SHARES in East Kilbride-based Goals Soccer Centres leapt by more than five per cent after the 5-a-side football operator confirmed it was exploring a merger with Powerleague.

Goals, which returned to profit while recasting its board in 2016, noted that preliminary talks have taken place with its Paisley-based counterpart in a statement to the stock market. However it said the talks were “but one of the strategic opportunities currently being assessed by the Goals board”.

Goals noted that at this stage “no commercial or financial terms have been agreed and no decision on any course of action has been made by the board.”

The company added: “There is therefore no certainty that any transaction will proceed.”

Powerleague, which Patron Capital Partners de-listed from the stock market after acquiring outright control of the business in 2009, declined to comment.

Confirmation of the potential merger comes as commercial sports venue providers face increasing competition from publicly-owned facilities. Investment in local authority facilities has increased in recent years as part of wider efforts to boost participation in sport. Many such facilities have been boosted by lottery funding.

A deal between Goals and Powerleague would create a 5-a-side football pitch operator with about 100 centres. Most of the centres are based in the UK, although Goals is on track to open its third outlet in California, having completed work on its second site in the US in February.

PowerLeague, which was established in Paisley in 1997, has about 50 outlets. The bulk of its sites, are based around the UK, although it also has centres in Amsterdam and Dublin.

While predominantly used for football, Powerleague has been taking steps to widen the usage of its facilities. Its 750 pitches are also used for sports such as netball and basketball, with centres also having general fitness classes. Trampolines have been added to some of its sites.

Sahill Shan, analyst at N+1 Singer, said that while the deal makes “huge sense”, it could fall foul of competition law.

He said: “Strategically and financially a tie-up would make huge sense given how competitive the five-a-side football sector has become with the resurgence of the local authority sector.

“The main risk we envisage is whether any tie-up would trigger any competition issues and how these might be addressed.”

Goals reported last month that it returned to the black in 2016, recording a profit of £3.7 million after a £6.2m loss the year before.

The period saw the company put a new board in place, with former Grosvenor Casinos’ managing director Mark Jones coming in as chief executive.

Goals, which raised £16.75m in a share placing last year, appointed former Inter Milan chief executive Michael Bolingbroke to its board as a non-executive director, alongside Scott Lloyd and Christopher Mills.

Nick Basing moved to the post of non-executive chairman in December, having led the drive to revamp the board and the fundraiser in an executive capacity in the preceding year. Mr Basing succeed Keith Edelman, a former managing director as Arsenal Football Club, as chairman.

Keith Rogers, its former chief executive who was latterly spearheading Goals’ drive in the US, left the company after a 30-year association in January.

In its most recent accounts, Powerleague reported a loss of £6.6m after exceptional costs of £4.5 in the year ended January 2.

Shares in Goals closed up 5.5p, or 5.39 per cent, at 107.5p.

Meanwhile, Mr Rogers was Goals’ highest-paid director last year, according to the company’s latest annual report.

Mr Rogers, who resigned from the board on January 15, received total emoluments of £297,000 in 2016, including a basic salary of £200,000. Mr Jones, who was appointed on July 1, was paid a salary of £179,000.