Goals Soccer Centres PLC (LON:GOAL) was a miss with investors after the five-a-side football pitches operator saw sales fall last year and said profits would be “broadly in line with the lower end of market expectations”.
AIM-quoted Goals has been on a refurbishing spree over the past year in a bid to reignite flagging sales in its core UK market.
‘Old’ centres struggling
The second half of 2017 mirrored that of the first six months: fully-refurbished sites – A.K.A “major Arena refurbishments” – seeing sales jump; those centres with a little bit of work done seeing the sales decline halted; while the rest which are yet to see any investment continue to “perform poorly”.
Only half of Goals’ 46 UK sites have been spruced up, meaning a significant number are struggling to get players onto their pitches.
The company – which Newcastle United owner Mike Ashley has a 5% stake in – has set aside another £3mln to further modernise its estate in 2018 in order “to deliver the compelling proposition which customers clearly seek”.
Like-for-likes down
In total, sales increased 0.5% to £33.7mln in the 12 months to December 31 (2016: £33.5mln), although like-for-like sales declined by 0.5% – partly due to disruption caused by the investment upgrades.
As for profits, Goals expect those to be at the “lower end” of current forecasts. According to Digital Look, the consensus is for an annual pre-tax profit of £6.8mln.
“Our recovery plan remains "work in progress" with 2017 being a period of substantial investment in the UK and significant improvement achieved where major investments have been made,” said chairman Nick Basing.
North America JV coming along nicely
As for the joint venture in the US which it agreed last summer with Manchester City Fc’s owner City Football Group, that is “progressing well”.
The group’s third site opened in Los Angeles last week, while construction on a fourth is set to get underway in the second half of this year.
“We are excited by the progress and the future of our strategic joint venture with City Football Group in North America,” added Basing.
“With our new developments in North America and further investment in our UK business, we are confident that we can deliver improved returns, over time, for Goals shareholders.”
On the lookout for a new boss
As announced towards the end of last year, chief executive Mark Jones is stepping down at the end of this week to become the boss of restaurant and deli chain, Carluccio’s.
The search for his replacement is now at an “advanced stage”, Goals said, and it hopes to make an announcement regarding this “shortly”. In the meantime, chief financial officer Bill Gow will fill in as interim CEO.
Shares were down 5.1% to 74p early on Monday morning.