GOAL.L Regulatory News (GOAL)

Goals Soccer Centres plc

Interim Results for the six months ended 30 June 2017

Significant strategic progress in the period, early signs of turnaround

Goals Soccer Centres plc ("Goals", the "Company" or the "Group") a leading operator of outdoor small-sided soccer centres with 48 sites, including two in California, USA, announces its interim results for the period ended 30 June 2017.

Underlying Measures

Statutory measures

Although the overall turnaround to profitable growth is taking slightly longer than anticipated there are good early signs of growth from our investments in the Arena upgrade programme and the Clubhouse 2020 pilot sites. The Board remains committed to the strategy announced in 2016.

Corporate Summary

· Accelerated the upgrading of the UK estate:

o 238 of our arenas have necessarily now been fully upgraded:

§ 27 clubs with five arenas or more upgraded (total 207) have delivered football sales growth of 5.1% for the first 10 weeks of H2

§ 11 clubs with four or fewer arenas upgraded (total 31) have not delivered an increase in football sales in for the first 10 weeks of H2

§ Future focus will be on increasing the number of clubs with five or more upgraded arenas

§ No further arena upgrades planned for H2; approximately 50 arenas to be upgraded, as part of our annual maintenance programme, during 2018

o First three "Clubhouse 2020" pilot sites opened during the period and delivered sales growth of 8.1% for the first 10 weeks of H2. A further two openings have been completed in Q3

o Next phase of the Clubhouse 2020 rollout, as communicated in July, will recommence following a full evaluation to optimise the investment returns from the initial five pilot clubs

o Plan to launch Goals Junior Academy into the vibrant junior and youth markets in H2

· Entered into a 50:50 Joint Venture (the "Joint Venture") with City Football Group ("CFG"), the global football business who own Manchester City and New York City Football Clubs amongst others, to rollout the Goals brand in North America:

o CFG has invested $16million cash immediately and granted a licence to use its brands in North America

o This will fully finance the planned rollout of the Goals brand in North America

· Opened our second US club in Pomona, California in February 2017, commenced construction of our third US club, in Rancho Cucamonga, California in June 2017. Construction of our fourth US club to commence during Q1 2018

· Value engineered our US club design and reduced development costs from $4.2m to approximately $3.2m

Financial Summary

· Like-for-like sales1 for the period increased by 1.6% (2016: -2.0%). The closure of the clubhouses at Ruislip, Beckenham and Glasgow South during refurbishment impacted like-for-like sales1 by 0.9%. Adjusted like-for-like sales are therefore +2.5%

· Underlying EBITDA2 of £4.8m (2016: £5.6m)

· Underlying Profit Before Tax3 of £2.8m (2016: £3.8m)

· Operating costs increased by £1.0m due to investment in club and central resources to improve levels of support for our strategic initiatives and well publicised cost headwinds: new leadership £0.3m; advertising & sponsorship £0.3m; investment to improve standards £0.1m; and statutory increases in Living Wage and Business Rates £0.3m

· Launch costs of £0.2m relating to the launch of our second US centre at Pomona in Los Angeles in February 2017

· Balance sheet well capitalised with net assets of £93.0m. The investment by CFG allows the Company to focus UK cash flow on investment in the Arena upgrade programme, clubhouse modernisation and reducing gearing

· No interim dividend is proposed

Outlook

The strategic plan outlined in June 2016 is already showing progress and we are encouraged by the early indicators.

We anticipate growing like-for-like sales in the second half, albeit at a slower rate than originally expected. This is principally due to some clubs underperforming which have not received the required level of arena investment. We are also highly cautious about the pressure on consumer spending.

With our exciting developments in the US and clear signs of growth from the investments we have made, we are confident that we can deliver improved returns, over time, for Goals shareholders.

Nick Basing, Chairman of Goals, said:

"This has been a crucial phase in rebuilding the Company to secure a profitable future. With our investment in both the Arena upgrade programme and Clubhouse 2020 modernisation, the Board is confident that we will deliver improved returns over time for shareholders. The Joint Venture with CFG, the global football group who own Manchester City and New York City Football Clubs amongst others, is a transformational deal. It allows Goals to profitably develop the nascent North American market, and at the same time invest the cash generated in the UK on developing our proposition in our domestic market."

Mark Jones, CEO of Goals, said:

"Our initiatives to improve performance have returned like-for-like sales to positive territory with growth of 2.5% in H1.

The operational actions to improve the customer proposition have been executed well delivering enhanced experience. Customers have responded positively by increasing their dwell time, driving ancillary spend in areas such as food and beverage.

We are pleased to have opened our second US site in Pomona and are progressing well with our third site, Rancho Cucamonga. We have a fourth in our pipeline. We are excited about the opportunities to grow our US business with CFG.

