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Share Name Share Symbol Market Type Share ISIN Share Description
Goals Soccer Centres LSE:GOAL London Ordinary Share GB00B0486M37 ORD 0.25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 56.50p 54.00p 59.00p 56.50p 56.50p 56.50p 7,300 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 33.1 8.2 9.3 6.1 42.50

Goals Soccer Centres Share Discussion Threads

Showing 751 to 775 of 875 messages
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DateSubjectAuthorDiscuss
23/1/2014
19:46
Bullish article in "Shares" mag today.
killieboy
16/1/2014
10:20
We hold a long position in this security. Nothing in this write-up constitutes investment advice. This note reflects my own views and does not necessarily reflect the views of my employer. FUNDAMENTALS Situation Goals Soccer Centres plc is a UK based operator of five-a-side soccer facilities with 44 sites. 43 are in the UK and 1 is in Los Angeles and all are leased on long term leases from local municipalities. The company is run by the founder, who pioneered commercial five-a-side soccer in the UK and is currently one of the largest holders with 7.9% of the company's stock. Multiple short term problems have been obscuring the durable earnings power of this business. These issues are resolving and we think EBITDA will increase 33% between now and the end of 2015. This will allow deleveraging and further growth at high returns on capital. As a result, we expect an IRR of close to 30% on the position through 2015 with no increase in the company's EV/EBITDA rating and potentially attractive continuing growth thereafter. We began looking at it after the stock suffered when shareholders rejected a private equity bid in July 2012 and instead undertook a placing in September 2012 to pay down debt, which had grown significantly to a peak of 4.5x EBITDA due to site rollout and one off factors that were depressing earnings. These factors included: 1. A large pipeline of immature sites that price at up to a 25% discount to mature sites for the first five years of their existence. 2. Significant weather related disruptions in soccer play as the UK has had the worst winter in the previous 50 years each of the last 3 years (with each one obviously worse than the last). 3. The effects of the recession, which were disproportionately felt by the young men who are Goals's prime customers. This had the biggest effect on their ancillary revenues from bar use and birthday/corporate parties rather than regular game play. 4. An increase in taxes that raised taxes from 0% to 20% on league soccer games that was applied in 2011. Goals absorbed half of this and passed half to the customers. This tax increase was subsequently fully overturned on appeal in September 2012. We expect net debt to be below 3.0x EBITDA by year end due to debt paydown and higher earnings, and this will enable them to resume expansion. Three sites are already underway. Business Description and Competitive Position Goals operates 43 UK sites and Power League, their other large (and PE owned) competitor has 46 facilities (there is also a much smaller third operator with 14 sites). These companies partner with municipal authorities and schools to develop facilities that are used by community groups during non-peak hours. Since municipal authorities are not primarily concerned with profit maximisation, Goals is able to secure rental terms of over 50 years at low rates and their reputation and track record of working well in communities and in close proximity to children acts as a significant barrier to new entrants. No new companies have entered the market since 2004, even though the number of sites across the country has more than doubled since then, which shows the significant barriers to new entrants. These new sites are often in better cities than the old ones, since the concept is now more accepted by local governments. This lack of competition for sites and ability to build facilities on public property without paying market rents for scarce UK land has allowed Goals to deploy capital at a post tax return of over 11% historically. Sites typically break even within a month of opening and generate close to £400k of EBITDA on revenues of about £850k. New sites cost £1.5 million, (down from £2.2 million thanks to modularization) and have low maintenance capital needs so cash on cash returns are excellent. There are approximately 2.0 million weekly players of soccer in the United Kingdom and in recent years the smaller five-a-side format has been gaining share. Soccer play, especially by members of leagues, who are the largest customer group, is very economically resilient. Like for like football revenues fell only 5% during the post 2007 recession, though economic conditions do impact the speed at which new sites ramp up and the ancillary revenues from bar use, birthday parties, and corporate events. The business has raised prices by an average 2-3% a year since its 2004 IPO and sees no change in player activity in response to this rate of price increases. The company's pricing power was underscored when the government imposed a 20% sales tax on league