Costs rise for 5-a-side firm
Higher wages and rates hit Goals profits
Strategic goals: Company says results were ‘disappointing’
Goals Soccer Centres, the five-a-side football operator, said underlying profits fell over the year because of increases in the living wage and business rates.
In a statement the company described its annual results as “disappointing” and said unlocking the potential inherent value” in the business was the “number one priority” for incoming CEO Andy Anson.
Group sales fell by 1.4% to £33.1m (2016: £33.5m). The closure of the clubhouses at Ruislip, Beckenham, Glasgow South, Leeds and Wembley during refurbishment impacted like-for-like sales by 0.4%.
Underlying group EBITDA declined by 10.1% to £10m (2016: £11.2m).
The company issued a profits warning to the market in January and today said: “Despite the significant progress we have made with each of our strategic priorities in 2017, it was a disappointing year financially for the group.”
“This decline has been driven by an increase in UK overheads of £1m (5.6%) due to investment to support our strategic initiatives and well publicised cost headwinds,” said the company.
It spent £200,000 on strengthening the leadership team; while statutory increases in the living wage and business rates added £500,000 to costs. Other inflationary expenses amounted to £300,000. The company does not propose a final dividend.
It said 248 of its 460 arenas have been fully modernised and are delivering good returns at clubs where five or more arenas have been upgraded.
Further UK investment will be financed from existing cash flow until indebtedness ratio reduces.
During the period the company entered a strategic 50:50, self-financing joint venture (with City Football Group which owns Manchester City and New York City Football Clubs amongst others, to rollout the Goals brand in North America.
Andy Anson will join the company as chief executive on 23 April.
Michael Bolingbroke, interim chairman said: “During 2017 we made significant progress towards achieving our strategic plan with investments in the UK making an encouraging start and improving sales.
“There remains work to do to unlock the potential inherent value within the UK estate and this will be the number one priority for the incoming CEO. Together with CFG, our JV partner, we are pleased with the pace of growth in the US and we are already California’s leading 5 and 7-a-side pitch operator.
“We look forward to the arrival of Andy Anson as CEO in late April who will look to execute our existing strategic plan whilst continuing to build on the strong foundations which have already been put in place.
“We remain confident that we will deliver improved returns for Goals shareholders.”
The company said that for the 8 weeks to 24 February trading has been encouraging with like-for like sales up by 4%, benefitting from the investments last year.
Goals was impacted by the challenging weather conditions in weeks 9 and 10 and consequently like-for like sales for the first 10 weeks of the year to 10 March were down 3%. It is anticipated that with more normal weather patterns sales will revert to positive territory.