TIDMGOAL
RNS Number : 4814A
Goals Soccer Centres PLC
12 September 2018
Goals Soccer Centres plc
Interim Results for the six months ended 30 June 2018
Goals Soccer Centres plc ("Goals" or the "Group") a leading
operator of outdoor small-sided soccer centres with 49 sites,
including three in California, USA, announces its interim results
for the period ended 30 June 2018.
As announced previously in the trading update of 19 July 2018,
Goals' performance has been impacted by the snow in Q1 2018 and
further impacted in Q2 2018 by the re-scheduling of amateur
11-a-side games to midweek time slots when players would normally
be playing 5-a-side.
H2 trading has started well and despite the challenging H1,
Like-for-Like Sales (note 1) for the year to date are now positive.
Trading has normalised and has returned to its positive trend
following the anticipated slowdown during the World Cup,
demonstrating clearly that where major investments have been made
positive sales trends follow. We are therefore optimistic with
respect to the trading outlook for the remainder of the year.
Statutory measures
H1 2018 H1 2017
Sales GBP16.2m GBP17.4m
Exceptional Items (GBP2.7m) -
Operating (Loss)/ Profit (GBP0.6m) GBP2.8m
(Loss)/Profit Before Tax (GBP1.1m) GBP2.6m
Basic Earnings Per Share (1.7p) 2.7p
Net Cash Flow from Operating Activities GBP1.9m GBP1.9m
---------- ---------
Underlying performance
Statutory measures have been adjusted to reflect like-for-like
ownership of Goals Soccer Centers Inc and exceptional costs of
GBP2.7m relating to the impairment of an underperforming site and
restructuring costs.
-- Underlying Like-for-Like Sales (note 1) declined by 2.8%
(2017: +1.6%) to GBP16.2m due to the impact of the challenging
weather conditions in Q1 2018 and the knock-on impact in Q2 2018.
The overall sales trend excluding the impact of adverse weather
maintained its recent positive trend
-- Underlying Group EBITDA (note 2) declined by 15.5% to GBP4.0m (2017: GBP4.7m)
-- Underlying Profit Before Tax (note 3) reduced by 39.5% to GBP1.7m (2017: GBP2.9m)
-- Exceptional costs of GBP2.7m (2017: nil) were incurred of
which GBP2.2m was a non-cash asset impairment charge relating to
the sale of a non-core centre
-- Net debt at 30 June 2018 stood at GBP30.2m (2017: GBP28.6m)
and current leverage of Net Debt/EBITDA is 3.19 times (2017: 2.7
times)
-- The Group's balance sheet remains well capitalised with net
assets of GBP97.2m (2017: GBP93.0m)
-- No interim dividend is proposed.
The notes detailing underlying and adjusted performance measures
can be found in pages 6 to 8 of this report.
Key highlights
-- Goals continues to make progress through investing across its
estate and where modernisation has taken place underlying
improvement in performance is being achieved. There has been
significant progress in 2018 in delivering our strategic plan:
o 260 out of our 460 arenas have been fully modernised and are
delivering good returns at clubs where five or more arenas have
been upgraded. Performance improved at clubs with between one and
four upgraded arenas
o The planned GBP3.0m modernisation of a further 78 arenas is
underway and is expected to be completed by early October 2018.
Following this investment, 73% of the estate will have been
upgraded and 39 of our 46 clubs in the UK will have 5 or more
upgraded arenas.
-- Continued expansion in the US with our Joint Venture partner City Football Group ("CFG"):
o US trading through our JV partnership continues to improve
with total sales up 51.7% to $1.4m and the rollout of new clubs has
been accelerated
o Third US club in Rancho Cucamonga, California was opened in
January 2018
o Fourth US club in Covina, California is under construction and
expected to open in November 2018.
-- Michael Bolingbroke, who has been the Senior Independent
Director since July 2016, was appointed Interim Non-Executive
Chairman in February 2018 and took up the role of Non-Executive
Chairman on 7 September 2018.
-- Our new CEO Andy Anson joined the Group at the end of April.
Whilst Andy's immediate focus is to ensure the investment strategy
is completed effectively, he is also undertaking a review of the
business, the organisation and its operations, to refine and
advance the strategy and to develop a plan to take the Group
forward both in the UK and internationally, and to maximise returns
for shareholders.
Andy Anson, CEO said:
"I am greatly encouraged by our performance in recent weeks
which has seen the business fully recoup the financial effects of
the extreme weather and moved us into positive like-for-like sales
territory for the year to date.
As I carry out my review of the business I am delighted by the
underlying performance of the sites where we have invested
vindicating our strategy to upgrade our estate.
As we move forward I will be focusing on completing the
investment strategy effectively, adapting where appropriate and
delivering to shareholders the performance that Goals is capable
of."
12(th) September 2018
Enquiries:
Goals Soccer Centres plc
Michael Bolingbroke, Chairman
Andy Anson, CEO
Bill Gow, CFO 01355 234 800
Canaccord Genuity Limited (Nominated Adviser
and Broker)
Chris Connors
Martin Davison
Richard Andrews 020 7523 8350
Instinctif Partners
Matthew Smallwood
Andy Low 020 7457 2020
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.
Business Review
The Business
Goals was impacted by the challenging weather conditions in Q1
2018 which directly reduced Sales by GBP0.4m and Profit by GBP0.5m.
This, combined with a further indirect impact on trading throughout
Q2 2018 due to amateur 11-a-side games deferred from Q1 to dates in
Q2, resulted in a decline in Like-for-Like Sales of 2.8%. The
overall sales trend excluding the impact of adverse weather
maintained its recent positive trend.
Trading in H2 has started well and despite the challenging H1,
Like-for-Like Sales (note 1) for the year to date are now positive.
Trading has normalised and has returned to its positive trend
following the anticipated slowdown during the World Cup,
demonstrating clearly that where major investments have been made
positive sales trends follow.
I am pleased to announce that we have made progress with each of
the strategic priorities, outlined below:
-- Grow and innovate the UK core estate
-- Develop new capabilities and gain competitive advantage
-- International expansion of centres and brand
-- Unlock underlying asset potential
We have made further progress in growing and innovating the UK
estate with 260 of our 460 arenas already fully modernised. These
continue to deliver good returns at clubs where five or more arenas
have been upgraded. The planned investment of GBP3m in upgrading a
further 78 arenas is underway and will be complete by early October
2018. This will increase the number of arenas modernised to 338
(73% of our estate) and 39 of our 46 clubs in the UK will have 5 or
more upgraded arenas. Following this refurbishment the average
pitch age will reduce to 3.2 years (2017: 4.1 years). We plan to
continue to invest in our arenas in the coming years.
