Companies: GOAL   

Goals, the operator of 23 ‘next generation’ five-a-side football centres, played an absolute blinder at the interim and looks great value long term.

For the half to June, the group scored 47% growth in profits to £3.1m on a 31% sales surge to £9.7m, with the dividend increased 67% to 0.5p. Cash generated from operations rose 35% to £4.9m, more than covering the £4m invested in new centres, with operating margins edging up to 38% (36%), demonstrating the high operational gearing within the business.

Analysts cheered 10% growth in like-for-like sales, driven by strong utilisation levels and new site openings. Two new centres were opened during the half, a further two should open by the year-end and the pipeline of new sites continues to strengthen. On the brand development front, Goals has inked a partnership with football magazine FourFourTwo, adding to a fruitful tie-up with Umbro and complementing its sponsorship deal with Powerade, the official drink of the 2008 European Championships.

This year, analysts are looking for pre-tax profits of £7m and 53% earnings growth to 11.2p, ahead of £9.4m and a 35% earnings push to 15.1p for 2008. Although the forward price/earnings (PE) ratio is a lofty looking 34.6, the shares are actually good value on a price/earnings to growth (PEG) ratio of 0.65. Goals’ next generation concept is flourishing alongside the small-sided game and, with bags of growth to go for in the UK alone, the future looks exceptionally bright. Investors who bought on our advice – GCI backed the shares at 262p in 2006 – should top up on relative recent share price weakness.