Goals Soccer Centres calls for rights issue as five-a-side football firm takes financial hit from aborted takeover

Britain's biggest five-a-side football pitch firm, Goals Soccer Centres , has seen profits fall due to a large legal bill after it successfully fought HMRC over a VAT receipt and for its aborted takeover by Ontario Teachers. And now, the company has announced a rights issue in the hope of raising £2.8m to pay down its £53.9m debt pile to £40m in two years. Goals, which has 43 sites across the UK, said half year pretax profits were at £1.6m, down from £4m during the same period last year, although revenues were up 11% to £16.3m. The fall in profits was mainly due to £1.3m spent, in part, on the unsuccessful takeover by the Ontario Teachers Pension Plan in July. OTPP offered £73m, or 144p a share, for the company, which the board approved. Senior board members would have been in line for a £9.3m payday. But the deal failed to pass, after not enough shareholders approved. A 75% approval was needed, but only 71% voted in favour. And as if to rub salt into the wound of the shareholders who failed to approve the takeover, the board decided on a rights issue to raise an extra £2.8m "to provide additional balance sheet flexibility". Shares were down 6p, 4.9%, at 116p – a long way off the 144p offered by OTPP. Earlier this month the company did have some good news, winning its HMRC battle over VAT charged on five-a-side football, which Goals was contesting. The win should save them around £500,000 a year. Analysts Lindsey Kerrigan and Simon French at Panmure Gordon wrote: Shareholders may feel a bit miffed at being asked to subscribe to the proposed placing at 115p per share having rejected a 144p per share bid just weeks ago. We anticipate no change to consensus PBT forecasts, but will need to adjust our EPS figures for the proposed placing. Goals is a solid business with strong management, but needs to go through a period of rehabilitation.