RNS Number:2337B
Soccercity PLC
31 July 2007
SOCCERCITY PLC
("Soccercity" or the "Company")
PRELIMINARY RESULTS FOR THE
YEAR ENDED 31 JANUARY 2007
Chairman's Statement
2006 was a disappointing year with the second half in particular beset by
operational and organisational problems. Overall revenue growth in the year was
modest and did not reflect the significant investment made in seeking to develop
the business.
Strategic review
The Board responded to these issues by initiating an extensive strategic review
in January 2007. Good progress has already been made in implementing the key
elements of the revised strategy, although the benefits of the many operational
actions taken are only expected to come through in the second half of this
financial year:
* The immediate strategic focus of the Company will be on its existing
and future business in the north of England.
As a result the Directors have entered into an agreement for the sale of its
indoor centre at Fareham for a consideration of #697,000. Fareham, located
on the south coast, is one of four centres within the Group, the other three
being in Leeds, Huddersfield and Bradford. The Board believes that the
proposed sale of Fareham represents an opportunity for the Group to realise
value and will enable the Directors and management team to focus on the
Group's core business interests in the north of England, particularly the
indoor centres. In the financial year to 31 January 2007, the Fareham centre
recorded unaudited turnover of #718,000 and a profit of #191,000, before
depreciation and certain central Group costs. The net assets of the Fareham
centre as at 31 January 2007 have been written down to #697,000 including
goodwill of #604,000.
The net sale proceeds from the Fareham disposal will be used by the Group to
reduce current liabilities and outstanding debts and to invest in its
remaining indoor football centres, together with the development of new
business at these centres. In addition, #350,000 from the disposal proceeds
will be used to repay outstanding debt.
* The Executive Management Team has been re-organised and strengthened with
new senior appointments made in finance, sales and marketing. A dedicated
sales team is in place and is beginning to demonstrate success in
recruiting new teams, establishing new leagues and securing sponsorship
income, which the Board fully expects to continue throughout the current
year.
* The core football offering is being improved and this will include the
installation of premium quality pitches, starting with the Leeds centre
within the next two months.
* The Group is developing new, complementary, business streams, utilising
the existing facilities and core competencies.
* The Group has strengthened its balance sheet throughout the last year by
raising #834,739 through the issue of new ordinary shares before expenses
and repayment of loans. The Board believe that there is now a more
appropriate capital structure in place to take advantage of the business
opportunities available to the Group.
Financial and Operating Review
Overall revenues at #2.036m were just 1% higher than last year (2005: #2.018m)
reflecting in part the adverse impact of the World Cup on attendances during
June and July when the Group experienced a 15% reduction in income. Although
revenues in the second half of the year were at #1.033m 3% higher than the first
six months, the scheduled league structure was undoubtedly damaged by the World
Cup effect and the re-activation of existing customers has been very
challenging.
Gross margin reduced to 71% of sales reflecting, in part, weaker margins from
catering and one-off purchases of football equipment supplies. Underlying
overheads increased by 8.5%, partly reflecting weak operational management,
which has now been addressed with better systems in place to control overheads,
and also an investment in business development.
In addition, it is the opinion of the Directors that the recoverable amount of
goodwill is estimated to be less than the carrying amount, resulting in an
impairment loss of #350,471, which has been written off to the Profit and Loss
account.
2007 2006 Variance Variance
#'000s #'000s % #'000s
Turnover 2,036 2,018 1 18
Gross Margin 1,451 1,488 (2) (37)
Overheads (1,651) (1,520) (8.5) (131)
EBITDA (200) (32) (168)
(excl Business Dev and
Loan cancellation)
Business Dev (86) (8) (78)
Loan cancellation 72 (72)
EBITDA (286) 32 (318)
In response to the poor revenue performance in June and July, the Group decided
to increase its investment in human resources focused on new business
development and customer recruitment. Despite the increased expenditure, the
anticipated recovery in revenues has taken longer to come through than expected,
partly because customer retention strategies need to be more effective and
certain centres are in need of further refurbishment. The revised strategy has
now addressed these issues with the implementation of an aggressive marketing
plan and planned works to replace football pitch surfaces.
During the year, the Board continued with the refinancing programme and have
secured additional equity finance. The Group has also reduced borrowings through
a combination of loan repayments and the conversion of debt into equity. Bank
debt at the beginning of the 2007 financial year was #136,000 but has now been
reduced to #68,000. Since the beginning of the new financial year, a further
#200,000 of new equity and loans has been secured. This, along with the net
proceeds from the sale of Fareham, ensures that there is a more appropriate
capital structure in place to progress the business opportunities available to
the Group.