We continue to review the Return on Investment from the five
"Clubhouse 2020" clubs modernised in 2017 and plan to recommence
this project in due course when sufficient funding is
available.
We continue to expand our range of services within the vibrant
junior and youth markets with the launch of Goals Junior Academy at
4 clubs and a further 4 are planned for H2.
I am pleased to announce that we have entered into a 3-year
sponsorship agreement with The Energy Check, one of the UK's
leading energy consultancies. Goals will receive an annual fee in
exchange for marketing rights across the Goals estate. Further
sponsorship agreements are under discussion.
In conjunction with our JV partner CFG, we continue to make
positive progress in the US. Our third club opened at Rancho
Cucamonga in Los Angeles in January 2018 and our fourth US club in
Covina, Los Angeles, is on schedule to open in November 2018. Sales
at Goals Soccer Centers Inc increased by 51.7% to $1.4m (2017:
$0.9m) and Like-for-Like Sales increased by 4.1% (2017: -4.5%).
Initial trading at Pomona, which opened in 2017, and Rancho
Cucamonga has been below our expectations as it is taking longer
than planned to convert existing 11-a-side players to 5-a-side
players. Marketing initiatives are planned to drive growth at these
centres.
Board
Andy Anson, who previously held senior roles at Manchester
United plc, The Walt Disney Company, and at Channel 4 in the UK,
joined the Group as Chief Executive on 23 April 2018. Whilst Andy's
focus initially is to execute and complete the modernisation of
Goals' estate effectively, he is also undertaking a review of the
Group and will develop a plan to fully realise the potential
inherent value within the UK estate.
Bill Gow, Chief Financial Officer, has resigned from the Group
to join his family business. A search for his successor has begun
and Bill will continue in his role as Chief Financial Officer up
until his successor is identified and has started. The Board would
like to acknowledge and express its sincere gratitude to Bill for
his invaluable and constructive contribution to the Board over the
years.
Scott Lloyd resigned as Non-Executive Director during the period
to focus on his full-time responsibilities as Chief Executive of
the Lawn Tennis Association. The Board would like to thank Scott
for his contribution and counsel during his time with Goals.
Jackie Ronson joined the Group as Non-Executive Director on 12
June 2018. Jackie is currently the Digital, CRM & Insights
Director at EE, part of the BT Group plc. As a well-respected
business leader and digital specialist, she brings a wealth of
experience in consumer-facing industries to the Group, which will
be important as the Group seeks to significantly improve its
customer data and digital functions.
Current trading and Outlook
H2 trading has started well and despite the challenging H1,
Like-for-Like Sales (note 1) for the year to date are now positive.
Trading has normalised and has returned to its positive trend
following the anticipated slowdown during the World Cup,
demonstrating clearly that where major investments have been made
positive sales trends follow. We are therefore optimistic with
respect to the trading outlook for the remainder of the year.
Financial Review
Since the completion of the Joint Venture with CFG in July 2017,
the financial results of Goals Soccer Centers Inc have been
accounted for using the equity method of accounting. A number of
Underlying measures and Total System Sales have been included
within the Financial Review to give a like-for-like comparison.
Total Group Sales declined by 7.0% to GBP16.2m (2017: GBP17.4m)
with Underlying Like-for-Like Sales declining by 2.8% (2017: +1.6%)
to GBP16.2m due to the impact of the challenging weather conditions
in Q1 2018 and the knock-on impact in Q2 2018. Like-for-Like Sales
(note 1) excluding these weather-related events continued their
recent positive trend.
Underlying Group EBITDA (note 2) declined by 15.5% to GBP4.0m
(2017: GBP4.7m). This decline has been driven by the challenging
weather conditions and an increase in UK overheads of GBP0.25m
(2.4%) due to statutory increases in Living Wage and Business
Rates.
UK depreciation and amortisation increased by 9.3% to GBP1.8m
(2017: GBP1.6m) due to the increased level of capital expenditure
over the last 2 years.
The decline in Underlying Group EBITDA (note 2) and increase in
depreciation and amortisation resulted in a 28.6% decline in
Underlying Operating Profit (note 6) to GBP2.2m (2017:
GBP3.1m).
Financial expenses increased by 82.9% to GBP0.4m (2017: GBP0.2m)
due to the increase in libor and Underlying EBITDA bank interest
cover reduced to 18.5 times at 30 June 2018 (2017: 29.1 times). Net
debt at 30 June 2018 stood at GBP30.2m (2017: GBP28.6m) and current
leverage of Net Debt/EBITDA increased to 3.19 times (2017: 2.7
times) due to the decline in Underlying Group EBITDA (note 2). Our
lenders, Bank of Scotland, agreed to amend the Net Debt/EBITDA
covenant from 3.0x to 3.25x, to provide additional headroom in the
quarterly tests until September 2018, after which the covenant will
reduce back to 3.0x. The Group intends to reduce Net Debt/EBITDA
throughout H2 2018.
Profit before tax before exceptional items declined by 38.2% to
GBP1.6m (2017: GBP2.6m). Underlying Profit Before Tax (note 3)
reduced by 39.5% to GBP1.7m (2017: GBP2.9m).
The Group incurred total exceptional costs of GBP2.7m (2017:
nil). GBP2.2m of this was a non-cash asset impairment charge which
relates to the sale of a non-core centre to a football club for use
in a non-competing activity. It is envisaged that a significant
element of the customer base will transfer to a nearby club and
that the sale will result in an increase in profits. GBP0.5m was a
cash charge relating to restructuring costs.
Earnings per share declined to (1.7p) (2017: 2.7p). Underlying
earnings per share (note 4) declined by 38.7% to 1.9p (2017: 3.1p)
principally due to the decline in Underlying Profit Before Tax
(note 3) of 39.5%.
As working capital was managed tightly, Underlying free cash
flow (note 5) increased by 22.0% to GBP2.5m (2017: GBP2.0m). The
Group invested GBP1.8m (2017: GBP6.1m) in capital expenditure
during the period all of which was invested in upgrading our mature
centres. The Group invested GBP0.2m (2017: GBP0.2m) on software
development and call centre systems during the year.
The Group's balance sheet remains well capitalised with net
assets of GBP97.2m (2017: GBP93.0m). The Group has a long term
non-amortising bank facility with Bank of Scotland of GBP42.5m
which expires in July 2019. The directors plan to renew this
facility during Q1 2019.
