GOAL.L Regulatory News (GOAL)

18 Sep 2006 07:01

Goals Soccer Centres PLC18 September 2006 Goals Soccer Centres plc Interim Results for the 6 months ended 30 June 2006 Goals nets 72% 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 operates21 centres and has an established and well progressed pipeline of sites tocontinue the rollout of its proven concept. Financial • Sales up 35% to £7.5m (2005: £5.5m) • EBITDA* up 56% to £3.3m (2005: £2.1m) • EBITA* up 59% to £2.7m (2005: £1.7m) • Profit before tax up 72% to £2.1m (2005: £1.2m) • Basic Earnings per share up 70% to 3.2p (2005: 1.9p) • Strong financial performance driven by like for like sales growth of 5% and new openings • Maiden interim ordinary dividend of 0.3p per share * The company has adopted FRS 20 - share based payments in the period and as aresult the profit and loss accounts for the comparative periods have beenrestated to reflect this. The result of this is a reduction in profit for the 6month period ended 30 June 2006 of £92,000 (June 2005: £81,000) and a reductionin profit for the year ended 31 December 2005 of £162,000. Rollout • Five centres added at Sutton, Southampton, Birmingham Central, Plymouth and Bradford during the current year • Birmingham West under construction and due to open in late 2006 • On schedule to open a minimum of five centres in 2007 Keith Rogers, Managing Director of Goals said: "I am delighted to report another set of strong results further demonstratingthe demand in the market for Goals' 'next generation' concept. Since ourflotation in December 2004, we have opened 10 new centres and now have 21centres across the UK. Our site pipeline continues to strengthen. The Company continues to trade strongly in the second half of the financial year." 18 September 2006 Enquiries: Goals Soccer Centres plc Keith Rogers, Managing Director Today: 020 7457 2020Bill Gow, Finance Director Thereafter: 01355 234 800 College HillMatthew Smallwood Tel: 020 7457 2020Jamie Ramsay KBC Peel HuntMatt Goode Tel: 020 7418 8900 Chairman's statement I am pleased to report Goals Soccer Centres' results for the six months ended 30June 2006. This has been another strong period for Goals. Sales increased by 35% to £7.5m(2005: £5.5m). We believe that Goals is well placed to increase revenues not only fromdeveloping its pipeline of new sites but also from its existing portfolio ofcentres. Our staff and systems are focused on maximising utilisation and I ampleased to report that like-for-like sales increased by approximately 5% duringthe period. EBITDA increased by 56% to £3.3m (2005: £2.1m) and EBITA increased by 59% to£2.7m (2005: £1.7m). Economies of scale and tight cost control have resulted ina further increase in the EBITA margin to 36% (2005: 31%). The company has adopted FRS 20 - share based payments in the period and as aresult the profit and loss accounts for the comparative periods have beenrestated to reflect this. The result is a reduction in profit for the 6 monthperiod ended 30 June 2006 of £92,000 (June 2005: £81,000) and a reduction inprofit for the year ended 31 December 2005 of £162,000. International FinancialReporting Standards will be adopted from 1 January 2007. Cash inflow from operating activities increased by 53% to £3.6m (June 2005:£2.4m). We invested £8.1m in capital expenditure during the period, £7.7m ofwhich relates to investment in new centres. This has resulted in an increase ininterest costs from £0.4m to £0.6m. Profit on ordinary activities increased by 72% to £2.1m (2005: £1.2m) andearnings per share have increased by 70% to 3.2p (2005: 1.9p). Net debt at 30 June 2006 was £20.8m. This level of debt represents 130% ofshareholders' funds and 55% of tangible fixed assets. EBITDA interest cover forthe period was 5.8 times (30 June 2005: 4.9 times). Operational Review Football is the most popular sport in the UK and 5-a-side football as acommercial activity continues to grow rapidly amongst all age groups. The Boardconsiders that this trend will be maintained in the future and that the uniqueGoals concept puts the Company in a strong position to continue to capitalise onthe sector's popularity. Goals is the premier operator in the UK market and has acquired an enviablereputation through its "next generation" concept - a commitment to primelocations, quality facilities and excellent customer service. It is our aim tocontinually exceed customer expectations and to provide the best possiblecustomer experience. Goals Soccer Centres record is the result of a focused and straightforwardstrategy: • 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 complimentary brands, • To continue to generate high returns on capital We continue to make excellent progress in all these areas. Since the start of the year we have added an additional five centres at Sutton,Southampton, Birmingham Central, Plymouth and Bradford. We have opened 10 newcentres since the Company listed on AIM in December 2004 bringing the currenttotal operating to 21. A further centre will open at Birmingham West in late2006. Our strict site selection criteria have resulted in strong trading fromour new openings. 