Employees
I would like to thank all the staff working across the Soccercity centres for
all their hard work and commitment during a challenging year.
Outlook
The Board are fully aware of the improvements that need to be delivered to
improve trading performance and provide a strong platform for sustained growth.
A clear strategy and a focused management team are now in place, whilst
following the sale of Fareham, the balance sheet will be strengthened further.
We are confident that the small sided football market as a whole remains buoyant
and, with an improving customer offer we believe that Soccercity is well
positioned to take advantage of the ever increasing demand for quality indoor
football facilities.
Norman Molyneux
Chairman
For more information please contact:
Norman Molyneux, Soccercity plc 01942 322256
David Youngman, WH Ireland Limited 0161 832 2714
SOCCERCITY PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 JANUARY 2007
2007 2006
Notes # #
TURNOVER 2 2,036,013 2,018,063
Cost of sales (584,674) (529,625)
GROSS PROFIT 1,451,339 1,488,438
Administrative expenses (including amortisation and impairment
of goodwill of #471,671 (2006: #116,451)) (2,326,371) (1,673,470)
OPERATING LOSS 3 (875,032) (185,032)
Interest receivable and similar income 7 1,127 8,234
Interest payable and similar charges 8 (78,938) (107,064)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (952,843) (283,862)
TAXATION 9 - -
LOSS FOR THE FINANCIAL YEAR (952,843) (283,862)
Loss per share 10 1.20p 0.81p
All amounts relate to continuing operations.
There were no recognised gains or losses other than the loss for the year.
SOCCERCITY PLC
CONSOLIDATED BALANCE SHEET
31 JANUARY 2007
2007 2006
Notes # # # #
FIXED ASSETS
Intangible 11 1,331,314 1,802,985
Tangible 12 1,039,954 1,027,523
2,371,268 2,830,508
CURRENT ASSETS
Stocks 14 22,453 29,920
Debtors 15 271,120 221,676
Cash in hand 70,818 2,348
364,391 253,944
CREDITORS: amounts falling
due within one year 16 (1,432,852) (1,499,541)
NET CURRENT LIABILITIES (1,068,461) (1,245,597)
TOTAL ASSETS LESS CURRENT
LIABILITIES 1,302,807 1,584,911
CREDITORS: amounts falling
due after more than one year 17 (284,729) (355,707)
NET ASSETS 1,018,078 1,229,204
CAPITAL AND RESERVES
Called up share capital 20 1,210,725 375,986
Share premium account 21 2,104,997 2,198,019
Profit and loss account 21 (2,297,644) (1,344,801)
EQUITY SHAREHOLDERS' FUNDS 22 1,018,078 1,229,204
SOCCERCITY PLC
BALANCE SHEET
31 JANUARY 2007
2007 2006
Notes # # # #
FIXED ASSETS
Intangible assets 11 1,331,314 1,802,985
Tangible assets 12 1,039,954 1,027,523
Investments 13 61,102 61,102
2,432,370 2,891,610
CURRENT ASSETS
Stocks 14 22,453 29,920
Debtors 15 270,064 455,940
Cash in hand 59,536 2,348
352,053 488,208
CREDITORS: amounts falling due
Within one year 16 (1,198,676) (1,225,497)
NET CURRENT LIABILITIES (846,623) (737,289)
TOTAL ASSETS LESS CURRENT LIABILITIES 1,585,747 2,154,321
CREDITORS: amounts falling due
after more than one year 17 (284,729) ( 355,707)
NET ASSETS 1,301,018 1,798,614
CAPITAL AND RESERVES
Called up share capital 20 1,210,725 375,986
Share premium account 21 2,104,997 2,198,019
Profit and loss account 21 (2,014,704) (775,391)
EQUITY SHAREHOLDERS' FUNDS 1,301,018 1,798,614
SOCCERCITY PLC
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 JANUARY 2007
2007 2006
# #
Reconciliation of operating loss to net cash outflow from operating
activities
Operating loss (875,032) (185,032)
Amortisation of goodwill 121,200 116,451
Impairment of goodwill 350,471 -
Depreciation of tangible fixed assets 117,113 100,341
Increase in debtors (49,444) (46,588)
Decrease/(increase) in stocks 7,467 (22,265)
Increase in creditors 127,486 241,359
Net cash (outflow)/inflow from operating activities (200,739) 204,266
CASH FLOW STATEMENT (note 23)
Net cash (outflow)/inflow from operating activities (200,739) 204,266
Returns on investments and servicing of finance (77,811) (98,829)
Capital expenditure (129,544) (136,218)
(408,094) (30,782)
Financing 495,969 33,130
Increase in cash in the year 87,875 2,347
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase in cash in the year 87,875 2,347
Repayment of loans 228,341 554,912
New loans (140,407) (432,596)
Change in net debt resulting from cash flows 175,809 124,663
Conversion of loans into share capital 157,814 -
Movement of debt in the period 333,623 124,663
Net debt at 1 February 2006 (777,937) (902,600)
Net debt at 31 January 2007 (444,314) (777,937)
1 ACCOUNTING POLICIES
(a) Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards. They have been prepared
on a going concern basis as disclosed in note 29.
