GOALS Soccer Centres has warned a material rise in costs and slower growth in the US would lead to lower profits in its current financial year, sending shares spiralling down nearly 14 per cent.

And it revised its profit guidance for its UK operation down for next year by £600,000, as it became the latest in a string of companies to cite ongoing economic and political uncertainty relating to Brexit.

The five-a-side pitch operator, whose 50 sites include four in the US, said moves to revamp the food and drink offer and introduce a new children’s party product had resulted in a “materially higher initial cost of sales in these areas”.

At the same time, it said growth at its new US clubs in Pomona and Rancho, Los Angeles, had been slower than anticipated, and warned it will take longer for them to reach their potential.

The update from the East Kilbride-based company, whose biggest shareholder is Mike Ashley’s Sports Direct International, came after its first-half sales were hit by the Beast from the East early last year.

Goals noted the costs involved in developing the off-pitch services in areas such as food and drink would cut second-half profits by £300,00. Labour costs increased £300,000 and extra staffing requirements linked to new services cost £200,000.

And it said that slower growth in the US had resulted in non-recurring start-up losses of £800,000. The company, which has set up a joint venture with Manchester City owner City Football Group to drive its growth in the US, said its share of those extra costs was £400,000.

In light of slower growth in Pomona and Rancho, Goals said its potential share of US profits would be £700,000 lower in 2019 and 2020 than anticipated, having revised its estimate of trading at the new sites during their first two years of operation.

Conceding that its outrun for 2018 has been “disappointing”, Goals now expects to report a full year group adjusted profit of between £4.3m and £4.5m for the year, down from £6.2m last time. And it shaved £600,000 off its profit guidance for 2019 “in light of the current economic and political uncertainty”.

Goals’ chief executive Andy Anson said: “The investment strategy that is being executed is improving the underlying performance of the clubs, which is demonstrated in our H2 sales results. Frustratingly, a number of cost overruns have impacted 2018 profits. It is disappointing that well-conceived initiatives to drive revenue have been delivered at the expense of margin.

“However, we have already taken action to tighten cost control, and processes and procedures are now in place to augment and support margin management. The benefits of these changes will be felt in the current year, as will the effect of the new management team.

“We will continue to turn Goals around to deliver the performance that the management know the company can achieve.”

Having seen sales in its first-half hit by the Beast from the East, with heavy snowfall leading to a £500,000 shortfall in sales in the first three months of the year, Goals said yesterday that underlying sales had increased by four per cent in the second half, as it cited the benefit of continued investment in arena refurbishments. It reported underlying sales of £32.4m for the year ended December 31, up 0.5 per cent on 2017. Goals said it the 39 of its 46 UK clubs now have five or more upgraded pitches as a result of its investment programme.

In the US, Goals opened a fourth club in Covina, LA, where it said initial trading was encouraging. And in the second quarter of this year it will launch a new academy product with Manchester City across the Atlantic. But it booked £200,000 of exceptional charges on the translation of its US dollar loans at year-end because of exchange rate movements.

Goals is due to report its full-year results on March 12.

Shares closed down 10p at 62p.