14 January 2019 – trading update

The operator of outdoor small-sided soccer centres has provided an update on trading for the financial year ending 31 December 2018.  Underlying sales were fractionally higher at £32.4m (2017: £32.2m), with positive growth in  the second half reflecting the success of the further arena investment.  Adverse weather conditions were unhelpful in the first half of the year.  In the US the South Gate club continues to perform well and is now the best performing site.  Higher costs meant that there was slightly lower profit in the second half.  Full year Group Adjusted Profit for the year is set to be between £4.3m and £4.5m.

Goals anticipates that exceptional costs for the year will be approximately £5.5m, made up of non-cash asset impairments of £4.6m and restructuring costs of £0.9m. The non-cash impairments relate to reductions in the carrying value of 3 clubs and the previously announced sale of the Beckenham North club to Crystal Palace Football Club.  Net debt at the year end was approximately £29m.  Goals has agreed with its lenders to amend its Net Debt/EBITDA covenant from 3.0x to 3.4x at 31 December 2018 and is at an ‘advanced stage of discussions’ to amend the quarterly tests in March and June 2019 to 3.25x, after which the covenant will revert to 3.0x.  Final results are due to be released on 12 March 2019.  At the current share price we believe there is scope for upside and a SPECULATIVE BUY rating is appropriate.