Powerleague Share Discussion Threads

[5dally] 20/7/2007 08:14

Anyone know what's going on here,not complaining but I cant see why we are rising daily,

[scudmurphy] 19/7/2007 11:31

good to see it on the move at last, breaking out of the 100 barrier is a great step in the right direction.

[5dally] 19/7/2007 09:25

I get the feel good factor from this investment, amazed this thread is so quiet

[slapdash] 18/7/2007 20:38

crikey mikey... slapper

[jav1900] 09/7/2007 20:44

Yup another good day - looking at 110p if doesn't fall back tomorrow

[5dally] 09/7/2007 12:13

The market even likes it more today:-)

[5dally] 05/7/2007 10:51

Well the market seems to like this today,one of my best investments so far :-)

[cupasoup2006] 05/7/2007 10:37

Just noticed PWR got refused planning recently at a site in south London (Ravensborn School in Bromley)

[rovi57] 20/6/2007 11:53

well tipped by MIDAS in the mail on sunday and it flats out?

[cupasoup2006] 18/5/2007 14:05

now I'm confused - if next 3 centres opening H1 next year then that only makes 2 sites opened this year by my reckoning - I thought they were opening more this year. What happened to the Dunfermline site - it's disappeared from the site list?

[5dally] 16/5/2007 11:08

Wednesday, 16th May 2007Top Stories

Wed 16 May 2007
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Powerleague kicks ahead in the City
HAMISH RUTHERFORD

POWERLEAGUE, the AIM-listed five-a-side football operator, has unveiled its next round of openings, including a second site in the City of London.

The Paisley-based company, which has 34 all-weather sites across the UK, said it had signed a lease on an indoor Old Street site, its second in the City.

Last year, the company opened on a site near Liverpool Street on a short-term lease which it says has been highly successful in the financial district. The latest site has a lease of a minimum of nine years, and is expected to open in September.

The London site is one of three Powerleague expects to open in the first half of the year, which will include its first Welsh site, in Cardiff, due to open in July, while a Milton Keynes site will open in September.

Chairman Claude Littner said the company was trading in line with expectations and viewed the year with confidence. A further two sites are expected to be opened in the second half of the year.

Altium Securities analyst Wayne Brown said the market was expecting Powerleague to open five sites for the full year and the announcement should offer investors reassurance.

"It should give investors confidence that not only is the opening programme slightly half one weighted this year, but that all is on track," he said.

Brown, who has a target price of 100p on the stock, said the company's accelerated refurbishment programme allow it to increase prices and returns over the medium term.

By the end of the year the company is expected to have more than 400 five and seven-a-side football pitches.

Its shares were unchanged on 94p yesterday.

[gucci] 23/4/2007 15:51

i give up
back to 80p it seems!!!

[gucci] 23/4/2007 15:51

i give up
back to 80p it seems!!!

[gucci] 23/4/2007 15:51

i give up
back to 80p it seems!!!

[nomad70] 17/4/2007 16:56

Picked a few up earlier at 95.5p.

[roodboy] 16/4/2007 15:29

ready for the next leg up?

[gucci] 28/3/2007 15:25

taking off!!!!

[gucci] 27/3/2007 14:22

l2 looking very strong
6 at 90p last one at 94p

[richandjanet] 27/3/2007 13:35

Full write up below

Powerleague - 5-a-side football firm with healthy new openings pipeline

80.5p Epic code: PWR
(Momentum Investor) Those who think we have become a nation of couch potatoes should think again given that 5-a-side football was able to claim a remarkable 2.7m participants in 2005. The fact that this shorter version of the game has eclipsed its traditional 11-a-side counterpart to become one of the most popular sports in the country, goes a long way to explaining the remarkable success of leading AIM-listed 5-a-side operator Powerleague. Under the canny leadership of chairman Claude Littner, Powerleague is forecast to more than double its pretax profit from £2.6m in 2005 to £5.4m in the year which starts on 1 July. And this could be just the beginning with Powerleague's expansion, which should see it double in size, likely to underpin 15-20% earnings growth for several years to come.

History
Powerleague was established in 1999 following the merger of two private companies funded by venture capital firm 3i and has since grown to 34 sites across the UK. However, its development can hardly be described as plain sailing and Littner, an acknowledged turnaround expert most famous for his previous roles as chief executive of Tottenham Hotspur and Amstrad, was forced initially to turn around several loss-making sites. Those problems, which were caused by the previous management's obsession with expansion at the expense of good housekeeping, are now well behind it with the latest half-yearly results showing pretax profit increasing 21% to £1.7m on turnover ahead by 15% to £10.9m.

All weather pitches
Since then, Powerleague has continued a roll out of its centres, each of which typically comprises three acres of land with 10-11 all-weather and floodlit artificial football pitches, as well as a clubhouse, changing rooms and bar facilities. The majority are situated within the grounds of schools, universities or other local authority areas.

Most of its money is made from football pitch income which contributes 78% of group operating profit and is highly profitable, with gross margins of over 80%.

Income is generated partly via player registrations but mainly through renting out its pitches at a rate of £4-£5 per player per hour, with the busiest periods being after work on weekdays between 6p.m. and 11p.m.

Block bookings in advance
One reason this business is so attractive is that the vast majority of revenue comes from league competitions and block bookings, which thanks to high levels of demand are typically booked at least ten weeks in advance and therefore provide a high level of predictability to future earnings. Some readers might be surprised that 5-a-side leagues have such pulling power but figures from the Football Association reveal that this is now a major industry involving 23,500 affiliated small sided teams and an estimated 190,000 players. And to make it more realistic there are also promotion and relegation issues to play for, just like in the professional game.

