TIDMGOAL
RNS Number : 6183J
Goals Soccer Centres PLC
13 September 2016
Goals Soccer Centres plc
Interim Results for the six months ended 30 June 2016
Recovery well underway
Goals Soccer Centres plc ("Goals", the "Company" or the "Group")
the market leader in outdoor small-sided soccer centres with 47
sites, including one in California, USA, announces its interim
results for the period ended 30th June 2016.
Financial Summary
H1 2015 H2 2015 H1 2016
------------------------------- --------- ----------- ---------
Sales GBP17.1m GBP15.9m GBP17.0m
Group like-for-like sales(1) -1.9% -11.4% -2.0%
Underlying EBITDA(2) GBP6.2m GBP5.6m GBP5.6m
Underlying net cash from GBP4.3m GBP6.3m GBP4.1m
operations(3)
Underlying profit before GBP4.5m GBP3.8m GBP3.8m
tax(4)
Underlying diluted earnings
per share(4) 6.0p 8.3p 5.0p
Statutory measures
Profit before tax GBP4.5m (GBP10.6m) GBP3.5m
------------------------------- --------- ----------- ---------
Corporate Summary
-- The rate of like-for-like sales decline slowed significantly
from (11.4%) in H2 2015 to (2.0%) following execution of the
near-term operational improvement plan;
-- For the first 11 weeks of H2 there has been a return to like-for-like sales growth;
-- Underlying net cash from operations of GBP4.1m (2015: GBP4.3m);
-- No dividend is proposed for the current period;
-- Balance sheet strengthened through a successful share placing
of GBP16.75m in June 2016, investment programme started;
-- Board restructured and strengthened with the appointment of
Mark Jones as CEO from 1 July 2016, further supported by the
appointments of Michael Bolingbroke as Senior Independent Director
and Scott Lloyd and Christopher Mills as Non-Executive
Directors;
-- Independent Strategic Business Review of the business has
been completed with a new 5 year strategic plan set;
-- An Arena modernisation programme commenced with 46 pitches
completed to date and a further 86 to be completed by year end;
-- New "Clubhouse 2020" concept to be completed in three sites
in Q1 2017. Rollout planned over next 18 months, subject to
results;
-- Completion of second US centre in California due for opening in December 2016.
Nick Basing, Chairman of Goals, said:
"Whilst the financial results were below potential, they were
anticipated and I am encouraged that our initial performance
improvement plan has resulted in positive like-for-like sales for
the last 11 weeks.
We have invested more capital in rejuvenating our core estate in
the last 3 months than over the last 10 years. I am confident that
this strategy will underpin future organic growth.
There remains much still to do, but I am pleased to say that we
are further ahead in the steps to recovery at this stage than we
thought we would be. So far so good."
13 September 2016
Enquiries:
Goals Soccer Centres plc
Nick Basing, Executive Chairman
Mark Jones, CEO
Bill Gow, CFO 01355 234 800
Canaccord Genuity Limited (Nominated Adviser
and Broker)
Bruce Garrow
Chris Connors
Richard Andrews 020 7523 8350
Instinctif Partners
Matthew Smallwood
Guy Scarborough 020 7457 2020
Notes:
1 Like-for-like sales are based on centres opened prior to 1
January 2015
2 Underlying EBITDA is Earnings Before Interest, Tax,
Depreciation and Amortisation adjusted for the impact of the
non-recurring costs of GBP0.3m (2015: GBPnil).
3 Underlying net cash generated from operations is net cash
generated from operations for the impact of the non-recurring costs
of GBP0.3m (2015: GBPnil).
4 Underlying Profit Before Tax is Profit Before Tax adjusted for
the impact of the non-recurring costs of GBP0.3m (2015: GBPnil) and
Underlying diluted earnings per share is diluted earnings per share
adjusted for the net of tax impact of the exceptional costs
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Chairman's Statement
In March 2016 I outlined the six key short term priorities of
the Company, being the appointment of a new Chief Executive Officer
and new Non-Executive Directors, the completion of an in-depth
independent strategic business review, the development of the
overall investment case, completion of the US business plan and the
implementation of a near-term operational improvement plan. These
have now all been achieved or implemented.
I am pleased to report that following the implementation of the
near-term operational improvement plan we are already seeing
improved trading, however, there is still more to be done.
