Goals Soccer Centres, the five-a-side football pitch operator, saw its shares lose almost a fifth of their value after tough trading in the first half prompted it to lower its earnings forecast.
The East Kilbride-based firm, which has 46 sites across the UK, also said chief executive Keith Rogers would be spending more time in the US, where it has a fast-growing Los Angeles centre.
LA has become the best-performing centre in our portfolioKeith Rogers
Interim results showed that sales in the six months to 30 June came in at £17.1 million, unchanged from a year ago, although underlying pre-tax profits edged up 1 per cent to £4.5m.
First-half sales in the UK fell 1 per cent to £16.4m, and Goals said trading in recent months was “challenging”, with like-for-like takings over the summer holidays sliding by 10 per cent.
Rogers told The Scotsman that the firm tends to face a downturn during the summer months, but this year saw an even greater decline in activity as players took advantage of the strong pound to jet off to sunnier climes and escape the UK’s poor weather.
Following the summer lull, Goals kicked off a marketing campaign this month to generate additional footfall, and while Rogers said it was too early to tell how the push will fare, like-for-like sales have turned positive again.
He said: “We haven’t yet got the benefit of seeing how much business will bounce back after the summer, and because of that we have to take a very cautious and prudent approach.”
As a result, Aim-quoted Goals expects to deliver a pre-tax profit of between £9.3m and £9.8m for the full year, below the City consensus of £10.9m. Shares ended the session down 35p at 160p – a decline of 18 per cent.
Analysts at N+1 Singer said the results “raise fresh concerns about UK growth prospects and have put further pressure on the investment case and the management”.
Edison Investment Research analyst Paul Hickman, said: “On the bright side, the US site in LA has posted sales up 22 per cent [to £600,000].
“With four sites now in legals or planning, the territory is strategically important to the future of the company.”
Rogers said the new centres will be larger than its existing LA base, which has 11 pitches, and the group is focusing its expansion plans on southern California, where football has been the most popular team sport in schools for the past ten years. He added: “LA has become the best-performing centre in our portfolio, and that gives us absolute confidence that what we’re doing in the US is the right thing. It’s a fantastic opportunity that we shouldn’t miss out on.”
To oversee Goals’ growth ambitions, Rogers said he would be spending a “significant” amount of his time on the other side of the Atlantic from next year, and the firm is in the process of recruiting a UK managing director.
The company has a presence in every major UK city, having opened a centre in Manchester in February and Doncaster in April, and Rogers said that another site will launch next year, although he declined to reveal its location.
In a bid to reduce the number of cancelled matches when players drop out, Goals has launched a mobile app that lets users send out “blasts” to help find replacements. More than 5,000 have been sent so far this year, resulting in 4,500 games going ahead that would otherwise have been called off.
Chairman Keith Edelman, the former Arsenal managing director, said: “While the year to date has been disappointing from a trading perspective, there has been considerable progress made across the business. US progress is accelerating and given the scale of the market we believe there is a significant opportunity.”
Shareholders will receive an interim dividend of 0.675p a share on 4 December, unchanged from last time.