We have begun our journey in turning round the business and there remains considerable opportunity to deliver continued improved performance and returns from the business." ​

12 September 2017

*- City Football Group currently owns a number of football clubs, including Manchester City which plays in the English Premier League, New York City which plays in Major League Soccer and Melbourne City which plays in the Hyundai A-League in Australia.

Enquiries:

Notes:

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Notes supporting underlying performance measures which are used throughout the interim results statement. The Board believes that these measures better reflect the underlying performance of the Group and therefore provide a more meaningful comparison of performance from period to period. These measures are used internally to evaluate performance of the Group.

1. Like for like sales is used as a key measure of core same club growth.

2017 like-for-like sales are based on clubs opened prior to 1 January 2016

2. Underlying EBITDA reflects the underlying trading of the business excluding any one-off costs. It is calculated by taking Earnings Before Interest, Tax, Depreciation and Amortisation adjusted for the impact of the non-recurring costs and launch costs as shown below:

3. Underlying Profit Before Tax reflects the underlying trading of the business excluding any one-off costs. It is calculated by taking Profit Before Tax adjusted for the impact of the non-recurring costs and launch costs as shown below:

4. Underlying diluted earnings per share is diluted earnings per share adjusted for the net of tax impact of the non-recurring costs and launch costs as shown below:

Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year plus the dilutive element of all outstanding relevant share options outstanding during the year. For the period ended 30 June 2017 this was 75,644,642 (2016: 59,465,060).

5. Underlying free cash flow is net cash flow from operating activities adjusted for the cash impact of the non-recurring costs and launch costs:

Business Review

I am pleased to announce that we have made progress with each of the strategic priorities, outlined below. Group like-for-like sales were +1.6% during the period (H1 2016: -2.0%).

• Grow and innovate the UK core estate

• Develop new capabilities and gain competitive advantage

• International expansion of centres and brand

• Unlock underlying asset potential

Goals UK

Our UK like-for-like sales1 for the first six months of the year increased by 1.6% to £16.6m (2016: £16.4m). The increase excluding disruption was 2.5% as the closure of the clubhouses at Ruislip, Beckenham and Glasgow South during refurbishment reduced like-for-like sales1 by 0.9%.

Our Arena modernisation programme is well advanced with 238 arenas (51% of our estate) having been upgraded. ProTurf arenas and improved L.E.D. lighting have contributed to an enhanced customer experience on the pitch encouraging both existing players and new players to enjoy the better experience. Following investment, the average pitch age has reduced from 7.0 years to 4.1 years. In the first 10 weeks of H2, football sales have grown where five or more arenas were upgraded.

· 5 or more new arenas (27 clubs, 207 arenas): 5.1% growth

· Between 1 and 4 new arenas (11 clubs, 31 arenas): 0.8% decline

· No new arenas: 7.6% decline

Our arena estate is now of high quality and the future focus will be on maintenance capex and, where appropriate, increasing the number of clubs with five or more upgraded arenas.

The first "Clubhouse 2020" major refurbishment opened at Ruislip in April and Beckenham and Glasgow South have also been completed in H1. We are pleased with the initial results that these clubs have generated. In the first 10 weeks of H2 like-for-like sales1 at these clubs was +8.1% with the football sales growing by 8.6% and food and beverage sales growing by 13.1%.

Wembley and Leeds have been completed within the past two weeks and whilst it is too early to make any formal judgement, we are hopeful that we will see continuing success from these clubs. In July, we notified shareholders that before investing further in Clubhouse 2020, we wish to undertake a post completion review to fully evaluate the investment returns from these initial five clubs to determine the optimum capital and labour models. We expect to complete this exercise during Q4 and to recommence the rollout in early 2018.

We have completed a review of the potential to expand our range of services within the vibrant junior and youth markets and plan to launch Goals Junior Academy in H2. This is expected to contribute towards EBITDA from 2018.

Goals US

After a number of years of relatively strong performance, Goals US experienced short term operational issues during H2 2016 and Q1 2017, resulting in a decline in like-for-like sales of 10.7% to $0.8m (2016: $0.9m) and a decline of 18.2% in club EBITDA to $0.3m (2016: $0.4m). We have taken actions to strengthen the US business with the appointment of a new senior level operations executive and have seen a steady improvement with like-for-like sales strongly improving quarter on quarter and returning to growth for the first 10 weeks of H2.

Our second US club at Pomona in Los Angeles opened in Q1 2017. The club incurred launch costs of £0.2m during the period.

We commenced construction of our third US club, in Rancho Cucamonga, California in June 2017. We have value engineered our US club design during the period and successfully reduced development costs from $4.2m to approximately $3.2m for future projects.

North American Joint Venture

In July 2017, we entered into a strategic 50:50 Joint Venture with CFG, the global football group which owns a number of leading football clubs including Manchester City and New York City, to accelerate the growth of the Goals brand in North America.