Dividend
The Board does not plan to declare an interim dividend for the
period but does intend to recommence dividends when
appropriate.
Michael Bolingbroke
Chairman
12 September 2018
Notes: Underlying and Adjusted Performance Measures
Management has presented the following performance measures as
they are used throughout the Interim Results. Management believe
that presentation of the Group's results in this way gives a better
understanding of the Group's financial performance. This
presentation is consistent with the way that financial performance
is measured by management and reported to the Board and assists in
providing a meaningful analysis of the trading results of the
Group. This also facilitates comparison with prior periods to
assess trends in financial performance more readily.
The Group applies judgement in identifying significant
non-recurring items of income and expense that are recognised as
exceptional or non-recurring to help provide an indication of the
Group's underlying business. In determining whether an event or
transaction is exceptional in nature, management considers
quantitative as well as qualitative factors such as the frequency
or predictability of occurrence.
Exceptional and non-recurring items have been identified as:
- Impairment of a specific club which is to be sold and is
therefore considered to be exceptional and of a non-recurring
nature. Exceptional costs of this nature are permissible add backs
for the purposes of bank covenant calculation.
- Restructuring costs in relation to Board and SMT structure
changes are not considered to be recurring, in particular due to
the timeframe of this restructure relative to the last restructure
in 2016. Exceptional costs of this nature are permissible add backs
for the purposes of bank covenant calculation.
- Share based payments ("SBP") are added back for the purposes
of the underlying calculations as they are not considered to be
core business costs and are a permissible add back for the purposes
of bank covenant calculation.
The performance measures outlined below are not defined
performance measures in IFRS. A reconciliation from these
alternative performance measures to the nearest measure prepared in
accordance with IFRS is presented below. The Group's definition of
each performance measure may not be comparable with similarly
titled performance measures and disclosures by other entities.
Note 1: Sales
In July 2017, the Group entered into a joint arrangement with
City Football Group Limited ("CFG") for a new company ("Goals City
US Ltd") created and jointly controlled by Goals and CFG. The
previously wholly owned subsidiary Goals Soccer Centers Inc ("Goals
US") is now owned by Goals City US Limited ("Goals City US" or "the
JV") with both parties (CFG and Goals) having a 50% ownership
interest.
Given the change in Group structure, it is necessary to
introduce some alternative performance measures that allow a
greater degree of comparability between years. A Total System Sales
comparative has been included below. This comparative assumes no
change in ownership and includes sales of all clubs in the UK and
USA.
We have also included a calculation which shows LFL performance
on a total systems basis. Management and investors find this
information to be useful when reviewing the underlying performance
of the Group, especially Goals US performance. Clubs that have been
opened for less than 12 months are removed from the comparison
which allows a greater degree of comparability between years as
sales are generated by the same number of clubs.
A Like for like ("LFL") sales comparative has been calculated
which assumes the current ownership structure was in place in H1
2017, allowing a greater degree of comparability between years.
2018 2017
GBP000 GBP000
Total Sales 16,153 17,366
System Sales
Total Sales 16,153 17,366
Equity accounted investee (Jan - Jun 18) 1,042 -
Total System Sales 17,195 17,366
Clubs opened post 1 Jan 2017 (248) (114)
Clubs opened post 1 Jan 2018 (189) -
Like-for-like Total System Sales 16,758 17,252
Like-for-Like Sales
Total sales 16,153 17,366
Equity accounted investment (Jan - Jun 17) - (740)
Like-for-Like Sales 16,153 16,626
Underlying and Adjusted Performance Measures (continued)
Note 2: Underlying EBITDA
Underlying EBITDA is Earnings Before Interest, Tax, Depreciation
and Amortisation adjusted for the impact of the exceptional and
non-recurring costs and the effects of equity-settled share-based
payments as shown below. In addition, the previously wholly owned
subsidiary Goals Soccer Centers Inc is now owned by the JV with
both parties (CFG and Goals) having a 50% ownership interest.
Therefore 2017 comparatives have been adjusted to reflect the
current ownership structure.
EBITDA is a common measure used by investors and analysts to
evaluate the operating financial performance of companies. We
consider underlying EBITDA to be a useful measure of our operating
performance because it approximates the underlying operating cash
flow by eliminating depreciation and amortisation.
2018 2017
GBP000 GBP000
Operating (loss)/profit (553) 2,793
Depreciation 1,619 1,676
Amortisation 181 78
Share option costs 48 32
Start-up losses (Pomona, USA) - 220
Restructuring costs 461 -
Impairment of club 2,226 -
EBITDA of equity accounted investee (Jan -
Jun 17) - (84)
Underlying EBITDA 3,982 4,715
Note 3: Underlying Profit Before Tax
Underlying PBT is Profit Before Taxation adjusted for the impact
of the exceptional and non-recurring costs and the effects of
equity-settled share-based payments as shown below. In addition,
the previously wholly owned subsidiary Goals Soccer Centers Inc is
now owned by the JV with both parties (CFG and Goals) having a 50%
ownership interest. Therefore 2017 comparatives have been adjusted
to reflect the current ownership structure.
Underlying PBT is a common measure used by investors and
analysts to evaluate the operating financial performance of
companies. We consider underlying PBT to be a useful measure of our
profitability as it allows better analysis of the factors affecting
the year's results compared to the prior period.
2018 2017
GBP000 GBP000
(Loss)/Profit Before Tax (1,080) 2,600
Share option costs 48 32
Start-up losses (Pomona, USA) - 220
Start-up losses (Rancho, USA) 78 -
Restructuring costs 461 -
Impairment of club 2,226 -
PBT of equity accounted investee (Jan - Jun
17) - 13
Underlying Profit Before Tax 1,733 2,865
Underlying and Adjusted Performance Measures (continued)
Note 4: Underlying Earnings per Share
Underlying earnings per share is earnings per share adjusted for
the net of tax impact of the exceptional and non-recurring costs as
shown below.
Earnings per share is calculated by dividing the underlying
earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the year plus the
dilutive element of all outstanding relevant share options
outstanding during the year. For the period ended 30 June 2018 this
was 75,215,060 (2017: 75,215,060).