During the second half of 2015 the Company reported
like-for-like sales of -11.4% compared with the equivalent period
in the prior year. Following the Strategic Business Review,
identification of the causes of the poor underlying performance and
subsequent near-term remedial actions, this has improved to -2.0%
in H1 of this year with a further improvement to positive
like-for-like sales in the first 11 weeks of H2. We remain on track
to deliver results consistent with the Board's expectations for the
year as a whole.
Business Review & Strategic Plan
During the period the Group, key members of management and
independent advisors undertook an in-depth review of the business
and operations. A detailed strategic plan for the Group was
developed that is intended to help strengthen its market leading
position, improve Return on Capital Employed ("ROCE") and increase
value for Shareholders over the longer term. The Company set four
strategic priorities as follows:
-- Grow and innovate the UK core estate - through refurbishment
of the existing buildings to a new upgraded brand format,
accelerating the Arena modernisation programme and introducing new
innovative technology to enhance the customer experience;
-- Develop new capabilities and gain competitive advantage -
through developing value added propositions aimed at underdeveloped
growth segments, relaunching quality offering for advanced booked
customers, upgrading IT systems to achieve deeper digital
connectivity and refreshing and reinvigorating the operating
environment;
-- International expansion of centres and brand - through
exploiting our early mover advantage in California, with a centre
to be opened in Pomona, Los Angeles in H2 2016, investigating
market potential to leverage the Goals brand in Asia and explore
other regions for market entry through capital efficient routes;
and
-- Unlock underlying asset potential - through the development
of additional revenue generating lines of business, explore
development potential across the property estate and remain open to
potential accretive, complementary business opportunities.
The results of the Strategic Business Review were announced to
shareholders on 3(rd) June 2016 and 16.75 million shares were
placed at 100 pence a share on 23(rd) June 2016 to deleverage the
balance sheet and allow us to invest in our core proposition on
which we are making good progress.
Phase 1 of the 2016 Arena modernisation programme is complete
with 46 pitches having been upgraded to arenas featuring ProTurf,
shock absorbers and enhanced lighting improving the playing
characteristics of the pitch. A further 86 pitches are planned to
be upgraded during H2 resulting in some short term cost of lost
revenue. This GBP5.1 million of capital investment in pitch
refurbishment in the current year is more than has been spent in
total in the past 10 years. This will reduce the average pitch age
from 7.0 years to 4.3 years. The initial feedback from our current
and lapsed customers has been extremely positive.
We are in the final stages of developing our new brand vision
and team values in association with leading creative agency McCann,
and many of our team members. We continue to develop our "Clubhouse
2020" concept and plan to review initial designs during October. A
focus will be on developing Goals into a leisure destination rather
than solely a football business, and significant progress has
already been made with improving our food and beverage offering.
Subject to planning and licencing permissions, the concept will be
trialled at our Beckenham, Ruislip and Leeds centres in H1 2017 and
thereafter we anticipate that it will be fully introduced and
rolled out across the whole estate over the next 18 months at a
cost of GBP7.9 million.
A full review of each of our revenue streams has been completed
and plans are in place to enhance each of these through deeper
digital connectivity, product innovations and improved staff
training.
These actions, together with other operational changes, have
been instrumental in the improvement in underlying performance,
however our task has only just begun to achieve the returns from
this business that we believe it is capable of.
Financial Review
Group sales for the first six months of the year were slightly
down on the prior year at GBP17.0m (2015: GBP17.1m). The rate of
like-for-like sales decline slowed significantly from -11.4% in H2
2015 to -2.0% (2015: -1.2%) following the implementation of our
near-term operational improvement plan.
Underlying EBITDA declined by 9.8% to GBP5.6m (2015: GBP6.2m)
but has stabilised and is in line with H2 2015. Underlying EBITDA
margin declined to 33.0% (2015: 36.4%) due to the small reduction
in like-for-like sales and an increase in labour costs.
Financial expenses increased by 6.2% to GBP0.4m (2015: GBP0.3m).
Financial expense is expected to reduce in H2 due to the reduction
in debt following the share placing.