All of Goals' North American operations, which include all existing and pipeline sites, have been transferred to the Joint Venture and CFG has provided $16 million of initial committed expansion capital which combined with cash flow from the Joint Venture, will self-finance new site openings in North America. The Joint Venture is being led by a six-member board, chaired by Nick Basing.

The Joint Venture combines Goals' existing North American operational expertise and site sourcing capability with CFG's soccer, marketing and commercial expertise. The substantial new funding will accelerate the growth of Goals' existing North American presence and also allow the Company to focus UK cash flow on investment in the Arena upgrade programme and clubhouse modernisation project in the UK.

The Joint Venture has a licence to use the brands which CFG owns, including Manchester City, to drive its North American marketing activity where appropriate. The Joint Venture will also be able to engage in targeted promotional initiatives across CFG's fan networks.

The construction of our third site in Rancho and all future sites will be funded by the Joint Venture.

We plan to commence construction of our fourth club in Q1 2018 and have begun work to secure further sites.

The Company incurred professional fees and other costs of £0.5m completing the Joint Venture. These costs will be expensed in the second half of the year. All future financial results of Goals US are expected to be consolidated on a proportionate basis.

Financial Review

Group sales for the first six months of the year increased by 2.2% to £17.4m (2016: £17.0m) and like-for-like sales1 continued their recovery and increased by 1.6% (H1 2016: -2.0%). As a result of the investment in upgrading clubs and in central and club resources there has been a steady recovery in like-for-like sales1 since H2 2015.

The Clubhouse 2020 refurbishment projects completed during the period resulted in a reduction in sales and EBITDA of £0.2m due to clubhouses being closed for a 6-week period. Like-for-like sales1, Underlying EBITDA2 and Profit Before Tax3 have not been adjusted to reflect this disruption. Like-for-like sales excluding this disruption increased by 2.5%.

Underlying Group Club EBITDA2 declined by 6.7% to £6.7m (2016: £7.2m). This decline has been driven by an increase in UK club overheads of £0.6m (8.3%) due to investment to support our strategic initiatives and well publicised cost headwinds: advertising & sponsorship £0.2m; investment to improve standards £0.1m; and statutory increases in Living Wage and Business Rates £0.3m.

Our Head Office costs increased by £0.4m to £2.0m (2016: £1.6m) as the UK & US leadership teams were strengthened. Underlying Group EBITDA2 declined by 15% to £4.8m (2016: £5.6m). Group operating profit declined by 27.9% to £2.8m (2016: £3.9m).

Financial expenses reduced to £0.2m (2016: £0.4m) as average debt during the period reduced due to the share placing of 16.75m shares at a price of 100p in June 2016. Net debt at the period end was £28.6m (2016: £19.2m) and Net Debt to Underlying EBITDA2 was 2.7 times (2016: 1.7 times).

Group Profit Before Tax was £2.6m (2016: £3.5m). Underlying Profit Before Tax3 reduced by 25.8% to £2.8m (2016: £3.8m). Underlying Earnings Per Share4 declined by 42.0% to 2.9p (2016: 5.0p) due to the decline in Underlying profit and an increase of 27.2% in the diluted weighted average number of ordinary shares.

Free cash flow5 declined by £2.0m to £2.1m (2016: £4.1m) due to the reduction in Underlying Group EBITDA2 of £0.8m, working capital movements of £0.9m and income tax of £0.3m. The Group invested £6.1m in capital expenditure (2016: £1.6m) during the period of which £3.9m was spent on upgrading our existing UK clubs and £2.2m on new sites in the US. The Group invested £0.2m on software development systems during the period.

The substantial investment by CFG into the Joint Venture will fully finance the planned rollout of the Goals brand in North American and allow the Company to focus UK cash flow on investment in the Arena upgrade programme and clubhouse modernisation projects in the UK.

The Group's balance sheet is well capitalised with net assets of £93.0m (2016: £91.5m). The Group has a long term non-amortising bank facility with Bank of Scotland of £42.5m which expires in July 2019. Our exposure to recent exchange rate fluctuations has been mitigated by borrowing the development costs of the new centre at Pomona in US dollars.

Dividend

The Directors do not plan to pay an interim dividend and intend to recommence dividends when appropriate.

Mark Jones

CEO

12 September 2017

Consolidated condensed statement of comprehensive income

For the six months ended 30 June 2017

Other comprehensive income

Items that will be subsequently reclassified to profit or loss

Consolidated condensed balance sheet

at 30 June 2017

Consolidated condensed statement of cashflows

For the six months ended 30 June 2017

Consolidated condensed statement of changes in equity

for the six months ended 30 June 2017

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 2016 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 2016. The comparative figures for the financial year ended 31 December 2016 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditor 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.

There are various amendments to standards and interpretations which are mandatory for the first time for financial periods commencing on 1 January 2017 and have been adopted by the Group. These have no material impact on the net assets or results of the Group.