football games in 2011. The company passed through half of the expense but utilization did not fall, though that was the only year the company didn't raise its own prices. We have tracked the pricing at every site for Goals and Powerleague across the UK in recent months and note that the company raised prices successfully in October 2013 at all its sites, especially at its more immature ones. This price increase is yet to be reflected in reported earnings or analyst reports, which are expecting flat revenues. Current Valuation and Earnings Normalization: Goals currently has a market cap of close to £100 million and earns close to £9.0 million of free cashflow ex growth capex. LTM EBITDA is £14.0 million on a company with an EV of £151.4 (£100 million of equity and £51.4 million net debt) yields an EV/EBITDA of 10.8. We believe Goals's EBITDA will increase 33% over the next several years from several factors. 1. Price increases: Completed price increases, maturing of new sites to match pricing on old sites and raising mature site prices again by 2% (less than historical averages) each year mid year will raise 2015 EBITDA by £2.4 million. This is realistic in light of their historical pricing power and the quality of their immature site locations, which we have analysed. 2. Utilization normalizing: A recovery in the existing sites to pre-recession volume levels after the 5% drop and an increase in new sites to match the volume of old sites should increase EBITDA by £1.4 million. We believe this is realistic if economic and weather conditions normalize. 3. Partially offsetting this, costs will also rise. Using a cost inflation of 3.5% per year (which is above the rate historically) on all costs including from rent resets on sites coming up for rent repricing (which is struck based on CPI every five years) reduces 2015 EBITDA by £1.7 million. This implies shrinking margins on mature sites, which we think is conservative. 4. The least certain but potentially very juicy piece of return would be a recovery in ancillary revenues. As the British economy recovers, revenues from bar sales and birthday parties, which are more cyclical, are likely to recover somewhat. If they recovered to peak levels (which we don't expect) it would increase EBITDA a further £3.4 million. Analyst estimates show flat earnings despite the fact that these factors should drive significant revenue growth at very high incremental margins (close to 100% for non ancillary revenue). Further, analysts are penalizing the company for capital expenditures spent on new sites without adding any corresponding revenue. In light of Goals's significant growth pipeline, we think this is a mistake. Growth and debt paydown In fact, there is further scope for expansion at even higher returns on capital than in the past. The company is deploying a new modular site format that cuts capital required to build a new site from £2.2 million to £1.5 million, which raises post tax returns on capital to 17%. An analysis of all UK metro areas suggests the industry has scope for at least 40 more sites, which will likely be split evenly between Goals and Power League. Right now Goals is speaking with a number of local governments and has agreements with municipalities for 3 new sites, which will raise EBITDA by almost £1.0 million in the first full year they open and over £1.3 million at maturity. These will cost £4.5 million in capital expenditures, which Goals can easily afford while still paying down debt by at least £18.0 million, all of which value should accrue to the current equity holders (on a current £100 million market cap) between now and year end 2015. We have analysed catchment areas and site locations for each of the competitors across the UK. Given the complexities of the zoning process and the amount of population not yet served, we expect to have many more years of roll out at high returns, which could make the stock interesting for many years to come. Return Bridge based on 30 June 2014 financials and 13 January 2014 market cap (in millions): LTM EBITDA: £14.0 Net Debt: £51.4 Market Cap: £99.7 EV: £151.0 EV/EBITDA = 10.8 + Price Increases of £2.4 + Volume Normalization of £1.4 + EBITDA from 3 new immature sites of £1.0 +50% of peak ancillary EBITDA recovery of £1.7 (50% of £3.7 peak to trough decline) - Cost inflation of £1.7 Ending EBITDA: £18.6 EV at 10.8 multiple: £201.1 +FCF of £9.0 for 2.5 years (from mid 2013) of £22.5 -Growth Capital Expenditures of 3 sites at £4.5 = Cash for debt paydown of £18.0 Ending net debt £33.4, Ending equity of £167.7, Equity IRR = 30.4% Assumptions: (1) Rent increase at RPI of 3.5% applied to site on 5 year anniversary. (2) RPI cost inflation (3) Modular build cost of GBP 1.5M/site on the announced 3 new sites (4) GBP 9.0M of paydown for 2.5yrs (5) Immature EBITDA of 300k/site per announced site (6) 3% price increase (7)Price increase of 15% on 9 immature sites on football revs (8) volume increases of 5% (9) 5% volume LFL recovery (10) 2% price increases on existing estate each September after this (11)Ancillary revenue expands halfway back to the historical peak of 28% of total UK revenue from 26% today vs peak of 30%.