2018 2018 2017 2017
Underlying Underlying Underlying Underlying
Profit EPS Profit EPS
GBP000 p GBP000 p
Underlying Profit Before Tax 1,733 2,865
Tax impact of the exceptional
and non-recurring costs (292) (538)
PBT of equity accounted investee
(Jan - Jun 17) - 13
Underlying Profit After Tax 1,441 1.9 2,340 3.1
Note 5: Underlying Free Cash Flow
Underlying free cash flow is net cash flow from operating
activities adjusted for the cash impact of the exceptional and
non-recurring costs as shown below. The previously wholly owned
subsidiary Goals Soccer Centers Inc is now owned by the JV with
both parties (CFG and Goals) having a 50% ownership interest.
Therefore 2017 comparatives have been adjusted to reflect the
current ownership structure.
2018 2017
GBP000 GBP000
Net cash flow from operating activities 1,947 1,859
Start-up losses (Pomona, USA) - 220
Start-up losses (Rancho, USA) 78 -
Restructuring costs 461 -
EBITDA of equity accounted investee (Jan -
Jun 17) - (42)
Underlying Free Cash Flow 2,486 2,037
Note 6: Underlying Operating Profit
Underlying Operating Profit is Operating Profit adjusted for the
impact of the exceptional and non-recurring costs as shown below.
In addition, the previously wholly owned subsidiary Goals Soccer
Centers Inc is now owned by the JV with both parties (CFG and
Goals) having a 50% ownership interest. Therefore 2017 comparatives
have been adjusted to reflect the current ownership structure.
Underlying Operating Profit is a common measure used by
investors and analysts to evaluate the operating financial
performance of companies. We consider Underlying Operating Profit
to be a useful measure of our operating performance.
2018 2017
GBP000 GBP000
Operating (Loss)/Profit (553) 2,793
Share option costs 48 32
Start-up losses (Pomona, USA) - 220
Restructuring costs 461 -
Impairment of club 2,226 -
PBT of equity accounted investee (Jan - Jun
17) - 13
Underlying Operating Profit 2,182 3,058
Consolidated statement of comprehensive income
For the six months ended 30 June 2018
Before Exceptional Unaudited Unaudited Audited
exceptional items Total Total Year
items 6 months 6 months 6 months Ended
6 months Ended Ended Ended 31 December
Ended 30 30 June 30 June 30 June 2017
June 2018 2018 2017
Note 2018
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 16,153 - 16,153 17,366 33,058
Cost of sales (2,048) - (2,048) (2,109) (3,372)
Gross profit 14,105 - 14,105 15,257 29,686
Operating expenses 5/6 (11,971) (2,687) (14,658) (12,464) (23,661)
Operating (loss)/profit 2,134 (2,687) (553) 2,793 6,025
Financial expense (353) - (353) (193) (344)
Share of loss of equity-accounted
investees (174) (174) - (361)
Gain on sale of investment 6 - - - - 2,838
(Loss)/profit before
tax 1,607 (2,687) (1,080) 2,600 8,158
Taxation 3 (269) 88 (181) (581) (1,147)
(Loss)/profit for year
attributable to equity
holders of the parent 1,338 (2,599) (1,261) 2,019 7,011
============= =========== ========= ========= ============
Earnings per share 7
Basic (1.7p) 2.7p 9.3p
Consolidated statement of other comprehensive income
Unaudited Unaudited Audited
Total Total Year
6 months 6 months Ended
Ended 30 Ended 30 31 December
June June 2017
2018 2017 *As restated
GBP000 GBP000 GBP000
(Loss)/Profit for the year (1,261) 2,019 7,011
Items that will or may subsequently
be reclassified to profit or loss
Exchange differences on translation
of foreign operation - (699) 537
Other comprehensive income/(expense)for
the period - (699) 537
--------- ------- -------
Total comprehensive (loss)/income for
the period attributable to equity holders
of the parent (1,261) 1,320 7,548
========= ======= =======
*Restated to include recycling of translation differences on
disposal of foreign operations from other comprehensive income to
contributions by and distributions to owners
Consolidated statement of financial position
at 30 June 2018
Note Unaudited Unaudited Audited
30 June 30 June 31 December
2018 2017 2017
Assets GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 8 114,913 119,369 117,059
Intangible assets 9 5,493 5,247 5,503
Other non-current receivables 10 824 708 58
Investments in equity-accounted
joint ventures 11 11,885 - 11,810
Total non-current assets 133,115 125,324 134,430
Current assets
Inventories 1,563 1,761 1,830
Trade and other receivables 13 3,000 6,540 3,559
Cash and cash equivalents 2,320 2,128 2,606
Total current assets 6,883 10,429 7,995
Non-current asset held
for sale 15 500 - -
---------
7,383 10,429 7,995
Total assets 140,498 135,753 142,425
========= ========= ===================
Equity
Share capital 188 188 188
Share premium 53,208 53,208 53,208
Retained earnings 43,795 40,004 45,013
Translation reserve - (375) -
Total equity 97,191 93,025 98,409
Liabilities
Non-current liabilities
Interest-bearing loans
and borrowings 30,553 28,842 30,410
Deferred tax liabilities 12 8,019 7,657 8,026
Total non-current liabilities 38,572 36,499 38,436
Current liabilities
Bank overdraft 1,942 1,910 1,955
Trade and other payables 14 2,366 3,729 2,979
Current tax payable 427 590 646
Total current liabilities 4,735 6,229 5,580
Total liabilities 43,307 42,728 44,016
Total equity and liabilities 140,498 135,753 142,425
========= ========= ===================
Consolidated statement of cash flows
For the six months ended 30 June 2018
Note Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended 31
30 June 30 June December
2018 2017 2017
GBP000 GBP000 GBP000
Cashflows from operating activities
(Loss)/Profit for the period (1,261) 2,019 7,011
Adjustments for:
Depreciation 8 1,619 1,676 3,300
Amortisation 9 181 78 262
Gain on sale of subsidiary - - (2,838)
Loss on disposal of pitches - - 172
Share of loss of equity-accounted
investee 174 - 361
Impairment of non-current asset
held for sale 15 2,226 - -
Financial expenses 353 193 344
Income tax charge 181 581 1,147
Equity settled share based payment
transactions 48 28 -
3,521 4,575 9,759
(Increase)/decrease in trade
and other receivables (207) (391) 393
Decrease/(increase) in inventory 267 (319) (397)
(Decrease)/increase in trade
and other payables (1,234) (1,581) (2,963)
2,347 2,284 6,792
Income tax paid (400) (425) (616)
Net cash from operating activities 1,947 1,859 6,176
--------- --------- ---------
Cashflows from investing activities
Acquisition of property, plant
and equipment 8 (1,839) (6,129) (10,808)
Software development 9 (171) (166) (760)
Disposal of subsidiary - - (80)
Net cash used in investing activities (2,010) (6,295) (11,648)
--------- --------- ---------
Cashflows from financing activities
Share related costs - - 50
Proceeds from bank borrowings 17 2,538 6,744 9,865
Repayment of bank borrowings 17 (2,395) (1,900) (3,453)
Interest paid (353) (193) (344)
Net cash (used in)/from financing
activities (210) 4,651 6,118
--------- --------- ---------
Net (decrease)/increase in cash
and cash equivalents (273) 213 646
Cash and cash equivalents at
start of period 651 5 5
Cash and cash equivalents at
