Goals Soccer Centres is raising £16.5m to help spruce up its 5-a-side football sites to make up for years of under-investment.
The company, which earlier this year reported a £6.2m full year loss amid increased competition, said it would place 16.75m shares are 100p each. The move comes after a strategic review of its operations.
As well as refurbishing buildings and pitches at many of its 47 centres - which include one in California - the funds will be used to upgrade its IT systems and grow its international business. It already plans a second US centre in Los Angeles and is seeking to expand in Asia and other markets.
Goals has also been beefing up its board, with Mark Jones joining from Rank as chief executive. Earlier this week it announced the appointment of Michael Bolingbroke, chief executive of Inter Milan, as a non-executive director.
The fundraising news has seen Goals’ shares rise 4p to 109p, but broker N+1 Singer was less enthusiastic. Analyst Sahill Shan moved from buy to hold and said:
Our initial reaction to the strategic review and the accompanying fund raise of £16.75m is that neither are as radical as they could have been. Most of the spend will be geared to improving existing facilities in order to recapture lost market share and making the product more premium.
Given key competitor Powerleague has announced similar plans and wider competition is intense, we question whether the actions outlined will be enough to deliver sustainable UK growth or just stabilise the business.
The strategic review has 4 essential pillars – (i) modernise and refurbish the UK estate; (ii) improve the overall customer proposition versus competition; (ii) invest in a further US pilot unit; and (iv) de-leverage the balance sheet (currently trading at 3 times net debt/ebitda covenant).
We had expected the raise to be between £20m-£30m in order to fully address the high balance sheet leverage and also accelerate the US opportunity.
