An own goal

GOAL (Goals Soccer Centres) issued iterims for 6 m/e 30-Jun-2012 today. Sales are up 11%, and L4L are up 2%. Adjusted PBT is +10%. Ordinary divvie is maintained, and net debt is a fraction down.

GOAL own soccer pitches: 5-a-sides, that kind of thing. As simple a business model as you could hope for.

A Goals centre typically comprises between 9 and 14 floodlit 5-a-side courts set in an area of at least 2.5 acres. A modern “pavilion” provides quality changing facilities and a licensed lounge catering for post match refreshment. Parking is provided for approximately 100 cars. The majority of centres also include one or two 7-a-side courts.

GOAL had been on my radar for some time, as I saw it in someone’s portfolio, so generally I have a sniff around these things. I have never been attracted to it as an investment opportunity, however. Its gearing is quite high: net debt £53.2m against net cashflow of 10.8m, giving it a gearing of 102%. Its interest cover is 6.3, which is probably OK actually. I don’t think there’s much danger of young British men developing an allergy to football in the near future; although I personally hate exercise.

Although its on a PER 8.8, its EV/EBITDA is 8.1. Its ROE is 12%, which isn’t too bad, but its ROCE is 11.1%. which is fairly unexciting. Property, furnishings and equipment are clearly non-trivial. The share price has done pretty good YTD, being +24%, beating the Footsie resoundingly. Pfft, So, shows you how much I know.

But wait, I’m not done yet. I had expressed concerns that it may be hitting its capital buffers, which would limit the growth story. I surprised myself by actually being right on that one. Along with the results, GOAL also announced that it will be placing 2.4m shares at 115pps to “provide additional balance sheet flexibility”.

The share price is down 3.7% today to 117.99p at the time of writing. Those placings can be pesky. The placing of £2.8m doesn’t seem to alter the net debt by a huge amount. So I’m presuming that the placement is to ease liquidity rather than fuel expansion. Current assets are 5.8m, and current liabs are 8.0m. I could be wide of the mark – it wouldn’t be the first time – but if you saw significant expansion potential, wouldn’t you want to raise a little more?

I’m interested in following the story on this one – but not interested in it as an investment. Let’s see what happens.


About mcturra2000

Computer programmer living in Scotland.
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