Five-a-side firm Goals draws bid interest

Goals confirmed on Monday it had received a preliminary approach from the Ontario Teachers’ Pension Plan, which owns National Lottery operator Camelot, sending shares soaring nearly 25 per cent at one stage.

The pension fund is thought to be interested in the potential for expanding Goals internationally. At present, the chain has 42 sites in the UK and a sole overseas base in Los Angeles.

While the fund said that the approach – made by its investment arm, Teachers’ Private Capital – may or may not result in a bid, analysts said that the move should prompt private equity firms to run the rule over Goals.

Nick Batram, an analyst at Peel Hunt, said a bid of 158p a share – valuing the company at about £75 million – would be a “realistic benchmark”.

He said the figure represented a multiple of eight-times Goals profits, the same level at which Paisley-based rival Powerleague was taken private in 2009 by Patron Capital. Batram added: “It does not come as a complete surprise that Goals has received an approach. We are believers in the model and can see the attraction to private equity.

“With a patchy recent track record of delivery independent shareholders could be tempted by a reasonable offer.”

Sahill Shan, an analyst at N+1 Brewin, said that, while the comparison with Powerleague was a good starting point in valuing Goals, the two businesses do have differences.

“Goals is a relatively stronger business, well invested, highly-cash generative and has a nascent international angle,” Shan said.

“Given the lacklustre share price performance over recent years and the obvious frustration on the part of both management and shareholders, this approach is not a huge surprise. Goals is a fundamentally-sound business, which has demonstrated earnings resilience in its core activity of football.

“Whilst it is difficult to ignore three years of flat profitability, one has to recognise that external factors – such as snow and a VAT hit – have conspired against the business.”

Ontario Teachers’ Pension Plan has more than $107 billion (£67bn) in assets and administers the pensions of 300,000 active and retired teachers.

The pension fund has investments worth more than £2bn in the UK, with £180m managed via Teachers’ Private Capital.

Until recently, the fund owned Maple Leaf Sports & Entertainment, which runs four sports clubs: the Toronto Raptors basketball team; Toronto football club; and both the Toronto Marlies and the Toronto Maple Leafs ice hockey teams.

Goals experienced softer-than-expected trading last summer, but a marketing campaign under the “Get Back in the Game” banner resulted in a turnaround in fortunes over the remainder of last year. Across 2011, Goals posted a 1 per cent rise in like-for-like sales, while underlying profits increased by 11 per cent to £13.8m.

A typical Goals centre has between nine and 14 floodlit pitches made from artificial grass, which is designed to look and feel like real turf, parking for about 100 cars and a licensed bar. Around three-quarters of its revenues came from football bookings during 2011.

It has added ten centres to its estate in the past two years, but has kicked openings into touch while it focuses on improving performance and tackling an appeal against the taxman’s change to VAT for block bookings.

If Goals was to succumb to a takeover bid, then it would be the latest in a string of Scottish listed firms to be taken private.

Medical testing kit maker Axis-Shield, harbour operator Forth Ports, drugs developer ProStrakan and milk producer Robert Wiseman Dairies have all left the stock market in the past year, with only gas meter suppliers Energy Assets and Smart Metering Systems floating.