The consolidated financial statements comprise the audited financial statements
of the company and its subsidiary undertakings made up to 31 January 2007.
A separate profit and loss account for the parent company has not been reported
as permitted by Section 230(2) of the Companies Act 1985.
(b) Turnover
Turnover comprises of the hire of five-a-side football pitches, income from
children's play centres and sales of other goods, net of value added tax.
(c) Goodwill
Goodwill represents the difference between the consideration paid less the fair
values of attributable net assets acquired at the dates of acquisition.
Goodwill is capitalized in the year which it arises and amortised over its
estimated useful life.
(d) Impairment
An impairment of goodwill is recognised when the carrying value of the goodwill
is permanently in excess of its recoverable value.
(e) Tangible fixed assets
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided at rates calculated to write off the cost of fixed assets, less their
estimated residual value, over their expected useful lives on the following
bases:
Pitch & Fun City construction 6.7%
Other plant and machinery 20%
Fixtures, fittings and equipment 10%
Motor vehicle 33%
Leasehold land and buildings Over the period of the lease
(f) Operating leases
Operating lease rentals are charged in the profit and loss account on a straight
line basis over the lease term.
(g) Investments
Investments are stated at the lower of cost and net realisable value.
(h) Deferred taxation
Full provision is made for deferred taxation assets and liabilities arising from
all timing differences between the recognition of gains and losses in the
financial statements and recognition in the tax computations, except for those
timing differences in respect of which the standard specifies that deferred tax
should not be recognised. Deferred tax assets and liabilities are calculated at
the rates of tax expected to be in effect at the time the timing differences are
expected to reverse. The Group has not adopted a policy of discounting deferred
tax assets and liabilities.
1 ACCOUNTING POLICIES (continued)
(i) Stocks
Stocks are stated at the lower of cost and net realisable value.
(j) Finance Leases and hire purchase
Assets acquired under finance leases or hire purchase are treated
as tangible fixed assets and depreciation is provided accordingly. The present
value of future rentals is shown as a liability and the interest element of
rental obligations is charged to the profit and loss account on a straight-line
basis over the period of the lease.
2 TURNOVER AND SEGMENTAL ANALYSIS
Turnover and operating loss is attributable to one class of business, the
operation of leisure centres, wholly within the United Kingdom.
3 OPERATING LOSS
The operating loss is stated after charging:
2007 2006
# #
Depreciation of fixed assets:
- owned by the company 110,780 90,841
- held under finance leases 6,333 9,500
Amortisation of goodwill 121,200 116,451
Impairment of goodwill 350,471 -
Auditors' remuneration:
- as auditors 24,000 18,000
- for provision of non-audit services - 2,750
Operation lease rentals:
- plant and machinery 600 1,540
- other 393,763 374,162
Amounts paid to auditors for other services are analysed as:
2007 2006
# #
Advisory services - 2,750
4 DIRECTORS' EMOLUMENTS AND BENEFITS
2007 2006
# #
Directors' emoluments 81,874 67,672
No directors (2006 - none) were members of company pension schemes.
5 STAFF COSTS
Staff costs, including directors' emoluments, were as follows:
2007 2006
# #
Wages and salaries 716,665 542,000
Social security costs 93,126 70,433
809,791 612,433
The average monthly number of employees, including executive directors, during
the year was:
2007 2006
No No
Management and administration 104 128
6 IMPAIRMENT OF GOODWILL
The directors have reviewed the carrying value of goodwill and have recognised
an impairment of #350,471 which is reflected in note 11, and included within
administration expenses.