alfreton
03/1/2014
15:44
Citywire tip; Finally, investors must not overlook the most important event of 2014: the World Cup. Leigh Himsworth, head of UK equities at City Financial, has some ideas on who will win. 'The bookmakers are in line to trade well given the football World Cup, but which will get the Golden Boot? GVC is the largest online gaming company in Latin America and has already ramped up its TV ads in anticipation of a busy summer. Goals Soccer Centres, operator of outdoor football centres in the UK and now with an established presence in the USA with a site in Los Angeles, is outperforming its two major competitors and looks set to benefit from the soccer boom in America. With a more favourable winter climate compared to last year, and a boost from the World Cup, it could easily see earnings growth exceed expectations.
davebowler
08/10/2013
14:26
Any thoughts on FUTSAL taking off in the UK one day? FA backing it to some extent already. Very difficult to find pitches for training during winter months of any type. Council wont let you on grass. Sports halls and schools fully booked.
praipus
13/9/2013
14:30
Several very large buys.....just observing and wondering and holding....
pug151
06/9/2013
12:57
On the verge of a breakout?
pug151
03/9/2013
11:34
In line with expectations but a lot of good things coming.
pug151
03/9/2013
07:33
Very lacklustre figures. Almost no growth. Reduced some debt. Has a new management excellence initiative - but what we want is more profit.
yesrupnel
15/8/2013
13:30
a very large buy just before results ....
pug151
09/8/2013
12:23
Well looking back the offer was for 144p last year so if this one moves much more it looks like investors made the right decision to reject it. And you just get the feeling this one might move some more. Anything seems possible in this market the way its been over the past 15 months or so. Even I have been making money.
gerdmuller
09/8/2013
10:48
30k at 158 somebody wants some and won't wait
pug151
07/8/2013
08:45
Well that could be it then. Last broker comment I can see in 3 July with a target price of 145p so it is already past that. Looks like a 3 year high if it moved much more.
gerdmuller
07/8/2013
08:29
Hopefully the good weather is leading to good bookings/capacity around the UK. Certainly consumer spending has increased in June/July as reported yesterday. That could be pointing to a good set of interim results on 3 Sept.
yesrupnel
07/8/2013
07:59
Looks lively again not sure why.
gerdmuller
06/8/2013
09:14
Looks lively not sure why.
gerdmuller
14/6/2013
08:15
Looks like a good appointment as Chairman!
cupasoup2006
22/3/2013
09:49
why shouldnt they take advantage of a depressed market situation?
bubbleandleek
08/3/2013
13:47
Very unlikely to happen but you never know maybe the canadians will make another bid. I think it's six months the time they are not allowed to make an offer and last offer was rejected end of august
sebass
08/3/2013
09:11
Looks like holders were right to reject the bid. This is a good co on a modest valuation and if someone wants to buy it then they should pay a fair price and not try to take advantage of what was a depressed market situation.
gerdmuller
14/9/2012
09:59
GerdMuller good points I agree I think they were very tempted by the capital the canadians were going to put in the business postbid. What I did not understand was why sell the business when the whole model changes significantly with each centre only costing £1.5m. That means with £12m cash generated they could open 4 centres a year and payback £6m a year of debt. That changes everyuthing and the business would be on much firmer footing
sebass
14/9/2012
08:25
The bid was far too low. Management should never have given so much time to the bidders and now all that time has been wasted by them while they focused on the bid. They should have never been prepared to accept a low bid either. Management have come out very badly in all this as they always do when they get the smell of money.
gerdmuller
14/9/2012
07:52
looking like an even better decision than ever to reject the bid...
trytotakeiteasy
13/9/2012
10:59
VAT appeal won - worth £0.5m to PBT SJ
sailing john
12/9/2012
15:23
interesting that stock is only down 16% from bid price of 143p... shows that shareholders were arguably right in rejecting the bid.... if the bidder is going to be stingy this is what they get..... management didn't bother doing an H1 trading update this year so it will also be interesting to see what H1 results are like... I think directors and management too readily accepted a low ball bid just as the group is reducing debt and looking to boost its operational performance.... a year or so from now and the stock should be well above the bid price... we shall see....
trytotakeiteasy
26/8/2012
10:23
Well said spob. Dragon Oil shares are now significantly higher than the 450p offered. Asagi (long DGO, no position GOAL)
asagi
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