A second profit warning in four months from five-a-side football operator Goals Soccer Centres (GOAL:AIM) sends shares in the £80 million cap down 12% to 135p.
We outlined the company's problems in a detailed article published in the 24 September edition of Shares, saying a turnaround looked to be a 'very long way off'. This has proved to be the correct call.
The group, which has 46 soccer centres in the UK and one in Los Angeles, now says the speed of recovery following the ‘challenging’ summer holiday period hasn’t been at the anticipated level.
This means full-year pre-tax profit is now expected to be between £8.2 million and £8.6 million, down from the previous forecast of £9.3 million to £9.8 million.
Goals had already warned about the difficult summer in September when it issued a profit warning after players cancelled matches and escaped the rain by going on holiday abroad.
Goals’ chief executive Keith Rogers told Shares its annual September marketing campaign would get players back to its pitches, but the latest trading statement shows this hasn't been successful.
‘Whilst we have made progress since 9 September, delivering week-on-week sales improvements, the speed of this recovery has not been at the level anticipated,’ the company says.
Goals’ share price has fallen by 36% so far this year. N+1 Singer has cut its target price from 160p to 120p, implying a further drop of 13.4%.
'We understand that whilst like-for-like sales are now currently 0%, the position in Sept-Oct remained negative,' comments N+1 Singer analyst Sahill Shan.
'Anecdotally we sense the core Leagues business has remained under pressure with a combination of a more competitive environment, players’ increasingly preferring the "casual" game option and slow recover from the poor summer months being key factors.'