Underlying profit before income tax was 15.0% lower at GBP3.8m
(2015: GBP4.5m) but has been maintained at the same level as H2
2015. Underlying earnings per share were 5.0p (2014: 6.0p).
Non-recurring costs of GBP0.3m were incurred on restructuring
following the strategic review of the Group. Further restructuring
costs of approximately GBP0.5m are anticipated in H2.
Underlying net cash from operations declined by 6.3% to GBP4.1m
(2015: GBP4.3m).
The Group placed 16.75 million shares at 100 pence each on 23
June 2016. This significantly strengthened the balance sheet. Net
assets at 30 June 2016 were GBP91.5m (2015: GBP82.7m). Net debt at
30 June 2016 stood at GBP19.2m (2015: GBP38.0m) and current
leverage of net debt to EBITDA is 1.7 times (2015: 2.7 times).
The Group has a long term non-amortising bank facility with Bank
of Scotland of GBP42.5m which expires in July 2019. The Group has
utilised part of this facility to create a 4.0m US Dollar facility
to finance the construction of the next US centre in Los
Angeles.
The Group invested GBP1.6m in capital expenditure (2015:
GBP3.6m) during the period of which GBP1.2m was spent on upgrading
our existing centres and GBP0.4m on new sites in the US.
Goals UK
Sales for the first six months of the year were flat at GBP16.4m
(2015: GBP16.4m). The rate of like-for-like sales decline slowed
significantly from -13.0% in H2 2015 to -2.1% (2015: -1.9%) due to
the success of our near term operational improvement plan.
Like-for-like football sales declined by 3.5% and like-for-like bar
and vending sales increased by 3.5%.
Our overall gross profit margin decreased from 88.7% to 88.1%
due to the increased proportion of lower margin bar sales.
A strong focus on overhead costs was maintained throughout the
period. Despite an 11% increase in labour costs due to the
implementation of the national living wage along with wage
inflation in the south east of England, other efficiency measures
restricted the increase in our average overheads per centre to 4.6%
(2016: GBP163,000; 2015: GBP156,000).
As a result of the slight decline in like-for-like sales and the
increase in overheads Centre EBITDA declined by 8.4% to GBP6.9m
(2015: GBP7.6m) and Company EBITDA declined by 9.0% to GBP5.4m
(2015: GBP5.9m) maintained at H2 2015 levels.
Goals US
Following strong growth in previous years Goals US slowed during
the period with sales declining by 0.4% to GBP0.6m (2015: GBP0.6m)
and EBITDA declining to GBP0.2m (2015: GBP0.3m). We remain
confident in the US model and have identified actions to return
this site to revenue growth.
Construction of our second US centre has commenced and it is
expected to open on time and on budget in Q4 2016. The centre is
located in an excellent location at Pomona in Los Angeles. We have
a solid pipeline of land options for future openings as we look to
progress our US programme when appropriate. The development of
these will be subject to the performance of Pomona.
Board Changes
We have significantly strengthened the Board with the key
appointments of Mark Jones as Chief Executive Officer further
supported by the appointments of Scott Lloyd, Christopher Mills and
Michael Bolingbroke as Non-Executive Directors.
Keith Edelman, Phil Burks and Alex Short all stood down from the
Board during the period. Sincere gratitude is recorded for their
contribution over the years. Alex sadly passed away in July and we
pass on our sincere condolences to his family.
Dividend
No dividend is proposed for the current period (2015: 0.675p per
share) and the directors intend that the Group will return to
paying dividends when the turnaround plan is further advanced and
when the Directors believe it is appropriate to do so.
Outlook
The plan outlined in June 2016 is still in the early stages of
development and implementation, with much still to achieve.
However, following short term actions and tight cost control, and
despite a challenging and competitive environment, trading has
improved with the like-for-like sales decline largely arrested.
Since the start of the second half of the year, trading has
continued to progress with like-for-like sales returning to
positive territory for the first 11 weeks of H2.
Focus remains on enhancing our proposition by investing in our
facilities to upgrade them to reflect our premium positioning in
the market place and, amongst many other initiatives, improving our
food and beverage operations. We are committed to making Goals the
best place to play small sided football and broadening its appeal
as a leisure destination over the longer term, whilst at the same
time creating and delivering value for shareholders through the
plans we outlined in June. We remain on track to deliver results
consistent with the Board's expectations for the year as a whole
and look forward to the future with confidence.