end of period 378 218 651
========= ========= =========
Consolidated statement of changes in equity
for the six months ended 30 June 2018
Share Share Retained Translation Total
capital premium earnings reserve
account
GBP000 GBP000 GBP000 GBP000 GBP000
Group
At 1 January 2018 (audited) 188 53,208 45,013 - 98,409
Comprehensive income for
the period
Loss for the year attributable
to owners of the parent - - (1,261) - (1,261)
Exchange difference on translation - - - - -
of foreign operation
Other comprehensive income - - - - -
Total comprehensive income
for the period - - (1,261) - (1,261)
Contributions by and distributions
to owners
Share based payments - - 48 - 48
Deferred tax on share based
payments - - (5) - (5)
Total transactions with owners - - 43 - 43
At 30 June 2018 (unaudited) 188 53,208 43,795 - 97,191
Group
At 1 January 2017 (audited) 188 53,208 37,957 324 91,677
Comprehensive income for
the period
Profit for the year attributable
to owners of the parent - - 2,019 - 2,019
Exchange difference on translation
of foreign operation - - - (699) (699)
Other comprehensive income - - - - -
Total comprehensive income
for the period - - 2,019 (699) 1,320
Contributions by and distributions
to owners
Share based payments - - 32 - 32
Deferred tax on share based
payments - - (4) - (4)
Total transactions with
owners - - 28 - 28
At 30 June 2017 (unaudited) 188 53,208 40,004 (375) 93,025
Consolidated statement of changes in equity
for the six months ended 30 June 2018 (continued)
Share Share Retained Translation Total
capital premium earnings reserve
account *As restated
GBP000 GBP000 GBP000 GBP000 GBP000
Group
At 1 January 2017 (audited) 188 53,208 37,957 324 91,677
Comprehensive income for
the period
Profit for the year attributable
to owners of the parent - - 7,011 - 7,011
Exchange difference on translation
of foreign operation - - - 537 537
Total comprehensive income
for the period - - 7,011 537 7,548
Contributions by and distributions
to owners
Recycling of translation
differences on disposal
of foreign operation - - - (861) (861)
Share based payments - - 50 - 50
Deferred tax on share based
payments - - (5) - (5)
Total transactions with
owners - - 45 (861) (816)
At 31 December 2017 (audited) 188 53,208 45,013 - 98,409
*Restated to include recycling of translation differences on
disposal of foreign operations from other comprehensive income to
contributions by and distributions to owners
Notes to the Unaudited Interim Results
Goals Soccer Centres plc (the "Company") is a company domiciled
in the United Kingdom.
1. Significant accounting policies
Basis of preparation
The financial information in this interim report comprises the
Consolidated Statement of Profit or Loss and Other Comprehensive
Income, the Consolidated Statement of Other Comprehensive Income,
the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of
Cashflows and accompanying notes. The financial information in this
interim report has been prepared under the recognition and
measurement requirements of IFRSs as adopted for use in the
European Union but does not include all of the disclosures that
would be required under those accounting standards. The Company has
elected not to prepare the interim report in accordance with IAS 34
as adopted by the EU. The accounting policies adopted in the
financial information are consistent with those expected to be
adopted in the Company and Group's financial statements for the
year ended 31 December 2018. The accounting policies are unchanged
from those used in the Company and Group's financial statements for
the year ended 31 December 2017, except for those that relate to
new standards and interpretations effective for the first time for
periods beginning on (or after) 1 January 2018 and that will be
adopted in the annual financial statements for the year ended 31
December 2018.
The financial information in this interim report for the six
months to 30 June 2018 and to 30 June 2017 has not been audited,
but it has been reviewed by the Company and Group's auditor, whose
report is set out on page 31. Any comparative figures for the year
ended 31 December 2017 are extracted from the Group's audited
financial statements for that period as filed with the Registrar of
Companies. The financial information for the year ended 31 December
2017 does not constitute the Company and Group's financial
statements for that period but is derived from them.
The Company and Group's statutory financial statements for the
year ended 31 December 2017 have been filed with 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 an emphasis without qualifying their report,
and (iii) did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006.
New standards impacting the Group that will be adopted in the
annual financial statements for the year ended 31 December 2018,
and which have given rise to changes in the Group's accounting
policies are:
- IFRS 9 Financial Instruments; and
- IFRS 15 Revenue from Contracts with Customers
Details of the impact these two standards have had are given
below.
IFRS 9 Financial instruments
The standard simplifies the classification, recognition and
measurement requirements for financial assets, financial
liabilities and some contracts to buy or sell non-financial items,
replacing IAS 39 Financial Instruments: Recognition and
Measurement. The introduction of this new standard has not resulted
in any change in accounting policies or had an impact on the
results for the period ended 30 June 2018.
Classification - financial assets
IFRS 9 contains a new classification and measurement approach
for financial assets that reflects the business model in which
assets are managed and their cash flows characteristics.
Implementing this standard has not had a material impact on the
accounting for trade receivables and loans.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
Impairment - financial assets and contract assets
IFRS 9 replaces the 'incurred loss' model in IAS 39 with a
forward looking 'expected credit loss' (ECL) model. This will
require considerable judgement about how changes in economic
factors affects ECLs, which will be determined on a
probability-weighted basis.
Under IFRS 9, loss allowances are measured on either of the
following bases:
- 12-month ECLs: these are ECLs that return from possible
default events within the 12 months after the reporting dates:
and
- Lifetime ECLs: these are ECLs that result from all possible
default events over the expected life of a financial
instrument.
Lifetime ECL measurement applies if the credit risk of a
financial asset at the reporting date has increased significantly
since initial recognition and 12-month ECL measurement applies if
it has not.
Group cash and cash equivalents are held with banks which are
rated "A" based on Standard & Poor's ratings. The Group
considers that cash and cash equivalents have a low credit risk
based on the external credit ratings of the counterparties.
