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Powerleague (PWR:AIM) 80.5p

Private equity group Patron has taken a 29% stake in the five-a-side football club operator Powerleague and will provide access to a property portfolio that should accelerate expansion in the UK and overseas. (Read the full story: www.sharesmagazine.com/node/3647)

Shares says: Patron has a large landbank in the UK and Europe and will make available some of this to Powerleague for potential new site developments. At the moment, it can often take up to three years of negotiations once a new site is found before approval is given for a new sports facility, so using Patron’s landbank means new sites should be built faster. Five-a-side football continues to grow in popularity and, in turn, is becoming more competitive. Aim-quoted Goals Soccer Centres recently announced plans to expand into North America and South Africa. Private equity involvement should provide a catalyst for another share rally, once new sites have been secured. HOLD

The City - Altium says: Powerleague operates in a market that is highly defensive, is pseudo-freehold, generates high levels of cash and has a rising returns profile. The shares currently trade on around 23% PE discount and 35% EV/EBITDA discount to Goals Soccer Centres, which is too large. With significant barriers to entry, strong growth and defensive characteristics, the shares could rise to 100p in the mid-term. BUY

The City - Numis says: Powerleague is well positioned to capitalise and expand on its position as the leader in the UK five-a-side football market. It is a proven and expanding market which can support at least 200 branded sites. There are high barriers to entry, high unit returns and low cost per player. This coupled with asset backing underline the attractions of Powerleague and the sub-sector, something that Patron Capital has already noticed. BUY