to their social media pages.

We are embracing social media on a local level too - enabling a closer and more immediate relationship between our customers and their local Goals centre. This provides an ideal avenue to promote events and promotions in a more direct and viral way.

Systems

We continue to invest in our industry leading systems. Our SmartCentre IT platform works ceaselessly to enable all levels of the business to operate as efficiently as possible. It also provides a richer experience for our customers, providing instant results and stats to the web and by email and SMS direct to our customers. Our ability to handle online bookings remains unique in the industry.

In tougher economic times, it is more important than ever to maintain our focus on quality of service and facilities. We are well advanced in the development of our EFM (Enterprise Feedback Management) system to allow automatic customer satisfaction surveys to be delivered at key trigger points in a customers' journey with Goals. The invaluable feedback this will provide will enable us to ensure we continue to provide the ultimate 5-a-side football experience.

Our call centre is now well developed at handling both inbound and outbound calls. This has proved an invaluable resource.

Los Angeles

Our centre in Los Angeles continues to reinforce its position as a focus for soccer in the greater Los Angeles area. We have recently held a number of major tournaments including a televised two day event sponsored and televised by Univision, Los Angeles' premier Hispanic television channel. The centre made a marginal loss of £0.1m in the period due to investment in marketing and establishing the Goals brand. Revenue continues to grow and we are confident of achieving a full year profit.

VAT 

The dispute with HMRC in respect of the VAT treatment of the hiring of pitches to teams who participate in Goals' leagues has not yet been resolved, but there has been some encouraging progress in the period.

Although we believe that there is a good prospect of the Company being shown to have been applying the correct VAT treatment, we have taken the prudent approach of complying with the VAT treatment which HMRC considers applies in respect of our hiring of pitches to teams who participate in Goals' leagues.

With effect from 9 February 2011, which was the date on which HMRC published their Brief setting out their revised policy, we have been accounting for VAT on the income from the hiring of pitches to teams who participate in Goals' leagues. Such an approach will ensure that we have no post 9 February 2011 exposure to a VAT liability or penalties or interest should HMRC's position prevail. We have submitted our formal appeal to the VAT Tribunal and we are currently waiting for HMRC to submit their arguments and for a hearing date to be set.

In addition, we have challenged HMRC's plans to assess the company for VAT on trading which occurred prior to them issuing their Brief on 9 February 2011.  Our case is being considered by HMRC's Complaints Team. Based on correspondence received to date and professional advice, we would expect our complaint to be upheld, thus removing any pre 9 February 2011 VAT liability. No provision for VAT has been made pre 9 February 2011.

Bank Debt and Renewal of Facilities

It is an objective of the Board to reduce the overall level of debt within the business through strong cash flow, whilst continuing to invest in the growth of 'next generation' soccer centres. The new modular system should allow the company to combine these two aims through significantly lowering the cost of the projected roll out. The additional benefit of this strategy is that the overall level of return on capital in the business will be significantly improved.

The Group's current bank facilities expire in February 2013 and negotiations for renewal prior to that date are making good progress.

Dividend

The Board intends that the Company will continue to retain the majority of distributable profits and cash flows to fund its planned rollout of new centres. An interim ordinary dividend of 0.675p per share will be paid on 4 November 2011 to shareholders on the register on 7 October 2011.

Outlook

Following a satisfactory performance in the first half of 2011 which saw sales, with the exception of April, grow month on month throughout the period, we have since experienced softer than expected trading during the second half of July and through August. However, we fully expect a return to the trading levels seen in the first half of the year in part aided by our 'Get Back in the Game' marketing campaign encouraging summer-lapsed players to get back to playing in early September.

Sir Rodney Walker

Chairman

2 September 2011

Consolidated condensed income statement

For the six months ended 30 June 2011

Consolidated condensed balance sheet

at 30 June 2011

Consolidated condensed statement of cash flows

For the six months ended 30 June 2011

Consolidated condensed statement of Comprehensive Income and Expense

for the six months ended 30 June 2011

Consolidated condensed statement of changes in equity

for the six months ended 30 June 2011

Notes to the Unaudited Interim Report

Goals Soccer Centres plc (the "Company") is a company domiciled in the United Kingdom.

1. Significant accounting policies

Basis of preparation

The condensed interim financial statement is prepared applying the recognition and measurement requirements of IFRSs as adopted by the EU. The company has elected not to prepare the interim statement in accordance with IAS 34 as adopted by the EU.