7 INTEREST RECEIVABLE AND SIMILAR INCOME
2007 2006
# #
Other interest receivable 1,127 8,234
8 INTEREST PAYABLE AND SIMILAR CHARGES
2007 2006
# #
Bank loans and overdrafts 14,020 5,278
Hire purchase agreements 8,675 8,675
Other loans 56,243 93,111
78,938 107,064
9 TAXATION
2007 2006
# #
(a) Analysis of (credit)/charge in year
Deferred tax
Changes in deferred tax balances arising from:
Origination or reversal of timing differences - -
(b) Factors effecting the tax charge for the year
The tax assessed for the year is greater than would be expected by multiplying profit on
ordinary activities by the standard rate of corporation tax in the UK of 30%. The differences
are explained below:
Loss on ordinary activities before tax (952,843) (283,862)
Loss on ordinary activities multiplied by the standard
rate of corporation tax of 30% (2006 30%) (285,853) (85,158)
Effects of: 3,500 2,200
Expenses not deductible for tax purposes
Depreciation/amortisation/impairment in excess
of capital allowances 102,000 17,701
Losses carried forward 180,353 65,257
Current tax charge for the year - -
10 LOSS PER SHARE
2007 2006
Loss Loss per share Loss Loss per share
# #
Basic and diluted 952,843 1.20p 283,862 0.81p
Amortisation of goodwill 121,200 (0.15)p 116,451 (0.33)p
Impairment of goodwill 350,471 (0.44)p - -
Basic and diluted before
amortisation and impairment of
goodwill. 481,172 0.61p 167,411 0.48p
The calculation of loss per share is based upon the weighted average
number of shares in issue during the year of 79,429,259 (2006 - 34,968,761).
11 INTANGIBLE FIXED ASSETS
Group and company
Goodwill
Cost #
At 1 February 2006 2,153,846
At 31 January 2007 2,153,846
Amortisation
At 1 February 2006 350,861
Charge for the year 121,200
Impairment in the year 350,471
At 31 January 2007 822,532
Net book value
At 31 January 2007 1,331,314
At 1 February 2006 1,802,985
A discount rate of 10% has been applied by the directors when assessing the
value of goodwill.
12 TANGIBLE FIXED ASSETS
Group and company
Leasehold Plant and machinery Fixtures and
land and and vehicles fittings
buildings Total
Cost # # # #
At 1 February 2006 28,980 50,756 1,294,509 1,374,245
Additions - 21,674 107,870 129,544
31 January 2007 28,980 72,430 1,402,379 1,503,789
Depreciation
At 1 February 2006 18,592 26,841 301,289 346,722
Charge for the year 1,620 11,511 103,982 117,113
31 January 2007 20,212 38,352 405,271 463,835
Net book value
At 31 January 2007 8,768 34,078 997,108 1,039,954
At 1 February 2006 10,388 23,915 993,220 1,027,523
Included within plant, machinery and vehicles are assets purchased under
hire purchase agreements with a cost of #95,000 and a net book value at 31
January 2007 of #62,539 (2006 - #68,882).
13 FIXED ASSET INVESTMENTS
Company
Shares in
subsidiary
Cost undertakings
#
At 1 February 2006 61,102
At 31 January 2007 61,102
The company has interests in the following subsidiaries incorporated in the UK.
Name % holding Nature of trade
Soccercity North Limited 100 Football leisure centres
Soccercity South Limited 100 Dormant
14 STOCKS
Group Company
2007 2006 2007 2006
# # # #
Finished goods 22,453 29,920 22,453 29,920
15 DEBTORS
Group Company
2007 2006 2007 2006
# # # #
Due within one year
Trade debtors 20,995 36,703 20,995 36,703
Other debtors 41,056 129,594 40,000 129,594
Prepayments and accrued income 119,475 55,379 119,475 55,379
181,526 221,676 180,470 221,676
Due after one year
Other debtors 89,594 - 89,594 -
Amounts due from Group
undertakings - - - 234,264
271,120 221,676 270,064 455,940
16 CREDITORS - amounts falling due within one year
Group Company
2007 2006 2007 2006
# # # #
Bank loans and overdrafts 67,999 136,498 67,999 136,498
Loans from related parties 20,407 22,500 20,407 22,500
Other loans 125,400 243,400 125,400 243,400
Hire purchase agreements 16,597 22,180 16,597 22,180
Amounts due to Group
undertakings - - 99,259 -
Trade creditors 641,894 667,920 578,842 667,920
Corporation tax 26,720 22,038 26,720 22,038
Other tax and social security 366,657 232,525 208,122 69,614
Other creditors 111,133 111,133 - -
Accruals and deferred income 56,045 41,347 55,330 41,347
1,432,852 1,499,541 1,198,676 1,225,497
Bank loans are secured by a debenture over the assets of the Group.