Given that the Group has a good history of cash collection from
debtors, bad debts have not been material and cash is held with "A"
rated banks, impairment losses have not increased significantly
since the adoption of this standard.
Classification - financial liabilities
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification of financial liabilities. However, under IAS 39
all fair value changes of liabilities designates as fair value
through profit and loss ("FVTPL") are recognised in profit or loss,
whereas under IFRS 9 these fair value changes are generally
presented as follows:
- The amount of change in the fair value that is attributable to
changes in the credit risk of the liability is presented in other
comprehensive income ("OCI"); and
- The remaining amount of change in the fair value is presented in profit or loss.
The Group has not designated any financial liabilities at FVTPL
and it has no current intention to do so.
IFRS 15 Revenue from Contracts with Customers
The standard specifies whether, how much and when revenue is
recognised, using a principles based five-step model, replacing IAS
18 Revenue and IAS 11 Construction Contracts as well as various
Interpretations previously issued by the IFRS Interpretations
Committee. The Group has adopted the standard on a fully
retrospective basis. The introduction of this new standard has not
resulted in any change in accounting policies or had an impact on
the results for the period ended 30 June 2018.
Sale of goods
The Group generates revenue from the sale of a number of goods
off the back of customers utilising the Group's next generation
football facilities. Secondary revenue lines include: hot and cold
snacks; 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, in line with
IFRS 15 which stipulates that revenue will be recognised when a
customer obtains control of the goods.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
Rendering of services
The primary revenue stream of the Group is the utilisation of
the football facilities including: 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. The introduction of
IFRS 15 has had no significant impact on the recognition of revenue
generated by the rendering of services.
Other income
The Group recognises revenue in respect of goods and services
received under sponsorship and partnership agreements based on
amounts invoiced in line with the terms of the contract. Revenue is
recognised at the point of invoice as this signifies the completion
of the performance obligations of the contract. The introduction of
IFRS 15 has had no significant impact on the recognition of revenue
generated by the sponsorship and partnership agreements in place
during the period ended 30 June 2018.
Other standards
The following new standards, amendments and interpretations are
effective for the first time in these interim statements but none
have had a material effect on the Group and so have not been
discussed in detail:
- Annual Improvements to IFRS 2014-2016 Cycle - Amendments to IFRS 1 and IAS 28
- Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS2)
- Transfers of Investment Property (Amendments to IAS 40)
- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
- IFRIC 22 Foreign Currency Transactions and Advance Consideration
- IFRIC 23 Uncertainty over Income Tax Treatments
- Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
New standards applicable for future period
IFRS 16 Leases
The Group is required to adopt IFRS 16 Leases from 1 January
2019. IFRS 16 introduces a single, on-balance sheet lease
accounting model for lessees effective for the Group's year ending
31 December 2019. A lessee recognises a right-of-use asset
representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments. There
are recognition exemptions for short-term leases and leases of
low-value items which are not applicable to the Group. In addition,
the standard introduces a depreciation charge for right-of-use
assets and interest expense on lease liabilities.
Based on the initial assessment, the application of IFRS 16 is
expected to have a significant effect on the financial statements,
increasing the Group's recognised assets and liabilities and
materially increasing Group operating profit whilst reducing Group
Profit Before Tax. However the actual impact of applying IFRS 16 on
the financial statements in the period of initial application will
depend on future economic conditions, including the Group's
borrowing rate at 1 January 2019 and the composition of the Group's
lease portfolio at that date.
The Group can either apply the standard using a retrospective
approach or a modified retrospective approach with optional
practical expedients. The Group will apply the election
consistently to all of its leases. The initial assessment completed
has used a modified retrospective approach and it is likely that
this will be approach adopted by the Group.
Other new standards
A number of new standards, amendments to standards and
interpretations are not yet effective for period ended 30 June 2018
or 31 December 2018 and have not been applied in preparing these
interim results.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
Going concern
The Group and Company meet their overall funding requirements
through the capital market and their banking facility arrangements.
The Group has a long term non-amortising bank facility with Bank of
Scotland of GBP42.5m which expires in July 2019. Discussions have
commenced with regards to renewing the facility.
During the period, Goals agreed with its lenders to amend its
Net Debt/EBITDA covenant from 3.0x to 3.25x, to provide additional
headroom in the quarterly tests in June and September 2018, after
which the covenant will reduce back to 3.0x. This will allow the
continuation of the arena and clubhouse modernisation projects into
H2 2018.
Following a challenging first half of the year, as a result of
inclement weather and its knock on effects, the directors have
reassessed the company's funding position and requirements in light
of the strategic capital investment programme in its estate, with
reference to future trading projections and the terms and covenants
of the borrowing facilities. The directors are confident that the
company will operate within the terms and covenants of the existing
facilities and will renew those facilities when their current term
expires in July 2019. Accordingly, the directors consider it
appropriate to continue to adopt the going concern basis of
accounting in preparing these interim results.
Basis of consolidation
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable. The acquisition date
is the date on which control is transferred to the acquirer. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases.
Loss of control
When the Group loses control over a subsidiary, it derecognises
the assets and liabilities of the subsidiary, and any other
components of equity. Any resulting gain or loss is recognised in
profit and loss. Any interest retained in the former subsidiary is
measured at fair value when control is lost.
In July 2017, Goals entered into a strategic 50:50 Joint Venture
with CFG, the global football group which owns a number of leading
football clubs including Manchester City and New York City, to
accelerate the growth of the Goals brand in North America. A
separate entity, Goals City US Limited has been created as the
Joint Venture vehicle. Goals Soccer Centers Inc, the previously
wholly owned subsidiary, was disposed of by the Group at 31 July
2017, with share ownership transferring to Goals City US Limited.
The transaction and associated costs resulted in a gain on sale of
GBP2.8m, in the year to 31 December 2107, which was treated as
exceptional.
Goals considered the different accounting policy choices
available in respect of such transactions and has applied IFRS10 in
accounting for the gain on disposal of the subsidiary.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
Basis of consolidation (continued)
Interest in equity-accounted investees
The Group's interests in equity-accounted investees comprises of
interest in a joint venture. A joint venture is an arrangement in
which the Group has joint control, whereby the Group has rights to
the net assets of the arrangement, rather than rights to its assets
and obligations for its liabilities.