Nick Basing
Chairman
13 September 2016
Consolidated condensed income statement
For the six months ended 30 June 2016
Unaudited Unaudited Audited
Total Total Year
6 months 6 months ended
Ended 30 Ended 30 31 December
June June 2015
Note 2016 2015
GBP000 GBP000 GBP000
Revenue 16,987 17,064 33,013
Cost of sales (1,993) (1,908) (3,688)
Gross profit 14,994 15,156 29,325
Operating expenses (11,119) (10,334) (34,757)
Operating profit/(loss) 3,875 4,822 (5,432)
Financial expense (374) (350) (749)
Profit/(loss) before tax 3,501 4,472 (6,181)
Taxation 3 (846) (939) 99
Profit/(loss) for year attributable
to equity holders of the
parent 2,655 3,533 (6,082)
========= ========= ============
Earnings per share 6
Basic 4.5p 6.0p (10.4p)
Diluted 4.5p 6.0p (10.4p)
Consolidated condensed balance sheet
at 30 June 2016
Note Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
Assets GBP000 GBP000 GBP000
Non-current assets
Property, plant and
equipment 7 109,136 115,821 108,474
Intangible assets 8 4,916 8,781 4,959
Other non-current receivables 585 114 433
Total non-current assets 114,637 124,716 113,866
---------- ---------- ------------
Current assets
Inventories 1,610 1,391 1,381
Trade and other receivables 10 5,703 6,558 4,890
Cash and cash equivalents 12 1,799 2,165 2,074
---------- ---------- ------------
Total current assets 9,112 10,114 8,345
Total assets 123,749 134,830 122,211
---------- ---------- ------------
Current liabilities
Bank overdraft 12 (1,938) (2,088) (2,031)
Trade and other payables 11 (2,736) (2,491) (3,039)
Current tax payable (1,040) (785) (234)
---------- ---------- ------------
Total current liabilities (5,714) (5,364) (5,304)
Non-current liabilities
Other interest-bearing
loans and borrowings 12 (19,079) (38,034) (36,691)
Deferred tax liabilities 9 (7,465) (8,743) (7,478)
Total non-current liabilities (26,544) (46,777) (44,169)
Total liabilities (32,258) (52,141) (49,473)
Net assets 91,491 82,689 72,738
========== ========== ============
Equity
Share capital 188 146 146
Share premium 53,229 37,554 37,554
Retained earnings 37,996 45,334 35,341
Translation reserve 78 (345) (303)
Total equity 91,491 82,689 72,738
========== ========== ============
Consolidated condensed statement of cashflows
For the six months ended 30 June 2016
Note Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended 31
30 June 30 June December
2016 2015 2015
GBP000 GBP000 GBP000
Cashflows from operating activities
Profit for the period 2,655 3,533 (6,082)
Adjustments for:
Depreciation 1,319 1,334 2,600
Amortisation 114 60 199
Financial expenses 374 350 757
Non-cash exceptional items - - 14,450
Income tax expense 846 939 (99)
Share option charge - 28 -
--------- --------- ---------
5,308 6,244 11,825
(Increase)/decrease in trade and
other receivables (521) (1,321) 11
(Increase)/decrease in inventory (227) (243) (233)
(Decrease)/increase in trade and
other payables (743) 93 217
3,817 4,773 11,820
Income tax paid (62) (443) (1,177)
Net cash from operating activities 3,755 4,330 10,643
--------- --------- ---------
Cashflows from investing activities
Acquisition of property, plant
and equipment (1,606) (3,610) (7,645)
Software development expenses (62) (612) (779)
Net cash used in investing activities (1,668) (4,222) (8,424)
--------- --------- ---------
Cashflows from financing activities
Issue of share capital, net of
issue costs 15,717 - -
Loans repaid (17,600) - (120)
Loan related costs (12)
Loans drawn down - 1,223 -
Interest paid (374) (349) (756)
Dividends paid - (774) (1,169)
Net cash (used in)/from financing
activities (2,269) 100 (2,045)
--------- --------- ---------
Net (decrease) / increase in cash
and cash equivalents (182) 208 174
Cash and cash equivalents at start
of period 43 (131) (131)
Cash and cash equivalents at end
of period 12 (139) 77 43
========= ========= =========
Consolidated condensed statement of Comprehensive Income and
Expense
for the six months ended 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended 31
30 June 30 June December
2016 2015 2015
GBP000 GBP000 GBP000
Profit/(loss) for the period 2,655 3,533 (6,082)
--------- --------- ---------
Exchange differences on translation
of foreign operation 381 (30) 12
Deferred tax on share based payments - - (11)
Other comprehensive income for the
period 381 (30) 1
--------- --------- ---------
Total comprehensive income/(expense)
for the period attributable to equity
holders 3,036 3,503 (6,081)
========= ========= =========
Consolidated condensed statement of changes in equity
for the six months ended 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Opening total equity 72,738 79,932 79,932
Total comprehensive income and expense
for the period 3,036 3,503 (6,070)
Deferred tax on share based payments - - (11)
Share based payments credit - 28 56
Issue of share capital 42 - -
Share premium on placing, less associated
costs 15,675
Dividends - (774) (1,169)
--------- --------- ------------
Closing total equity 91,491 82,689 72,738
========= ========= ============
Notes to the Unaudited Interim Report
Goals Soccer Centres plc (the "Company") is a company domiciled
in the United Kingdom.
