LONDON: Shares in Goals Soccer Centres have dipped by six per cent after poor weather weighed on UK trading in the six months ended June 30.
But the five-a-side operator’s sluggish first half at home was brightened by the US, where like for like sales at its LA Centre surged by 20 per cent and progress was made on its roll out across the LA area.
The company noted that its performance in the UK had been below expectations, with like for like sales sliding by two per cent thanks to inclement weather and “softness” in the casual market.
Goals flagged that trading in the UK, where it operates 46 five-a-side centres, picked up in the second quarter, but not enough to recover from the first quarter shortfall.
Across the group, sales were unchanged compared with last year at £17.1 million the first half of last year, with like for like sales down by one per cent.
The company opened new sites in Manchester and Doncaster during the period, and confirmed plans to add a further centre to its UK portfolio in the second half of the year.
And it made further progress in the development of its business in the west coast of America.
It is poised to begin constructing one site in the second half of its financial year, and signalled that it is at the legal stage on the development of three more.
With an estimated two million players, making in the second biggest football market in the US, Goals believes there is rich potential to grow its business in the LA area.
That conviction is only likely to be strengthened by the increasing profile of soccer in the US, thanks to factors such as Liverpool legend Steven Gerrard signing for LA Galaxy, and the recent victory of the American team in the Women’s World Cup in Canada. The US victory was reported to have attracted the biggest audience for a soccer match in the country for a single network.
But analyst Canaccord Genuity believes the expansion will undermine earnings in the short term.
It has cut its earnings forecasts for Goals for this year, 2016 and 2017, stating: “It is difficult to be precise on the timings of the new US openings because of the stifling red-tape to cut through so we have pushed our assumptions back six to 12 months.
The appointment of a new US development director should help in the longer term, but contributes to a bow-wave of costs in the shorter-term.
We have added £300,000 to the US cost base from this year.”
Noting that first half trading had been slightly below its expectations, the analyst retained its buy recommendation but cut its target price to 240p from 255p.
A poor start to the year in the UK versus tough comparatives was not helpful in the all-important first weeks,” it added. “Q2 has recovered but not enough to fully offset the early weakness.
This makes the September peak more important than usual this year.”
Goals highlighted the continuing take-up of its mobile app, noting that total downloads are now in excess of 30,000 and growing on a weekly basis. Among the app’s most used features is the player blast, which has helped reduce cancellations by helping teams find players who are “up for a game”.
The company said it is developing a new loyalty app to increase the use of other features.
Managing director Keith Rogers said: “Our UK performance against some tough comparatives has been slightly below our expectations.
