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Goals nets £11.4m to pay for expansion

GOALS Soccer Centres has raised £11.4 million from investors in a share issue to fund an accelerated roll-out of its five-a-side football centres in the UK and US.

GOOD SHAPE: Goals's boss Keith Rogers said the health of the business means growth will occur earlier now.
GOOD SHAPE: Goals's boss Keith Rogers said the health of the business means growth will occur earlier now.

East Kilbride-based Goals runs 43 centres in the UK and another in Los Angeles but called a halt to its building programme in 2012 to cut debt and beef up its operations.

In June of that year, the board had backed a £73m takeover offer by Ontario Teachers' Pension Plan which had promised £40m to expand the business. But the 144p-a-share deal was rejected by shareholders.

Yesterday, Goals raised the cash at 216.5p-a-share, in line with Friday's closing price and the stock finished the day up 10p or 4.6% at 226.5p.

Goals managing director Keith Rogers said: "Since 2012, Goals has been focused on cash generation and enhancing return on capital from existing sites and has postponed further new centre opening.

"Now with net bank debt reduced to £46.4m, the board believes that there is a significant opportunity to further develop the business and take advantage of the attractive market opportunity in both the UK and US."

Goals said part of the money would be used to restructure an interest rate swap taken out in 2008 and to strengthen its balance sheet.

Mr Rogers said: "The emphasis is on the accelerated roll-out."

He added: "The business is more fit for going forward and the economy is having an upturn and that is allowing us to move into growth phases earlier and faster than we otherwise would."

In the UK, Goals intends to open two sites in both 2014 and 2015 with a faster building programme pencilled in from 2016.

Goals has developed a modular building system which means it estimates each centre will cost around £1.7m to build.

The company claims that the UK market could take 100 more centres and Mr Rogers said that some cities, such as Manchester, could potentially host more football venues.

Goals also intends to expand within Los Angeles where it established a centre in 2010. Goals intends to open another site in the city in 2015 with two more to follow in 2016 and an increased rate of openings from 2017.

These centres are expected to cost £2.4m each due to additional facilities such as larger bar areas and bigger car parks than at the UK sites.

Goals's underlying pre-tax profit for 2013 was up 1.4% to £9.6m. Once the impact of £6.9m of exceptional items booked in 2012, such as the costs of the aborted takeover and a writedown of its US site, is included, earnings were up 269%.

It announced a final dividend of 1.175p to be paid on May 30 to take the full-year pay-out to 1.85p.

Mr Rogers, who has run Goals since 2000 when he led a management buy-in, said: "The business reviews have been completed, the key recommendation implemented and the board strengthened and the benefits of which have started to come through in the second half and have continued into 2014"

Mr Rogers played down the importance of the forthcoming Scottish independence referendum to Goals.

"The independence question does not really impact on our business," he said. "It is something we are quite sanguine about."

Goals has overhauled its board over the past year or so, taking on the likes of Alex Short, finance director of Irn-Bru maker AG Barr as a non-executive.

Former Arsenal chief executive Keith Edelman, who oversaw the sale of one of Scotland's last independent distillers Glenmorangie when he was chairman, became Goals's chairman in July. Yesterday, he spent £43,300 buying 20,000 shares in the placing.

Philip Burks, co-founder of storage company Big Yellow bought 80,000 shares for £173,200, giving him a total stake of 243,478 shares or 0.42% of the company.

Goals's managers did not invest more money. Before the fundraising Mr Rogers was Goals's third biggest investor with a 7.6% stake worth £9m at prevailing prices.

He said: "Management already hold a significant chunk of the business. They are pretty much already well incentivised."

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