The Interim Statement was approved by the Board on 12 September 2017.

Basis of consolidation

The financial statements consolidate the financial statements of the Company and its subsidiaries. Subsidiaries are entities controlled by the Group. 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 applicable 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: hot and cold snacks; 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.

Business segments

The Group operates primarily in the UK and its only trading activity is the operation of soccer centres.

Exceptional items

Items that are material either because of their size or their nature, and which are non-recurring, are presented within their relevant consolidated income statement category, but highlighted through separate disclosure. The separate reporting of exceptional items helps provide a better picture of the Group's underlying performance. Items which are included within the exceptional category include:

· Costs associated with major restructuring programmes;

· Significant impairment charges in relation to goodwill, intangible or tangible assets;

· Other particularly significant or unusual items.

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.

Intangible assets - 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 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. 

Intangible assets - other

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and less accumulated impairment losses. Impairment testing is performed where an indication of impairment arises.

Amortisation

Amortisation is charged to the income statement on a straight line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated useful life of the software development assets is ten years for the Smart Centre system and five years for the App and website.

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:

The value of each centre 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.

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 and bank borrowings.

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 cashflows.

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.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less impairment.

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.

Long-Term Incentive Plan (LTIP)

The LTIP allows employees to acquire shares of the Company. The fair value of the LTIPs 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 LTIPs. The fair value of the LTIPs granted is measured using a pricing model, taking into account the terms and conditions upon which the LTIPs were granted. The amount recognised as an expense is adjusted to reflect the actual number of LTIPs 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.

New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the year ending 31 December 2017 and beyond and have not been applied in preparing these financial statements including:

IFRS 15 Revenue from Contracts with Customers

The standard specifies how and when revenue is recognised, using a principles based five-step model. This will be effective for the Group in 2018. Given the nature of the group's revenue streams as disclosed in the revenue policy note, no significant impact is expected to arise as a result of this standard.

IFRS 16 Leases

The IASB has issued IFRS 16 'Leases' which provides a new model for lease accounting in which all leases, other than short-term and small-ticket-item leases, will be accounted for by the recognition on the balance sheet of a right-to-use asset and a lease liability, and the subsequent amortisation of the right-to-use asset over the lease term. IFRS 16 will be effective for the group's year ending 31 December 2019 and is expected to have a significant effect on the group's financial statements, increasing the group's recognised assets and liabilities and affecting the presentation and timing of recognition of certain amounts in the income statement.

IFRS 9 Financial instruments

The standard simplifies the classification, recognition and measurement requirements for financial assets, financial liabilities and some contracts to buy or sell non-financial items. This will be effective for the Group in 2018.

With the exception of IFRS 16, the Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods. Beyond this, it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed.

2. Segmental reporting

IFRS 8 'Operating Segments' requires a "management approach" under which segment information is presented on the same basis as that used for internal reporting purposes to the Chief Operating Decision Maker, which is the Board. As each club has similar economic characteristics, provides the same services to similar customers and operates in a similar manner, the directors, therefore, consider that there is one reporting segment relating to the operation of outdoor soccer centres which includes two (2016: one) clubs outside of the UK.

3. Tax

Corporation tax for the interim period is charged at 19.5% (June 2016: 20.0%), representing the estimated effective tax rate for the full financial year.

A reduction in the UK corporation tax rate from 21% to 20% (effective from 1 April 2015) was substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will reduce the company's future current tax charge accordingly. The deferred tax liability at 30 June 2017 has been calculated based on these rates.

4. Dividends

No interim dividend is proposed for the period ended 30 June 2017 (2016: £nil).

5. Exceptional items

During 2017, Goals Inc incurred £0.2m of launch costs following the opening of the Pomona club in the USA.

6. 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 2017 plus all outstanding relevant share options at that date.

7. Property, plant and equipment

8. Intangible assets

9. Deferred tax liability

Deferred tax assets and liabilities are attributable to the following:

10. Trade and other receivables

11. Trade and other payables

12. Movement in net debt

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

13. Related Party Transactions

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation. Details of transactions between the Company and related parties are as follows:

There were no other related party transactions during the period.

KPMG LLP

INDEPENDENT REVIEW REPORT TO GOALS SOCCER CENTRES PLC

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 2017 which comprises the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated balance sheet, the condensed consolidated cash flow statement and the related explanatory notes.

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 2017 is not prepared, in all material respects, in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRSs) as adopted by the EU and the AIM Rules

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. We read the other information contained in the half-yearly report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) 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.

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 group are prepared in accordance with IFRSs as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report 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

The purpose of our review work and to whom we owe our responsibilities

Jeremy Hall

for and on behalf of KPMG LLP

Chartered Accountants

319 St Vincent Street

Glasgow

G2 5AS

12 September 2017