Interest in the joint venture is accounted for using the equity
method. It is initially recognised at cost, which includes
transaction costs. Subsequent to initial recognition, the
consolidated financial statements include the Group's share of the
profit or loss and OCI of equity-accounted investee, until the date
on which joint control ceases.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted
investees are eliminated against the investment to the extent of
the Group's interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
Revenue
Revenue represents the value of goods and services supplied to
customers (net of applicable 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: hot and cold snacks; 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 agreements based on
amounts invoiced in line with the terms of the contract. Revenue is
recognised at the point of invoice as this signifies the completion
of the performance obligations of the contract.
Business segments
The Group operates primarily in the UK and its only trading
activity is the operation of soccer centres.
Exceptional items
Items which are material either because of their size or their
nature, and which are non-recurring, are presented within their
relevant consolidated income statement category, but highlighted
through separate disclosure. The separate reporting of exceptional
items helps provide a better picture of the Group's underlying
performance. Items which are included within the exceptional
category include:
- Costs associated with major restructuring programmes;
- Significant impairment charges in relation to goodwill, intangible or tangible assets;
- Other particularly significant or unusual items.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
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 statement of
profit or loss 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 impairment losses.
Software development costs comprise of third party consultancy
costs incurred in acquiring, bringing to use and developing the
functionality of the Group's internal ERP system. Impairment
testing is performed where an indication of impairment arises.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
Amortisation
Amortisation is charged to the statement of profit and loss 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 statement of profit and loss on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Previous experience with
regards to the wear and tear of pitches has been taken into
consideration when deciding their estimated useful lives. For other
assets, physical deterioration due to the passage of time and
assets becoming obsolete due to changes in technology have been
considered. The estimated useful lives are as follows:
Freehold and leasehold - 75 years or lease period if shorter
buildings
Fixtures and fittings:
- shock pads - 30 years
- 11-a-side pitches 20 years
- 5 and 7-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.
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.
Notes to the Unaudited Interim Results
1. Significant accounting policies (continued)
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.
Non-current receivables
Non-current receivables are amounts recognised under the VAT
Capital Goods Scheme on capital expenditure incurred by the Group
in line with its taxable use over a period of time.
AIM Rule 26
From 28 September 2018, all AIM companies must adopt a
recognised code of corporate governance. The Board have concluded
that the QCA Corporate Governance Code (2018) ("QCA") is the most
appropriate code for the Group to follow. The Board have considered
the principles set out in the QCA, in conjunction with the existing
governance framework of the Group and are satisfied that the
company's governance structures and practices align with the
expectations set by the QCA Code.
2. Segmental reporting
IFRS 8 'Operating Segments' requires a "management approach"
under which segment information is presented on the same basis as
that used for internal reporting purposes to the Chief Operating
Decision Maker, which is the Board. As each club has similar
economic characteristics, provides the same services to similar
customers and operates in a similar manner, the directors,
therefore, consider that there is one reporting segment relating to
the operation of outdoor soccer centres which includes the three
(2017: two) clubs outside of the UK owned by the Joint Venture.
3. Tax
Corporation tax for the interim period is charged at 19% (June
2017: 19.5%), representing the estimated effective tax rate for the
full financial year.
A reduction in the UK corporation tax rate from 21% to 20%
(effective from 1 April 2015) was 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, and an additional reduction to 17% (effective 1 April
2020) was substantively enacted on 6 September 2016. This will
reduce the company's future current tax charge accordingly. The
deferred tax liability at 30 June 2018 has been calculated based on
these rates.
Notes to the Unaudited Interim Results
4. Dividends
No interim dividend is proposed for the period ended 30 June
2018 (2017: GBPnil).
5. Exceptional items - operating expenses
6 months 6 months (Audited)
ended ended Year
30 June 30 June ended
2018 2017 31 December
2017
GBP000 GBP000 GBP000
Exceptional items comprise:
* Impairment of club 2,226 - -
- Restructuring costs 461 - -
2,687 - -
In June 2018, Goals agreed Heads of Terms to dispose of a
non-core club to a professional football club for use in a
non-competing activity. It is envisaged that a significant element
of the existing customer base will transfer to a nearby club and
that the sale will result in an increase in profits. The
transaction values the club at GBP0.5m. The fair value less cost of
disposal is therefore GBP0.5m, resulting in an impairment loss of
GBP2.2m. Goals will continue to operate the club until May
2019.
In 2018, GBP0.5m of Board and Senior Management Team
restructuring costs were incurred.
6. Exceptional items - other
6 months 6 months (Audited)
ended ended Year
30 June 30 June ended
2018 2017 31 December
2017
GBP000 GBP000 GBP000
Exceptional items comprise:
* Gain on sale of Goals Soccer Centers Inc - - (2,838)
- - (2,838)
In July 2017, Goals entered into a strategic 50:50 Joint Venture
with CFG, the global football Group which owns a number of leading
football clubs including Manchester City and New York City, to
accelerate the growth of the Goals brand in North America. A
separate entity, Goals City US Limited has been created as the
Joint Venture vehicle. Goals Soccer Centers Inc, the previously
wholly owned subsidiary, has been disposed of by the Group with
share ownership transferring to Goals City US Limited. The
transaction and associated costs has resulted in a gain on sale of
GBP2.8m which has been treated as exceptional.
Notes to the Unaudited Interim Results
7. Earnings per share
Basic and diluted earnings per share
Unaudited Unaudited (Audited)
Total 6 months Total 6 Year
ended 30 months ended
June ended 30 31 December
2018 June 2017
2017 *As restated
*As restated
(Loss)/Profit for the financial
period (GBP'000) (1,261) 2,019 7,011
________ _________ _________
Weighted average number of
shares 75,215,060 75,215,060 75,215,060
Dilutive share options - - -
________ _________ _________
75,215,060 75,215,060 75,215,060
Basic earnings per share (1.7p) 2.7p 9.3p
Diluted earnings per share (1.7p) 2.7p 9.3p
Diluted earnings per share is calculated by dividing the
earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the year plus the
dilutive element of all outstanding relevant share options
outstanding during the year.
At each respective period end, the options are not in the money,
therefore there is no dilutive element.
