GOALS, the East Kilbride-based five-a-side football operator, has teamed up with the owner of Manchester City to expand across the US and Canada.

Goals, which has ended merger talks with Powerleage, will contribute its two soccer centres in California, plus four in development, to the joint venture while City Football Group (CFG) will put up $16m (£12.3m) to fund a number of new sites.

The new venture was unveiled at Goals Pomona in Los Angeles by Nick Basing Goals chairman, and Ferran Soriano, chief executive of CFG, who were joined by a number of Manchester City players.

Goals chief executive Mark Jones acknowledged that the group’s growth in the US had been sluggish, and said a partner was required to meet its ambitions.

“There is an opportunity here to build a great business,” he said. “This [deal] takes us to a totally different level.”

He said there had “always been a question mark from some shareholders about our commitment to the US” because of the company’s size but the deal “commits us to the [US] long-term”.

Mr Jones said Goals could have pursued its strategy of adding one or two sites per year from its own cash, but the joint venture would now fund US growth while its UK cash flow would fund its ongoing modernisation projects in the UK.

A third site in Rancho Cucamonga, California, is scheduled to open this year with a further four are already in the pipeline. The book value of the assets beings transferred into the joint venture is £8.2m.

Mr Jones said the plan was to have five sites operational by the end of 2018. “This allows us to put more resources into finding a bigger pipeline [and] subject to that pipeline, we’ve got the cash to open up to four sites the following year [2019].”

He added that the strategy of building on public land, paying rent and offering five-a-side format football was something no other business was offering.

“That business model will continue, we have to knock on doors, but we’re now doing that with one of the biggest soccer groups in the world,” he said. “With our expertise on how to run these centres and [CFG] behind us, that will open the door to a bigger pipeline.”

Goals now aims to expand beyond California, with Mr Jones highlighting Vancouver as a possible site. “The immediate focus is to build out the Southern California pipeline, and then look to places like Texas and Florida,” he added.

In addition to the funding, CFG brands, including Manchester City and New York City, will be used to promote the business.

Analysts at Canaccord Genuity estimated the joint venture, whose six-strong board will be led by Mr Basing, had funds and cashflow to develop a portfolio of 16 sites over the next seven years, capable of generating more than $10m of earnings.

Ahead of publication of its interim results on September 12, Goals said revenue for the six months to June 30 was up two per cent to £17.3m, with like-for-like sales up 1.4 per cent, having shrunk by 1.9 per cent in the same period last year.

The group’s UK business was described as “a tad disappointing” by Canaccord Genuity. And Mr Jones said sales, although growing, had been “a little bit anaemic”.

Goals reduced full-year revenue guidance by £800,000, with one-quarter of that attributed to Goals US profits, which will be consolidated into the new joint venture.

It also said it had “currently” concluded merger talks with Powerleague. Mr Jones said: “We’re a small business and we’re focused on the UK turnaround and now the JV in the US. We thought it was right to conclude those talks, at this time.”

Trading was “encouraging” at three sites where Clubhouse 2020 off-field upgrades have been completed, including Glasgow South. After two further upgrades are completed in August, the company will pause to evaluate its investment. Its Arena on-field upgrade programme has now been completed on 223 arenas, with 25 planned for the second half.