1. Significant accounting policies
Basis of preparation
The condensed interim financial statement is prepared applying
the recognition and measurement requirements of IFRSs as adopted by
the EU. The company has elected not to prepare the interim
statement in accordance with IAS 34 as adopted by the EU.
The interim statement does not include all the information
required for full annual financial statements and should be read in
conjunction with the financial statements of the company as at and
for the year ended 31 December 2015 which were prepared in
accordance with IFRS as adopted by the EU.
The preparation of the interim statement requires the directors
to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ from
these estimates. The accounting policies applied by the company in
this condensed interim financial statement are the same as those
applied in its financial statements as at and for the year ended 31
December 2015. The comparative figures for the financial year ended
31 December 2015 are not the Company's statutory accounts for that
financial year. Those accounts have been reported on by the
company's auditor and delivered to the registrar of companies. The
report of the auditor was (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
The accounting policies set out below have been applied
consistently to all periods presented in this interim statement,
except for the impact of the adoption of the standards described
below.
There are various amendments to standards and interpretations
which are mandatory for the first time for financial periods
commencing on 1 January 2016 and have been adopted by the Group.
These have no material impact on the net assets or results of the
Group.
The Interim Statement was approved by the Board on 13 September
2016.
Basis of consolidation
The financial statements consolidate the financial statements of
the Company and its subsidiaries. Subsidiaries are entities
controlled by the Group or the Company. Control exists when the
Group has the power, directly or indirectly, to govern the
financial and operating policies of an entity in order to obtain
benefits from its activities. In assessing control, potential
voting rights that are currently exercisable or convertible are
taken into account. The financial statements of subsidiaries
acquired are consolidated in the financial statements of the Group
from the date that control commences until the date that control
ceases. All business combinations are accounted for by applying the
purchase method of accounting.
Revenue
Revenue represents the value of goods and services supplied to
customers (net of Value Added Tax). The Group's revenue comprises
revenues from customers utilising the Group's next generation
football facilities and secondary revenue associated with this
utilisation. Revenue from utilisation of the football facilities
includes: revenue from leagues operated by the Group; revenue from
customers who use the facilities to play on a non-league basis;
Corporate Events; Children's Birthday Parties; and Children's
Coaching.
Revenue is recognised for use of the football facilities when
each game is complete. Secondary revenue includes: soft drink
vending; confectionery vending; bar revenue and revenue from sales
of football equipment. Revenue is recognised for secondary sales at
the time the goods change hands. The Group recognises revenue in
respect of goods and services received under sponsorship and
partnership arrangements by reference to the fair value of goods
and services received under the contract.
Taxation
The tax expense represents the sum of the current taxes payable
and deferred tax. The current tax payable is based on taxable
profit for the year. Taxable profit differs from net profit as
reported in the income statement because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised or increased. The carrying
amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is probable that sufficient
taxable profits will be available to allow all or part of the asset
to be recovered. Deferred tax is calculated at the tax rates that
are expected to apply in the period when the liability is settled
or the asset is realised. Deferred tax is charged or credited in
the income statement, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity. Deferred tax assets and liabilities are
offset to the extent that there is a legal right of offset.
