Five-a-side football pitches operator Goals Soccer Centres PLC (LON:GOAL) took a dive on Tuesday as it reported a sharp fall in first half profits amid concerns over the UK consumer environment.
For the six months ended 30 June, Goals saw pre-tax profits sink to £2.6mln (H1 2016: £3.5mln) on slightly higher sales of £17.4mln (H1 2016: £17mln).
Operating costs increased by more than £1mln to £12.5mln (H1 2016: £11.1mln) as staff costs, higher business rates and a modernisation programme took their toll.
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Slower-than-expected sales growth in H2
Goals – which runs 46 locations across the UK – said it was “highly cautious” about the pressure on consumer spending.
The AIM-quoted group has also been investing heavily in its pitches and clubhouses recently, but the sites which haven’t received “the required level of arena investment” are underperforming and weighing on the overall business.
As a result, Goals said like-for-like sales growth in the second half will be slower than originally expected.
‘Crucial phase’
“This has been a crucial phase in rebuilding the company to secure a profitable future,” said chief executive Nick Basing.
“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.
“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.”
Excited by US growth
Away from the UK, Goals said it is excited by expanding its business over in the States after it recently struck a deal with Manchester City owner City Football Group to accelerate the growth of the brand in America.
Construction work on its fourth US club will kick off early next year, having only starting building its third venue in California earlier this summer.
The growing US business was hit by “short-term operational issues” towards the end of 2016 and start of 2017 which affected sales and underlying earnings.
Shares dipped 10.4% to 93.2p in early deals on Tuesday.