The interim statement does not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the company as at and for the year ended 31 December 2010 which were prepared in accordance with IFRS as adopted by the EU.

The preparation of the interim statement requires the directors to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The accounting policies applied by the company in this condensed interim financial statement are the same as those applied in its financial statements as at and for the year ended 31 December 2010. The comparative figures for the financial year ended 31 December 2010 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditors and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The accounting policies set out below have been applied consistently to all periods presented in this interim statement, except for the impact of the adoption of the standards described below.

The following new standards, amendments to standards and interpretations are mandatory for the first time for financial periods commencing on 1 January 2011.

Revised IAS 24 'Related party disclosures' issued in November 2009. It supersedes IAS 24 'Related party disclosures' issued in 2003.

Prepayments of a Minimum Funding Requirement (Amendments to IFRIC 14) and Improvements to IFRS 2010 including IFRS 7 Financial Instruments : Disclosures and IAS 1 Presentation of Financial Statements.

The Interim Statement was approved by the Board on 1 September 2011.

Basis of consolidation

The financial statements consolidate the financial statements of the Company and its subsidiaries. Subsidiaries are entities controlled by the Group or the Company. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity in order to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries acquired are consolidated in the financial statements of the Group from the date that control commences until the date that control ceases. All business combinations are accounted for by applying the purchase method of accounting.

Revenue

Revenue represents the value of goods and services supplied to customers (net of Value Added Tax). The Group's revenue comprises revenues from customers utilising the Group's next generation football facilities and secondary revenue associated with this utilisation. Revenue from utilisation of the football facilities includes: revenue from leagues operated by the Group; revenue from customers who use the facilities to play on a non league basis; Corporate Events; Children's Birthday Parties; and Children's Coaching.

Revenue is recognised for use of the football facilities when each game is complete. Secondary revenue includes: soft drink vending; confectionery vending; bar revenue and revenue from sales of football equipment. Revenue is recognised for secondary sales at the time the goods change hands. The Group recognises revenue in respect of goods and services received under sponsorship and partnership arrangements by reference to the fair value of goods and services received under the contract.

Taxation

The tax expense represents the sum of the current taxes payable and deferred tax. The current tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised or increased. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset to the extent that there is a legal right of offset.

Income tax in the interim period is calculated using the tax rate that would be applicable to expected total annual pre tax results.

Goodwill

Goodwill on acquisitions represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities and contingent liabilities at the date of acquisition. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is tested annually for impairment. Impairment is first allocated to goodwill and then to other assets in the cash generating units on a pro rata basis.

The value of Goodwill is reviewed at each balance sheet date to determine whether there is an indication of impairment. An impairment is recognised whenever the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of a cash generating unit is the greater of the value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the cash-generating unit.

Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition or construction of the asset. Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised during the period of construction. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

Freehold and leasehold buildings - 50 years or lease period if shorter

Fixtures and fittings:

- pitches - 7 years

- 11-a-side pitches - 10 years

- office furnishings - 10 years

- fixtures and fittings - 10 years

- computer equipment - 4 years

- computer software - 7 years

- plant and machinery - 4 years

Assets under construction are transferred to the relevant asset category when they become operational and are depreciated from that date.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-out basis. Net realisable value is the amount that can be realised from the sale of inventory in the normal course of business after allowing for the costs of realisation.

Net debt

Net debt includes cash and cash equivalents, bank borrowings and loan notes.

Trade and other receivables

Trade and other receivables are initially recognised at their fair value and then stated at amortised cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Trade and other payables

Trade and other payables are initially recognised at fair value and then stated at amortised cost.

Finance costs

Interest is recognised in income or expense using the effective interest method except that borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised during the period of construction The construction of new centres are treated as qualifying assets as they necessarily take a substantial period of time to prepare for intended use. The amount of finance costs capitalised is determined by applying the interest rate applicable to appropriate borrowings to the accumulated expenditure on those assets for that period.

Pensions

Contributions to stakeholders or other personal pension plans are expensed as incurred.

Leasing

Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease.

Derivative financial instruments

Derivative financial instruments are measured at fair value and comprise interest rate swaps. These derivative financial instruments are designated as cash flow hedges in line with the Group's treasury policy.

