Companies: PWR   

Five-a-side football centres group Powerleague is stepping up the pace of expansion, having inked a strategic partnership with Patron Capital Partners, a successful investment fund with particular nous in property.

Patron has acquired a 29% stake for £23.1m, buying shares from chairman Claude Littner and chief executive Sean Tracey (who both remain invested) at a substantial premium of 97.5p, in a canny tie-up that should help Powerleague source new sites in the UK and Europe as well as unlock value from its property portfolio.

Meanwhile, results for the six months to December proved robust in a period of expansion. On sales up 4% to £11.3m, pre-tax profits eased marginally to £1.9m (2007: £2m), reflecting the costs of opening four new centres. Following the February acquisition of five ‘Soccer Dome’ centres from JJB Sports for £17.4m cash, Powerleague now operates 43 centres and attracts more than 120,000 players every week.

Like-for-like pitch income growth, the key driver of the business, remains reassuringly strong, having increased by 5% during the seasonally quieter first half, while sponsorship and events revenues continue to grow, with Nivea For Men the latest blue-chip brand to have signed up. The one interim disappointment was an 8% reduction in like-for-like bar sales, reflecting general trends in the pubs and bars sector.

For the year to June, analysts have pencilled in profits of £5.2m and earnings of 4.3p, ahead of £7m and 5.8p for 2009, placing the shares on an undemanding prospective multiple of 13.6 for next year. Backers of the business at 70p in 2006, we think that rating fails to reflect growth prospects alone, never mind property portfolio possibilities. A firm hold.

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Powerleague	AIM	£36.82m	45.00p	0.50p
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