Finance lease and hire purchase creditors are secured on the assets concerned.
17 CREDITORS - amounts falling due after more than one year
Group Company
2007 2006 2007 2006
# # # #
Loans from related parties - 7,500 - 7,500
Other loans 277,814 324,696 277,814 324,696
Hire purchase agreements 6,915 23,511 6,915 23,511
284,729 355,707 284,729 355,707
18 LOANS AND OVERDRAFTS
Loans and overdrafts fall due for payment as follows:
Group Company
2007 2006 2007 2006
# # # #
Bank loans
Within one year 67,999 136,498 67,999 136,498
67,999 136,498 67,999 136,498
Bank loans are secured by a debenture over the assets of the Group.
Group Company
2007 2006 2007 2006
# # # #
Hire purchase agreements
Within one year 16,597 22,180 16,597 22,180
Between two and five years 6,915 23,511 6,915 23,511
23,512 45,691 23,512 45,691
Finance lease and hire purchase creditors are secured on the assets concerned.
Group Company
2007 2006 2007 2006
# # # #
Other loans
Within one year 125,400 243,400 125,400 243,400
Between two and five years 277,814 324,696 277,814 324,696
403,214 568,096 403,214 568,096
19 DEFERRED TAXATION
A deferred tax asset amounting to approximately #379,854 (2006: #199,501) in
respect of tax losses, which will be recoverable against suitable taxable future
profits has not been recognised in the accounts.
20 SHARE CAPITAL
Allotted, called up and
Authorised fully paid
No No #
Ordinary shares of #0.01 each
At 1 February 2006 200,000,000 37,598,580 375,986
Issued in the year - 83,473,918 834,739
At 31 January 2007 200,000,000 121,072,498 1,210,725
On 13th April 2006, the company issued 41,250,000 ordinary shares of 1p each at
par for cash. In addition, the company issued 7,500,000 ordinary shares at 1p
each to Acceleris Corporate Ventures in exchange for liabilities due.
On 10th November 2006, the company issued 8,500,000 ordinary shares of 1p each
at par for cash. In addition, the company issued 2,937,500 ordinary shares of 1p
each at par to W H Ireland Ltd in exchange for liabilities due.
On 29th January 2007, the company issued 7,500,000 ordinary shares of 1p each at
par for cash. On the same date, the company converted #157,864 of convertible
loan stock by the issue of 15,786,418 ordinary shares of 1p each at par. The
convertible loan stock was issued on 13th April 2006 in exchange for term loans
due by the company.
21 RESERVES
2007 2006
Share premium account # #
Group and company
At 1 February 2006 2,198,019 2,095,902
Premium on shares issued in the year - 232,000
Expenses of share issues (93,022) (129,883)
At 31 January 2007 2,104,997 2,198,019
Profit and loss account Group Company
2007 2007
# #
At 1 February 2006 (1,344,801) (775,391)
Loss for the year (952,843) (1,239,313)
At 31 January 2007 (2,297,644) (2,014,704)
22 SHAREHOLDERS' FUNDS
Group
2007 2006
# #
Shareholders' funds at 1 February 2006 1,229,204 1,357,620
Loss for the year (952,843) (283,862)
New shares issued 834,739 285,329
Expenses of share issues (93,022) (129,883)
Shareholders' funds at 31 January 2007 1,018,078 1,229,204
21 GROSS CASH FLOWS
2007 2006
# #
Returns on investments and servicing of finance
Interest received 1,127 8,234
Interest paid (70,263) (98,388)
Interest element of finance lease rentals (8,675) (8,675)
(77,811) (98,829)
Capital expenditure
Payments to acquire tangible fixed assets (129,544) (136,218)
Financing
Issue of share capital 676,925 285,329
Expenses paid in connection with the issue of shares (93,022) (129,883)
New loans 140,407 432,596
Loans repaid (228,341) (554,912)
495,969 33,130
22 ANALYSIS OF CHANGES IN NET DEBT
At 1 February Non cash At 31
2006 Cash flows movement January 2007
# # # #
Cash at bank and in hand 2,348 68,470 - 70,818
Overdrafts (19,405) 19,405 - -
87,875
Debt due within 1 year (405,173) 16,956 157,814 (230,403)
Debt due after 1 year (355,707) 70,978 - (284,729)
Total (777,937) 175,809 157,814 (444,314)
23 OTHER COMMITMENTS
Group
At 31 January 2007 the Group had annual commitments under operating leases as
follows:
Long leasehold
Land and buildings
2007 2006
# #
Expiry date:
Between one and five years 151,000 151,000
After more than five years 222,000 222,000
24 CONTINGENT LIABILITIES
The parent company has entered into a cross guarantee structure in respect of
banking facilities with its subsidiary companies.