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. 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. The delivery of a quality service and experience to our customers is down to theprofessionalism and dedication of our staff. Our future staff requirements areprovided through ongoing training and promotion from within. I would again liketo thank all Goals staff for their major part in the ongoing success of Goals. Dividend 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. A maiden interim ordinary dividend of 0.3p pershare will be paid on 27 October 2006 to shareholders on the register on 29September 2006. The Board intends the Company to pay dividends each year growingat least as fast as earnings. Outlook The Company has continued to trade strongly since the period end. We believe inour business model and product, and look forward to the remainder of 2006 andbeyond with confidence and enthusiasm. The interim report for the six months ended 30 June 2006 was approved by thedirectors on 15 September 2006. The interim report is unaudited but has beenreviewed by the auditors, KPMG Audit Plc. Sir Rodney Walker Chairman 18 September 2006 Unaudited Profit and loss accountfor the six months ended 30 June 2006 Note 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2006 2005 as restated 2005 as restated (unaudited) (unaudited) (audited) £000 £000 £000 Turnover 7,452 5,503 11,166Cost of sales (976) (741) (1,506) Gross profit 6,476 4,762 9,660 Administrative expenses - general (3,791) (3,078) (6,023)- goodwill amortisation (61) (61) (122) Operating profit 2,624 1,623 3,515 Interest payable and similarcharges (571) (431) (886) Profit on ordinary activitiesbefore taxation 2,053 1,192 2,629 Tax on profit on ordinary (705) (400) (1,007)activities Profit for the financial period 1,348 792 1,622 Earnings per ordinary share (as restated) - Basic 3.2p 1.9p 3.9p Unaudited Balance sheetat 30 June 2006 Note 30 June 2006 30 June 2005 31 December 2005 (unaudited) (unaudited) (audited) £000 £000 £000 Fixed assets Intangible assets - goodwill 1,787 1,908 1,848Tangible assets 37,986 26,442 31,221 39,773 28,350 33,069Current assetsStocks 157 102 121Debtors 497 240 608Cash in hand 438 334 216 1,092 676 945Creditors: amounts falling due 4within one year (3,300) (2,470) (2,703) Net current liabilities (2,208) (1,794) (1,758) Total assets less current liabilities 37,565 26,556 31,311 Creditors: amounts falling due aftermore than one year (20,704) (12,476) (15,680) Provisions for liabilities andcharges (891) (251) (891) Net assets 15,970 13,829 14,740 Capital and reservesCalled up share capital 104 104 104Share premium account 12,679 12,679 12,679Profit and loss account 3,187 1,046 1,957 Equity shareholders' funds 15,970 13,829 14,740 Unaudited Cash flow statementfor the six months ended 30 June 2006 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 December 2005 Note (unaudited) (unaudited) (audited) £000 £000 £000 £000 £000 £000 Cash inflow from operating activities 5 3,628 2,364 4,833 Returns on investments and servicingof finance Interest paid (569) (405) (832) Net cash outflow for returns oninvestments and servicing of finance (569) (405) (832) Taxation paid - - - Capital expenditure Payments to acquire property, plantand equipment (8,130) (4,045) (9,334) Net cash outflow for capitalexpenditure and financial investment (8,130) (4,045) (9,334) Cash outflow before financing (5,071) (2,086) (5,333) Equity dividends paid (210) - - Financing Expenses paid in connection with share issue - (176) (176) Bank loans received 5,030 3,055 6,156 Loan notes and vendor loans redeemed - (475) (595) Net cash inflow from financing 5,030 2,404 5,385 (Decrease)/increase in cash in theperiod (251) 318 52 Reconciliation of movements in shareholders' fundsfor the six months ended 30 June 2006 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 as 31 December 2005 restated as restated (unaudited) (unaudited) (audited) £000 £000 £000 Profit for the financial period 1,348 792 1,622 Dividends (210) - - Net additions