AIMprospector
TOPpick
TOPpick: Goals Soccer Centres Five-a-side football operator Goals Soccer Centres could be the most outstanding roll-out opportunity on AIM. The company is this month’s AIMprospector TOPpick.
Goals Soccer Centres is one of AIM’s most successful companies. The company today runs 44 sites,employing 800 people. In the last 12 months the shares have risen 37%. However, four years ago, the shares were trading significantly higher, on a smaller sales base. While the company’s revenues and profits have progressed, its market rating has fallen.
Their success is both a reflection and driver of the women’s game in the US. As Goals has expanded, newer sites have proved to be less profitable. Competition has increased, making site acquisition more expensive and damaging pricing. The increase in debt required to support the continued rollout deterred buyers of the shares. From trading at over 200p in 2009, shares in Goals hit 90p at the beginning of last year. Since then, Goals has successfully deployed modular centre build. Goals’ Chester site was built at two-thirds of the price of a traditional centre, in a build time of 14 weeks versus the usual 22. Modular build has also delivered higher quality results with www.aimprospector.co.uk
Goals was the first operator to receive FA accreditation
minimal build/fit errors. This revolution dramatically changes the financial equation in any potential new site appraisal. Most significant however, has been the dramatic increase in profits delivered by Goals’ one site outside the UK: the Los Angeles site in California. Many UK companies have foundered when trying to take their product Stateside. However, Goals has some powerful trends working in its favour. These factors combine to present an opportunity for profit far in excess of what Goals has achieved in the UK. First, two boring (but reassuring) facts. Goals runs the only five-a-side centre of its kind in the entire USA. Second, it does so profitably: EBITDA from the Los Angeles centre increased a massive 150% in the first six months of 2013 versus the same period in 2012. This took operating profits at Goals US to £0.2m. On an operating profit basis, Goals’ US centre is two-thirds more
profitable than its average UK site. Goals is not a `jumpers for goalposts’ football experience. It is a high quality leisure service, with attached bar facilities. Organised football has strong social and cultural aspects that make it less of a discretionary purchase compared with alternatives such as cinema or dining. This makes Goals the sort of operation that should thrive in a market where consumers have enhanced disposable incomes. Even better, there are further massive advantages to operating in the USA that Goals has just begun to cash in on. From humble beginnings in 1985, the US women’s soccer team is now a true sporting superpower. They have won Olympic gold at four of the last five Games. Of the seven FIFA World Cups, they are most recently runners up, twice winners and have never failed to make the semi-finals. Their success is both a reflection and driver of the women’s game in the 5