Income tax in the interim period is calculated using the tax
rate that would be applicable to expected total annual pre-tax
results.
Intangible assets - goodwill
Goodwill on acquisitions represents the excess of the cost of
acquisition over the Group's interest in the fair value of the
identifiable assets and liabilities and contingent liabilities at
the date of acquisition. Goodwill is stated at cost less any
accumulated impairment losses. Goodwill is tested annually for
impairment. Impairment is first allocated to goodwill and then to
other assets in the cash generating units on a pro-rata basis.
The value of Goodwill is reviewed at each balance sheet date to
determine whether there is an indication of impairment. An
impairment is recognised whenever the carrying amount of the asset
exceeds its recoverable amount. The recoverable amount of a cash
generating unit is the greater of the value in use and fair value
less costs to sell. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and risks specific to the cash-generating unit.
Any impairment is recognised immediately in the income statement
and is not subsequently reversed.
Intangible assets - other
Other intangible assets that are acquired by the Group are
stated at cost less accumulated amortisation and less accumulated
impairment losses. Impairment testing is performed where an
indication of impairment arises.
Amortisation
Amortisation is charged to the income statement on a straight
line basis over the estimated useful lives of intangible assets
unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful life of the software development assets is ten years for the
Smart Centre system and five years for the App and website.
Property, plant and equipment
Items of property, plant and equipment are stated at cost less
accumulated depreciation and any accumulated impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition or construction of the asset. Borrowing costs directly
attributable to the acquisition or construction of qualifying
assets are capitalised during the period of construction.
Depreciation is charged to the income statement on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as
follows:
Freehold and leasehold - 75 years or lease period if shorter
buildings
Fixtures and fittings:
- pitches - 10 years
- 11-a-side pitches - 10 years
- office furnishings - 10 years
- fixtures and fittings - 10 years
- computer equipment - 4 years
- plant and machinery - 4 years
The value of each centre is reviewed at each balance sheet date
to determine whether there is an indication of impairment. An
impairment is recognised whenever the carrying amount of the asset
exceeds its recoverable amount. The recoverable amount of a cash
generating unit is the greater of the value in use and fair value
less costs to sell. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and risks specific to the cash-generating unit.
Assets under construction are transferred to the relevant asset
category when they become operational and are depreciated from that
date.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is determined on a first-in-first-out basis. Net
realisable value is the amount that can be realised from the sale
of inventory in the normal course of business after allowing for
the costs of realisation.
Trade and other receivables
Trade and other receivables are initially recognised at their
fair value and then stated at amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with an original maturity of three months or less. Bank
overdrafts that are repayable on demand and form an integral part
of the Group's cash management are included as a component of cash
and cash equivalents for the purpose of the statement of
cashflows.
Net debt
Net debt includes cash and cash equivalents and bank
borrowings.
Trade and other payables
Trade and other payables are initially recognised at fair value
and then stated at amortised cost.
Finance costs
Interest is recognised in income or expense using the effective
interest method except that borrowing costs directly attributable
to the acquisition or construction of qualifying assets are
capitalised during the period of construction. The construction of
new centres are treated as qualifying assets as they necessarily
take a substantial period of time to prepare for intended use. The
amount of finance costs capitalised is determined by applying the
interest rate applicable to appropriate borrowings to the
accumulated expenditure on those assets for that period.
Pensions
Contributions to stakeholders or other personal pension plans
are expensed as incurred.
Leasing
Operating lease rentals are charged to the profit and loss
account on a straight line basis over the period of the lease.
Derivative financial instruments
Derivative financial instruments are measured at fair value and
comprise interest rate swaps. These derivative financial
instruments are designated as cashflow hedges in line with the
Group's treasury policy.
The portion of the gain or loss on the hedging instrument that
is determined to be an effective hedge, as defined by IAS 39
"Financial Instruments: Recognition and Measurement", is recognised
in equity, with any ineffective portion recognised in the income
statement. When hedged cashflows result in the recognition of a
non-financial asset or liability, the associated gains or losses
previously recognised in equity are included in the initial
measurement of the asset or liability. For all other cashflow
hedges, the gains or losses that are recognised in equity are
transferred to the income statement in the same period in which the
hedged cashflows affect the income statement.