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge, as defined by IAS 39 "Financial Instruments: Recognition and Measurement", is recognised in equity, with any ineffective portion recognised in the income statement. When hedged cash flows result in the recognition of a non financial asset or liability, the associated gains or losses previously recognised in equity are included in the initial measurement of the asset or liability. For all other cash flow hedges, the gains or losses that are recognised in equity are transferred to the income statement in the same period in which the hedged cash flows affect the income statement.

Any gains or losses arising from changes in fair value of derivative financial instruments not designated as hedges are recognised in the income statement.

Foreign currencies

The consolidated financial statements are presented in pounds sterling, which is the functional currency of the company and the Group's presentational currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured accordingly.

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Any gain or loss arising on the restatement of such items is taken to the income statement.

For the purpose of presenting the consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into pounds sterling at the balance sheet closing rate. The results of these operations are translated at the average rate in the relevant period. Exchange differences on retranslation of the opening net assets and the results are transferred to the translation reserve and are reported in the statement of comprehensive income.

Share-based payments

The share option schemes allow employees to acquire shares of the Company. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using an option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.

Dividends on shares presented within shareholders' funds

Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent that they are appropriately authorised and are no longer at the discretion of the Company. Unpaid dividends that do not meet these criteria are disclosed in the notes to the financial statements.

Earnings per share

The company presents basic and diluted earnings per share (EPS) data for ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of shares outstanding for the effects of all dilutive potential ordinary shares which comprise share options granted to employees.

2. Segmental reporting

All turnover and operating profit is derived from the operation of outdoor soccer centres. The company operates soccer centres in both the UK and US; turnover and operating profit generated in the US is not significant to the company's results.

3. Tax

Corporation tax for the interim period is charged at 28.7% (June 2010: 31%), representing the estimated effective tax rate for the full financial year.

The Emergency Budget on 22 June 2010 announced that the UK corporation tax rate will reduce from 28% to 24% over a period of four years from 2011. The first reduction from 28% to 27% is effective from 1 April 2011 and the second reduction to 26% was substantively enacted on 29 March 2011. This will reduce the company's current tax charge accordingly. It is not yet possible to quantify the full anticipated effect of the announced further 2% rate reduction although this will further reduce the company's future current tax charge and reduce the company's deferred tax liability accordingly.

4. Dividends

The proposed interim dividend of 0.675p (2010: 0.675p) per share will be paid on 4 November 2011 to shareholders on the register at close of business on 7 October 2011. The 2011 interim dividend was approved by the Board on 2 September 2011 and has not been included as a liability as at 30 June 2011.

5. Earnings per share

Basic and diluted earnings per share

Diluted earnings per share is calculated using the profit for the financial period divided by the weighted average number of shares in issue for the period ended 30 June 2011 plus all outstanding relevant share options at that date.

Adjusted earnings per share

Adjusted earnings per share has been calculated excluding the net of tax impact of the movement in fair value of the capped floating interest rate hedge and start up costs in the USA as follows:

6. Property, plant and equipment

7. Intangible assets

8. Deferred tax liability

Deferred tax assets and liabilities are attributable to the following:

9. Other financial liabilities

10. Trade and other payables

11. Movement in net debt

Net debt is defined as cash and cash equivalents less interest bearing loans and borrowings.

12. Contingencies

Group and Company

Goals currently generates approximately 20% of sales from hiring pitches to league customers. The company currently treats league team management fees and pitch bookings as standard rated for VAT purposes. However, block bookings by teams including those by league teams to fulfil their league fixtures are treated as exempt from VAT by the Company as these fulfil all the conditions set out in Note 16, Group 1, Sch.9, VATA 1994. On 9 February 2011 HMRC issued a briefing note indicating that commercially operated sports leagues should be standard rated. We have taken professional advice which has confirmed our view that our block bookings satisfy the conditions for VAT exemption. There is a risk that the ruling may be applied retrospectively, however, based on the information currently available the Directors do not believe that a provision is required, in this regard, at 30 June 2011.

KPMG Audit Plc

191 West George Street

Glasgow

G2 2LJ

United Kingdom

Independent review report to Goals Soccer Centres plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2011 which comprises the Consolidated Condensed Income Statement, Consolidated Condensed Balance Sheet, Consolidated Condensed Statement of cash flows, Consolidated Condensed Statement of Comprehensive Income and Expense, Consolidated Condensed Statement of Changes in Equity and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

As disclosed in note 1, the annual financial statements of the company are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2011 is not prepared, in all material respects, in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU and the AIM Rules.

P Galloway

for and on behalf of KPMG Audit Plc

Chartered Accountants 2 September 2011