25 TRANSACTIONS WITH RELATED PARTIES
The directors' interests in the company's issued share capital at the balance
sheet date and at the start of the year were:
Ordinary Shares of #0.01 each
2007 2006
Norman Molyneux - Chairman 900,000 100,000
Jason Lynn - Managing Director 3,550,000 3,000,000
Trevor Cherry - Non-executive Director 805,625 255,625
During the year the Group made purchases of #37,767 (2006 - #192,315) from
Acceleris Corporate Ventures, an entity in which a director Norman Molyneux has
an interest. The amount outstanding at the year-end and included in trade
creditors is #93,708 (2006 - #194,487).
Simon Reynolds, a former shareholder and director, had an interest-free loan of
#7,500 (2006: #30,000) which is included within loans from related parties.
Included within loans from related parties are loans owed to directors of the
Company amounting to #12,907 (2006: Nil).
Jason Lynn has given a personal guarantee over the bank loans of the Group.
26 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS
The Group's principal financial instruments comprise bank loans, term loans and
hire purchase. The main purpose of these financial instruments is to raise
finance for the Group's operations. The Group has various other financial
instruments such as trade debtors and trade creditors, which arise directly from
its operations.
The Group has taken advantage of the exemption to exclude short-term debtors and
creditors from the disclosure given below other than currency exposures.
Interest risk profile of Financial Instruments
2007 2006
Interest rate # #
Bank loans 2% over base 5,271 91,567
Bank loans 3% over base 10,228 25,526
Related Party loans See note 27 20,407 30,000
Currency Risk
It is the Group's policy not to utilize any foreign currency. There is no
foreign currency exposure at the end of the year.
Liquidity
The Group has an overdraft facility repayable on demand. The Group has bank
loans and totalling #67,999 which are repayable within one year.
Fair values
There are no material differences between fair values and book values for any
financial assets and liabilities.
29 GOING CONCERN AND POST BALANCE SHEET EVENTS
The Group made an operating loss for the year after taxation of #952,843 after
an impairment charge of #350,471 following a review of the carrying value of
goodwill, and has net current liabilities of #1,068,461.
During the year, the shareholders continued to support the business and a
further #583,903 (after costs and conversion of loans) was raised with the issue
of 83,473,918 new shares of 0.01p each. Since the year end the shareholders have
continued to support the business with new equity of #110,000 and additional
loans of #90,000.
The directors completed an extensive Strategic Review of operations in January
2007 which concluded that the immediate focus of the company should be on its
existing and future business in the north of England. As a result, the Group
have exchange contracts for the disposal of the business and assets of the
indoor centre at Fareham, Hampshire for a net cash consideration of
approximately #697,000. This contract was approved at an Extraordinary General
Meeting of the shareholders on 27 July 2007, and the only condition to be
fulfilled relates to the assignment and extension of the lease to the purchaser.
The Board believes that the sale of Fareham represents an opportunity for the
Group to focus on the Group's core business interests in the north of England.
The sales proceeds from the disposal will be used to reduce current liabilities
and outstanding debts of the Group. The company will continue with its existing
policy of discharging liabilities on an extended basis and as such, will require
the continued agreement of its trade and statutory creditors to delay payment
beyond normal terms. The directors are confident that this will be forthcoming.
In addition, the Group intends to invest in the infrastructure of its remaining
centres to provide a platform for the development of new business. Plans are
already in place for replacement of pitch surfaces in Leeds which will
re-establish the Centre as the leading indoor venue in the city and with an
aggressive marketing campaign, the Board are confident that turnover at the
current centres will improve by circa 20% year-on-year.
The Group is currently operating within its banking facilities and a significant
improvement in trading performance is forecast for the remainder of the year.
The directors are confident that these forecasts will be achieved, and hence
consider it appropriate for the accounts to be prepared on a going concern
basis.
30. A Copy of the Annual Report and Accounts for the period ended 30 January
2007 will be despatched to shareholders by 31 July 2007 and copies will be
available from the Company's registered office at Douglas Bank House, Wigan
Lane, Wigan, Lancashire, WN1 2TB.
31. The Annual General Meeting of the Company will be convened in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ZGGFNKMLGNZM
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