PROJECT TRAFFORD
INVESTMENT TEASER/PROPOSAL FOR THE DEVELOPMENT OF
A PROPOSED 3G (3RD GENERATION) ASTRO TURF FOOTBALL PITCH LEKKI, LAGOS, NIGERIA
AUGUST, 14
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TABLE OF CONTENT
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EXECUTIVE SUMMARY
Project Trafford is an entrepreneurial idea conceived and crafted to create and offer a top-notch and mouth-watering neighborhood recreational experience for kids & adults within Lagos particularly for the Island residents (i.e. Ikoyi, Lekki, Victoria-Island) and other adjoining areas.
With the growing popularity of the 5 a-side Astroturf football around the world and the envisaged need to make the leisure periods of lagosians worthwhile experiences as well as ensuring a fit and healthy population amidst the hustling and bustling activities that characterize the commercial hub of Nigeria- Lagos, the idea to develop and operate a state-of-the-art 3G (Third Generation) Astroturf football pitch in the middle of Lekki Peninsular was conceived.
This recreational facility proposes to offer exclusive and with-you-in-mind services within the scope of:
The development is to be executed by a league of trusted partners/individual with seasoned experience in the development of Astroturf pitches across all terrains in Nigeria namely- rocky, sandy, swampy areas whilst carrying out risk and environmental impact assessment of the development to ensure high quality, standard, safe and healthy facility for the recreational needs of its prospective clientele.
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BUSINESS CONCEPT & MODEL
The business idea is to develop and operate sports infrastructures which will be of FIFA Standard in the form of state-of-the-art Astroturf pitches in strategic places in Lagos and Nigeria as a whole. The project’s start off point will be in Lekki, Lagos and it is expected that in making the idea see the light of day, the land for the development of the facility shall be leased for a possible period of 10 years in line with the agreement with the Lessor (Land Owner).
Project Trafford intends to deliver an exquisite and exclusive recreational solutions by developing and operating a FIFA standard Astroturf Pitch measuring 45.75m by 30 m, this size is suitable for 7 or 9 aside games.
The facility shall provide a safe and exciting arena for football enthusiasts to play the game and also to coach young kids who have ambitions of being professional footballers. For a restful, relaxing and juicy experience the facility shall boast of the following;
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BUSINESS CONCEPT & MODEL
In keeping to its vision, the facility shall provide the following array of service offerings but not limited to;
For ease and to better the experience of prospective clientele, the facility shall have a store which shall carter for the refreshment needs of its clientele at their respective expense for replenishment of lost body fluids.
Aside the above-listed offerings, the facility shall be opened to other profitable engagements which shall provide an enjoyable and memorable experience to clientele whilst maximizing the capacity of the facility and delivering good returns for the business thereby creating a win-win situation.
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BUSINESS CONCEPT & MODEL- OPERATIONS
The facility intends to operate as follows for the Pay & Play business case;
The above is an assumption which will further accommodate other service offerings in between the business operation horizon. The above case was based on reasonable degree of certainty as per estimation for the case in particular.
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Operational Schedule | | |
Days | Mon-Fri | Sat-Sun |
Timing | 5pm-11pm | 7am-11pm |
Hours involved | 6 | 16 |
No of Days | 5 | 2 |
Total No. of hours/week | 30 | 32 |
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Fee per Patron | N 2,500.00 |
Est. Assigned hours for each Patron/day | 2 |
No. of Turfs (as per Two 5-aside Pitches) | 2 |
Minimum No. of Patron Per one-off Use | 10 |
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BUSINESS CONCEPT & MODEL- OPERATIONS
To keep the facility functioning post development, it is envisaged that the following hands shall be deployed for efficient running and management of the facility;
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Staff: | No. |
Facility manager/Gen Operator | 1 |
Security Guards | 2 |
Head of Admin/Accountant | 1 |
Groundmen | 2 |
Ticketers | 2 |
Sales supervisor-Refreshment Store | 1 |
Sales Assistants | 2 |
OVERVIEW OF ASTROTURF- BRIEF INSIGHT
Artificial turf is a surface of synthetic fibres made to look like natural grass. It is most often used in arenas for sports that were originally or are normally played on grass. However, it is now being used on residential lawns and commercial applications as well. The main reason is maintenance—artificial turf stands up to heavy use, such as in sports, and requires no irrigation or trimming. Domed, covered, and partially covered stadiums may require artificial turf because of the difficulty of getting grass enough sunlight to stay healthy. But artificial turf does have its downside: limited life, periodic cleaning requirements, petroleum use, toxic chemicals from infill, and some heightened health and safety concerns.