to shareholders' funds 1,138 792 1,622 FRS 20 - share based payments 92 81 162 1,230 873 1,784Opening shareholders' funds 14,740 12,956 12,956 Closing shareholders' funds 15,970 13,829 14,740 Notes to the interim report 1 Basis of preparation The accounting policies applied to the unaudited interim results are consistentwith the accounting policies applied in the most recent set of financialstatements for the year ended 31 December 2005 except that the company hasadopted, for the first time, FRS 20 - share based payments in preparing theseresults and as a result the profit and loss accounts for the comparative periodshave been restated to reflect this These interim results are unaudited and donot comprise full accounts within the meaning of section 240 of the CompaniesAct 1985. The figures for the financial year ended 31 December 2005 are not the company'sstatutory accounts for that financial year. The statutory accounts for the yearended 31 December 2005, which were prepared in accordance with UK GenerallyAccepted Accounting Practice have been reported on by the Company's auditors anddelivered to the Registrar of Companies. The report of the auditors was (i)unqualified, (ii) did not include references to any matters to which theauditors drew attention by way of emphasis without qualifying their report and(iii) did not contain statements under section 237(2) or (3) of the CompaniesAct 1985. 2 Taxation The taxation charge has been included at the effective rate likely to be appliedfor the year ended 31 December 2006. 3 Change in accounting policy - share based payments The company has adopted FRS 20 - share based payments in the period and as aresult the profit and loss accounts for the comparative periods have beenrestated to reflect this. The result of this is a reduction in profit for the 6month period ended 30 June 2006 of £92,000 (June 2005: £81,000) and a reductionin profit for the year ended 31 December 2005 of £162,000. 4 Creditors amounts falling due within one year 30 June 2006 30 June 2005 31 December 2005 (unaudited) (unaudited) (audited) £000 £000 £000 Bank overdraft 911 290 438Trade creditors 563 752 723Corporation Tax 1,072 400 367Other creditors including taxation and social 143 95 154securityAccruals and deferred income 611 933 1,021 3,300 2,470 2,703 5 Net cash inflow from operating activities 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 as 31 December 2005 as restated restated (unaudited) (unaudited) (audited) £000 £000 £000 Operating profit 2,624 1,623 3,515Depreciation 609 432 902Amortisation of goodwill 61 61 122Share based payments 92 81 162Increase in stock (36) (18) (37)Decrease/(increase) in debtors 111 (16) (81)Increase in creditors 167 201 250 Net cash inflow from operating activities 3,628 2,364 4,833 6 Reconciliation of net cash flow to movement in net debt 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 December 2005 (unaudited) (unaudited) (audited) £000 £000 £000 (Decrease) / Increase in cash in the period (251) 318 52Cash inflow from bank finance (5,030) (3,055) (6,156)Loan notes and vendor loans redeemed - 475 595 Change in net debt resulting from cash flows (5,281) (2,262) (5,509)Non cash movement - amortisation of finance costs 5 (8) (17) Movement in net debt in the year (5,276) (2,270) (5,526)Net debt at the start of the year (15,530) (10,004) (10,004) Net debt at the end of the year (20,806) (12,274) (15,530) 7 Movement in net debt At beginning Trading Non cash At end of of period cashflow movement period £000 £000 £000 £000 Cash at bank and in hand 216 222 - 438Overdraft (438) (473) - (911) (222) (251) - (473) Revolving credit facility (14,186) (5,030) - (19,216)Vendor loan (1,205) - - (1,205)Unamortised finance issue costs 83 - 5 88 (15,530) (5,281) 5 (20,806) 8 Earnings per share 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 December 2005 (unaudited) (unaudited) (audited) as restated as restated Profit for the financial period (£'000) 1,348 792 1,622Weighted average number of shares 41,883,788 41,883,788 41,883,788Dilutive share options 1,536,407 - - _________ _________ _________ 43,420,195 41,883,788 41,883,788 Basic earnings per share (as restated) 3.2p 1.9p 3.9pDiluted earnings per share (as restated) 3.1p 1.9p 3.9p 9 Interim report A copy of the interim report will be posted to shareholders in October 2006.Additional copies will be available via the Company's website,www.goalsplc.co.uk, or from the Company Secretary at the Company's registeredoffice Orbital House, Peel Park, East Kilbride, G74 5PR. 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