*Restated to include recycling of translation differences on
disposal of foreign operations from other comprehensive income to
contributions by and distributions to owners
Notes to the Unaudited Interim Results
8. Property, plant and equipment
Land and Fixtures Assets in Total
buildings and fittings course of
construction
GBP000 GBP000 GBP000 GBP000
Cost
At beginning of period (Audited) 132,719 20,282 3,449 156,450
Additions 56 1,712 431 2,199
Transfers (assets under construction) - 681 (681) -
Transfers (held for sale
asset) (3,070) (427) - (3,497)
At end of period (Unaudited) 129,705 22,248 3,199 155,152
Depreciation and impairment
At beginning of period 29,408 7,933 2,050 39,391
Charge for period 1,006 613 - 1,619
Transfers (held for sale
asset) (428) (343) - (771)
At end of period (Unaudited) 29,986 8,203 2,050 40,239
Net book value
At 30 June 2018 (Unaudited) 99,719 14,045 1,149 114,913
At 31 December 2017 (Audited) 103,311 12,349 1,399 117,059
Assets in the course of construction comprise the cost of redevelopment
of current sites, in particular, costs associated with the ongoing
arena and clubhouse modernisation projects.
9. Intangible assets
Goodwill Software Total
development
GBP000 GBP000 GBP000
Cost
At beginning of period (Audited) 5,719 5,420 11,139
Additions - 171 171
At end of period (Unaudited) 5,719 5,591 11,310
Amortisation and impairment
At beginning of period (Audited) 3,100 2,536 5,636
Charge for period - 181 181
At end of period (Unaudited) 3,100 2,717 5,817
Net book value
At 30 June 2018 (Unaudited) 2,619 2,874 5,493
At 31 December 2017 (Audited) 2,619 2,884 5,503
Notes to the Unaudited Interim Results
10. Other non-current receivables
Unaudited Unaudited (Audited)
Total 6 months Total 6 Year
ended 30 months ended
June ended 31 December
2018 30 June 2017
2017
GBP000 GBP000 GBP000
Capital Goods Scheme 824 708 58
11. Equity-accounted investment
Unaudited Unaudited (Audited)
Total 6 months Total 6 Year
ended 30 months ended
June ended 31 December
2018 30 June 2017
2017
GBP000 GBP000 GBP000
Current
Interest in Joint Venture 11,885 - 11,810
On 25 July 2017, the Group entered into a joint arrangement with
City Football Group Limited ("CFG") to accelerate the growth of the
Goals brand in North America.
A new company - Goals City US Ltd - was created and is jointly
controlled by Goals and CFG with both parties having a 50%
ownership interest. The board has six members, three each from
Goals and CFG. The Chairman has no casting vote.
Given that the arrangement is structured through a separate
vehicle, the contractual agreement is such that both parties'
liability is limited to their shareholding and the arrangement is
not reliant on either party to generate revenue. The arrangement
has been accounted for as a joint venture and has been consolidated
on an equity-accounted basis.
Notes to the Unaudited Interim Results
12. Deferred tax liability
Deferred tax assets and liabilities are attributable to the
following:
Unaudited Unaudited (Audited)
Total 6 months Total 6 months Year
ended 30 ended 30 ended
June June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
Property, plant and equipment (8,035) (7,680) (8,048)
Share based payments (7) - (1)
Other temporary differences 23 23 23
Net deferred tax liabilities (8,019) (7,657) (8,026)
13. Trade and other receivables
Unaudited Unaudited (Audited)
Total 6 months Total 6 months Year
ended 30 ended 30 ended
June June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
Trade receivables 1,078 1,069 1,409
Prepayments and accrued income 1,410 3,153 1,552
Other receivables 512 2,318 598
3,000 6,540 3,559
14. Trade and other payables
Unaudited Unaudited (Audited)
Total 6 months Total 6 months Year
ended 30 ended 30 ended
June June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
Trade payables 1,973 2,791 2,120
Taxation and social security 190 3 35
Other payables 91 203 253
Accruals and deferred income 112 732 571
2,366 3,729 2,979
15. Disposal group held for sale
In June 2018, Goals agreed Heads of Terms to dispose of a
non-core club to a professional football club for use in a
non-competing activity. The disposal is in relation to the PP&E
of the club, no other assets or liabilities will be disposed of at
this time. It is envisaged that a significant element of the
existing customer base of this club will transfer to a nearby club
and that the sale will result in an increase in profits. Goals will
continue to operate the club until May 2019 at which point all
other assets and liabilities attributable to the club will be
disposed of. The club PP&E is therefore classified as held for
sale as at 30 June 2018, with the PP&E of the club impaired to
reflect the fair value less cost of disposal.
Unaudited
Total 6
months
ended
30 June
2018
GBP000
Fair value less cost of disposal 500
Net assets to be disposed of
Property, plant and equipment 2,726
Impairment of PP&E 2,226
Notes to the Unaudited Interim Results
16. Related Party Transactions
Amounts owed by related parties
30 June 2018 30 June 2017 31 December
2017
GBP000 GBP000 GBP000
Goals Soccer Centers Inc 31 6,026 -
Goals City US Ltd 5 - -
Following the completion of the joint venture with CFG in July
2017, any amounts owed by Goals Soccer Centers Inc were
capitalised.
17. Notes supporting statement of cash flows
Cash and cash equivalents for purposes of the statement of cash
flows comprises:
Unaudited Unaudited Total (Audited)
Total 6 months 6 months Year
ended 30 ended 30 June ended
June 2017 31 December
2018 2017
GBP000 GBP000 GBP000
Cash at bank and in hand 2,320 2,128 2,606
Overdraft (1,942) (1,910) (1,955)
_______ ________ ________
Cash and cash equivalents 378 218 651
Non-cash transactions from financing activities are shown in the
reconciliation of liabilities from financing transactions
below:
Loans and
Borrowings
GBP000
At 1 January 2018 30,410
Cash Flows
Proceeds from bank borrowings 2,528
Repayments from bank borrowings (2,395)
Non-cash Flows
Amortisation of finance costs 10
________
At 30 June 2018 30,553
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 interim results for the six months
ended 30 June 2018 which comprise the consolidated statement of
comprehensive income, the consolidated statement of other
comprehensive income, the consolidated statement of financial
position, the consolidated statement of cash flows, the
consolidated statement of changes in equity and the related
notes.
We have read the other information contained in the interim
results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim results, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim results in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the interim results be presented and prepared in a form consistent
with that which will be adopted in the company's annual financial
statements having regard to the accounting standards applicable to
such annual financial statements.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the interim results
based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability.
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 Financial Reporting Council for use
in the United Kingdom. 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 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 interim results for the six months ended 30 June 2018 is not
prepared, in all material respects, in accordance with the rules of
the London Stock Exchange for companies trading securities on
AIM.
BDO LLP
Chartered Accountants
Glasgow, UK
12 September 2018
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FFLLFVKFFBBE
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