POWERLEAGUE GROUP (PWR) – CHAMPIONS OF 5-A-SIDE
The majority of smaller listed companies have seen their valuations slashed in recent months and Powerleague is no different. In some cases the falls have been warranted looking at weakening fundamentals. However, Powerleague is very much in growth mode and although a downturn in the economy is far from good news, it should be put into context for a company with excellent long term prospects. Having only floated in 2005, there is still plenty of scope for expansion and when confidence returns to investing in smaller companies Powerleague should be re-rated as a growth company.
Powerleague is a leading operator of 5-a-side football centres in the UK. Centres with floodlit pitches are located in various geographical locations throughout the UK. Powerleague Group was established in December 1999 as a result of the merger of Powerplay Soccer Centres Limited and Anchor International Limited, both of which were 3i Group plc investee companies. In August 2003, Claude Littner led a management buyout of Powerleague Group from 3i Group plc, backed by the business’ existing bankers, HBOS plc. Since that time, Powerleague has continued to grow, investing substantially in its existing estate and opening several new sites each year. The company’s shares gained admission to AIM in May 2005.
The English Football Association states that the number of adults playing small-sided football in England grew from 4.4 million players in 2002 to 6 million players in 2004. Small-sided football is now played by more adults than the full 11-a-side game and this fact has led to its formal recognition by the English Football Association.
Powerleague believes that there is the opportunity to develop further centres in the UK where either currently none exist or in areas where the size of population can accommodate more than one commercial operator. The company is well placed to take advantage of the opportunity to develop further sites due to its flexible approach to centre construction.
In recent months there have been a number of interesting developments for Powerleague. The acquisition of Soccer Domes from JJB Sports was clearly significant in boosting future revenues and the strategic partnership with Patron Capital Partners may well unlock value. The company has a proven track record of growth and this looks set to continue.