Any gains or losses arising from changes in fair value of
derivative financial instruments not designated as hedges are
recognised in the income statement.
Exceptional items
An item is treated as exceptional if in management's opinion it
is considered unusual by its nature and scale and is of such
significance that separate disclosure is required for the financial
statements to be properly understood.
Intangible assets
Other intangible assets that are acquired by the Group are
stated at cost less accumulated amortisation and less accumulated
impairment losses. Impairment testing is performed where an
indication of impairment arises.
Foreign currencies
The consolidated financial statements are presented in pounds
sterling, which is the functional currency of the company and the
Group's presentational currency. Each entity in the Group
determines its own functional currency and items included in the
financial statements of each entity are measured accordingly.
Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the
rate of exchange ruling at the balance sheet date. Any gain or loss
arising on the restatement of such items is taken to the income
statement.
For the purpose of presenting the consolidated financial
statements, the assets and liabilities of the Group's foreign
operations are translated into pounds sterling at the balance sheet
closing rate. The results of these operations are translated at the
average rate in the relevant period. Exchange differences on
retranslation of the opening net assets and the results are
transferred to the translation reserve and are reported in the
statement of comprehensive income.
Share-based payments
The share option schemes allow employees to acquire shares of
the Company. The fair value of options granted is recognised as an
employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period during
which the employees become unconditionally entitled to the options.
The fair value of the options granted is measured using an option
pricing model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense
is adjusted to reflect the actual number of share options that vest
except where forfeiture is only due to share prices not achieving
the threshold for vesting.
Dividends on shares presented within shareholders' funds
Dividends unpaid at the balance sheet date are only recognised
as a liability at that date to the extent that they are
appropriately authorised and are no longer at the discretion of the
Company. Unpaid dividends that do not meet these criteria are
disclosed in the notes to the financial statements.
Earnings per share
The company presents basic and diluted earnings per share (EPS)
data for ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the
weighted average number of shares outstanding for the effects of
all dilutive potential ordinary shares which comprise share options
granted to employees.
2. Segmental reporting
All turnover and operating profit is derived from the operation
of outdoor soccer centres. The company operates soccer centres in
both the UK and US; turnover and operating profit generated in the
US is not significant to the company's results.
3. Tax
Corporation tax for the interim period is charged at 20.0% (June
2015: 21.0%), representing the estimated effective tax rate for the
full financial year.
Reductions in the UK corporation tax rate from 23% to 21%
(effective from 1 April 2014) and 20% (effective from 1 April 2015)
were substantively enacted on 2 July 2013. Further reductions to
19% (effective from 1 April 2017) and to 18% (effective 1 April
2020) were substantively enacted on 26 October 2015. The deferred
tax liability at 30th June 2016 has been calculated based on these
rates.
An additional reduction to 17% (effective from 1 April 2020) was
announced in the Budget on 16 March 2016. This will reduce the
company's future current tax charge accordingly and reduce the
deferred tax liability at 30th June 2016 by GBP416k.
4. Dividends
6 months 6 months Audited year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Dividends paid
- 2014 final (0.0132p per
ordinary share) - 774 774
- 2015 interim (0.675p per
ordinary share) - - 395
- 774 1,169
No interim dividend is proposed for the period ended 30(th) June
2016 (2015: 0.675p).
5. Exceptional items
6 months 6 months Audited year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Exceptional items comprise:
* Impairment of software provision - - 750
* Impairment of Pro 5 goodwill - - 3,100
* Impairment of underperforming centres - - 8,124
* Development costs written off - - 2,476
- - 14,450
6. Earnings per share
Basic and diluted earnings per share
Unaudited Unaudited Audited year
Total 6 months 6 months ended ended
ended 30 June 2015 31 December
30 June 2015
2016
Profit/(loss) for the
financial period (GBP'000) 2,655 3,533 (6,082)
________ _________ _________
Weighted average number
of shares 59,465,060 58,465,060 58,465,060
Dilutive share options - 180,127 144,617
_________ _________ _________
59,465,060 58,645,187 58,609,677
Basic earnings per
share 4.5p 6.0p (10.4p)
Diluted earnings per
share 4.5p 6.0p (10.4p)
Diluted earnings per share is calculated using the profit for
the financial period divided by the weighted average number of
shares in issue for the period ended 30 June 2016 plus all
outstanding relevant share options at that date.