Loyalty to individual teams also provides stickiness to revenues. For example, if a player is injured or moves away, there are always reserve players ready to breach the gap. We also believe that in the event of an economic slowdown, a player is more likely to give up his £40-£50 a month gym membership than forego a football game for the sake of a fiver.

Rising pitch utilisation
One of the most important management indicators is average pitch utilisation and the latest results showed this had improved from 75% to 79%. This reflects both the maturing of recently opened sites and also concerted attempts to increase demand at off-peak times. For example, Powerleague organises children's parties and coaching schools to encourage young boys and girls to participate, while there is also a dedicated sales team addressing the market for corporate events, providing bespoke packages comprising exclusive use of sites, professional player appearances, catering, presentations and event management.

Ancillary services
The remainder of Powerleague's profits come from ancillary services, such as bar sales (13% profit), which fell slightly in the period because of the distraction of the World Cup and because of the trend towards healthier lifestyles, which has seen players replace alcoholic drinks with energy drinks. However, this cloud has a silver lining as vending income (3% profit) saw useful sales growth thanks to a run on non-carbonated health drinks.

Aside from a few fitness centres, sponsorship (4% profit) is the other main source of ancillary income. This side grew 62% from a low base and while not yet a major contributor, is still useful in raising its profile, as sponsors include blue-chip names such as Nike, Microsoft Xbox, Budweiser and Lucozade.

Big expansion push
The main reason for buying Powerleague now is that it is embarking on a major new expansion program with capital expenditure expected to ramp up from £4m this year to £9m next and with gearing just 43%, its balance sheet should cope comfortably.

Part of this investment is being earmarked for the ongoing refurbishment of the older sand filled turf pitches, which still account for 50% of the estate and converting them into new fifth generation pitches, which use rubber crumb fillings made from recycled tyres. This is designed to provide a more realistic playing surface and prevents the notorious burns that players used to get from falling on the old astro turf. The customer reaction has been excellent with the five centres refurbished last summer generating an average 8% increase in income and 36% return on investment.

Five new openings
However, the majority of capex will go on developing new sites with Powerleague on course to open five in the next 12 months. This includes school sites at Milton Keynes and Cardiff, due to open this summer and autumn respectively and one in the City of London, where a planning decision is due this April. A further two sites are in lawyers hands.

Encouragingly the pipeline is extremely healthy with 30 individual sites at various stages of negotiation and this reflects its flexible criteria for site selection. Generally speaking it needs a catchment area with a minimum population of 250,000 within a 15-20 minute drive, strong transport links and ideally no existing competition. It's prepared to do property deals in both the public sector and with private landlords and will consider both small and larger sites with fit-out costs ranging from £0.6m to £1.9m.

Break-even quickly
One reason why Powerleague is aggressive in its approach to new openings is that its economics are extremely favourable. With the help of a massive marketing push at the pre-opening stage, including promotions such as free games in the first week, new openings are EBITDA positive (cash break-even) within the first full month, while after three years, EBITDA margins typically reach 25%.

Crucially, margins across the group are a very respectable 32.1% and this is largely thanks to Powerleague's ability to negotiate cheap rental deals with its school landlords, the average being just £29,000 a year. In return, school pupils are given free use of its facilities during school hours. Importantly, the majority of Powerleague's leaseholds enjoy strong security of tenure with the average term length being 64 years and rents will only increase in line with RPI every 3-5 years.

Staying on the subject of property, Powerleague is hoping to engineer a windfall through gaining planning to develop a London leasehold site while one of its two freeholds, its eight acre head office site in Paisley, near Glasgow, could also eventually be developed.

Competition benign
Usually we would be cautious about the risk of Powerleague's success attracting new competition but barriers to entry are high given the long lead times and planning hurdles required to develop new sites. As one of the first companies to enter this industry, Powerleague is also head and shoulders above existing competition, with nearest rival, AIM-listed Goals Soccer Centres, 375p, only having 21 sites, followed by JJB Indoor Soccer and Playfootball.net with six each. The remainder comes from small independents and council-owned sites, which are typically under invested.

Huge discount to Goals
With the backbone of a seemingly recession proof business exuding strong cashflows and a high visibility of earnings, shares in Powerleague have the potential to generate substantial gains over the next few years. Based on latest forecasts for earnings of 3.8p this year, rising to 4.6p next, the prospective PE falls to an undemanding 17.5 on 1 July, which looks very good value compared to Goals, which trades on a whopping PE of 33.5 times. Buy.

* The writer has a holding

[gucci] 26/3/2007 14:28

YES!!!!!!!
tipped in momentum at weekend

[slapdash] 26/3/2007 08:09

where was this tipped??? Up 5% today

Slapper

[gucci] 24/3/2007 08:42

upwards and onwards

[digitalinvestor] 15/3/2007 15:44

Was disappointed with the results - pretty uninspiring

[maddox] 15/3/2007 15:36

I note that PWR have confirmed their new Cardiff site, which just so happens to be on my old school - Whitchurch High School the largest Comprehensive School in the Country. Its an excellent site with a huge catchment area in a high visibility location, as stated, on one of the main arterial roads into central Cardiff. I wouldn't be surprised if this was a top performing site.

More of the same please.

Regards, Maddox