Companies: PWR   

We are encouraged to see Powerleague, profiled by GCI at 70p last year, trading at a healthy 46% premium to our recommendation. The operator of 37 soccer centres increased ‘adjusted’ pre-tax profits from £3.9m to £5m in another record-breaking year to June, ahead of the £4.8m forecast by analysts, on turnover 12% higher to £23m.

Other annual highlights for the Claude Littner-chaired group include a 41% surge in sales from sponsorship and events, as well as increased earnings of 4.5p (3.5p). For the current year, analysts are looking for a further impressive rise in profits to £5.6m and an earnings rise to 4.6p, placing the shares on a forward price to earnings ratio of 22 times.

That rating is more than merited, because this asset-backed business is cash generative, boasts high revenue visibility and has defensive characteristics, with the cost of playing on its pitches modest at £5-an-hour, insulating the business against economic downturn and with grassroots footballers playing the small-sided game more regularly than the full version. Trading at a discount to fellow AIM-quoted rival Goals Soccer Centres and with analysts targeting 130p for the shares, it is worthwhile adding to existing holdings.