7. Property, plant and equipment
Land and Fixtures Assets Total
buildings and fittings in course
of construction
GBP000 GBP000 GBP000 GBP000
Cost
At beginning of period 121,349 13,348 762 135,459
Additions 401 497 708 1,606
Disposals (1,757) (325) (261) (2,343)
Effect of movements in
foreign exchange 595 (113) (60) 422
At end of period
120,588 13,407 1,149 135,144
Depreciation
At beginning of period 17,427 9,297 261 26,985
Charge for period 784 535 - 1,319
Disposals (1,757) (325) (261) (2,343)
Effect of movements in
foreign exchange 41 6 - 47
At end of period
16,495 9,513 - 26,008
Net book value
At 30 June 2016 104,093 3,894 1,149 109,136
At 31 December 2015 103,922 4,051 501 108,474
8. Intangible assets
Goodwill Software Total
development
GBP000 GBP000 GBP000
Cost
At beginning of period 5,719 4,421 10,140
Additions - 62 62
Effect of movements in
foreign exchange 10 10
At end of period 5,719 4,492 10,212
Amortisation
At beginning of period 3,100 2,081 5,181
Charge for period - 111 111
Effect of movements in
foreign exchange 4 4
At end of period 3,100 2,196 5,296
Net book value
At 30 June 2016 2,619 2,296 4,916
At 31 December 2015 2,619 2,340 4,959
9. Deferred tax liability
Deferred tax assets and liabilities are attributable to the
following:
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Property, plant and equipment (7,497) (8,754) (7,510)
Share based payments 11 11 11
Other 21 - 21
Net deferred tax liabilities (7,465) (8,743) (7,478)
10. Trade and other receivables
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Trade receivables 693 561 641
Prepayments and accrued
income 2,683 2,582 2,526
Other receivables 2,315 3,415 1,723
Taxation and social security 12 - -
5,703 6,558 4,890
11. Trade and other payables
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Trade payables 1,874 1,635 2,010
Taxation and social security - 12 5
Other payables 267 177 -
Accruals and deferred income 595 667 1,024
2,736 2,491 3,039
12. Movement in net debt
Net debt is defined as cash and cash equivalents less interest
bearing loans and borrowings.
At beginning Cashflow Non cash At end
of period movement of
period
GBP000 GBP000 GBP000 GBP000
Cash at bank and in hand 2,074 (275) - 1,799
Overdraft (2,031) 93 - (1,938)
________ ________ ________ ________
Cash and cash equivalents 43 (182) - (139)
Borrowings (36,691) 17,612 - (19,079)
________ ________ ________ ________
(36,648) 17,430 - (19,218)
13. Related Party Transactions
During the period, the company acquired services from Harwood
Capital Management Group for the amount of GBP23,853. Harwood
Capital Management are a shareholder of the company and therefore
this has been disclosed as a related party transaction. As at 30
June 2016 there were no outstanding amounts due to Harwood Capital
Management for these services.
KPMG LLP
191 West George Street
Glasgow
G2 2LJ
United Kingdom
INDEPENDENT REVIEW REPORT TO GOALS SOCCER CENTRES PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly report for the six
months ended 30 June 2016 which comprises Consolidated Condensed
Income Statement, Consolidation Condensed Balance Sheet,
Consolidation Condensed Statement of Cashflows, Consolidated
Condensed Statement of Comprehensive Income and Expense,
Consolidated Condensed Statement of Changes in Equity and the
related explanatory notes. We have read the other information
contained in the half-yearly report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the half-yearly report in accordance with the AIM
Rules.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the EU.
The condensed set of financial statements included in this
half-yearly report has been prepared in accordance with the
recognition and measurement requirements of IFRSs as adopted by the
EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly report for the six months ended 30 June 2016 is
not prepared, in all material respects, in accordance with the
recognition and measurement requirements of IFRSs as adopted by the
EU and the AIM Rules.
Bruce Marks
for and on behalf of KPMG LLP
Chartered Accountants
191 West George Street
Glasgow
G2 2LJ
13 September 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DLLFFQKFBBBZ
(END) Dow Jones Newswires
September 13, 2016 02:00 ET (06:00 GMT)
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