Artificial turf first gained substantial attention in the 1960s, when it was used in the newly constructed Astrodome. The specific product used was developed by Monsanto and called Astroturf; this term since then became a colloquialism for any artificial turf throughout the late 20th century. Astroturf remains a registered trademark, but is no longer owned by Monsanto. The first generation turf systems (i.e., short-pile fibers without infill) of the 1960s has been largely replaced by the second generation and third generation turf systems. Second generation synthetic turf systems featured sand infills, and third generation systems, which are most widely used today, offer infills that are mixtures of sand and recycled rubber.
A high-quality artificial turf system allows millions of football players to practise their sport in the best possible conditions all year round. That means no unplayable fields and abandoned matches anymore. Most current systems are based on a carpet with artificial fibres that is typically filled with a mixture of sand and rubber infill.
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OVERVIEW OF ASTROTURF – CONT’D
Artificial turf has been around for several decades and has been used for several sports – with varying degrees of success and intensity – since the first generation of 1960. The suitability of unfilled or sand-filled artificial turf systems for football was always heavily discussed and it is therefore only with the introduction of the third-generation systems (3G) that include both sand and rubber infill that the surfaces have become a true alternative.
It is in this context that FIFA acknowledges the potential of artificial turf for the development of football. Due to its resistance to weather and more intense use it qualifies as the best alternative to natural grass, judging from the following features;
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GLOBAL PERSPECTIVE ON 5 - ASIDE FOOTBALL- ASTROTURF
Five- Aside Astroturf football is the fastest growing form of football in the world. It is fast, skilful, exciting and dynamic, requiring quick thinking, sharp reflexes and a good fitness level. The popularity of the game can be measured by the fact there is a FIFA Futsal world championship, and a European Futsal championship. Both titles are currently held by Spain.
In England, five-a-side football has surpassed 11-a-side to become the most commonly played form of the game in the UK. The English FA has big plans for it's future development. In 2002, 4.4 million adults in England played five-a-side football, with over a million involved in league or cup five-a-side. The numbers are ever rising with the growth of purpose built facilities. (Source: English FA).
In Nigeria, less prominent are 5-Aside football tourneys which are organized using Astroturf pitches. Suffice to say, in Africa, this form of the game is yet to officially gain ground on the traditional 11-a-side version of the game. Project Trafford however recognizes that, unofficially the spirit of futsal is very much present in Nigeria. We only need look at street corners, roads, dirt pitches, pavements and any available space where African kids and adults have a kick about in groups of twos, threes etc.
Project Trafford aims to tap into this youthful energy and enthusiasm as well as the dearth of Astroturf pitches to develop the game in Nigeria. As a prospective facility provider, it intends to formalize and channel the energy from the streets of Nigeria into our purpose built arenas such as the proposed facility.
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NIGERIA ASTROTURF BUSINESS- MARKET OVERVIEW
The benefits and privileges of Astroturf or Artificial turfs have always been created by governments both at the national and the state levels with the investment of public funds in the development and introduction Astroturf pitches for international and local competitions for the benefit of its national teams.
Until recently, there were no such recreational facilities privately owned and managed by private bodies. Hence, there was a need to provide such facilities for individuals and corporate bodies within their very vicinity (i.e. neighborhood) to bring an exclusive and impressive facility to their use whilst making leisure and retreats worthwhile experiences under good and healthy and safe conditions.
The growing popularity and integrity of Astroturf pitches across the world and Nigeria inclusive have gravitated people towards such a facility. Also, are the accompanying recreational activities created such as the now popular 5-aside soccer tourneys, kids and adults soccer training programs just to mention a few.
Based on the foregoing, private bodies started developing Astroturf pitches to met the craving for recreational experience since soccer as been at the fore front of uniting people of different race, color, background and ideology whilst expending their leisure.
Astro Soccer Nigeria Limited (ASNL) as a company has since developed Astroturf pitches to bring Astoturf closer to the soccer loving people. The company came up with the Astro Soccer 2000 projects which has since manifested in the development and operation of Astroturf facilities in Ikoyi (Lagos), Abeokuta (Ogun) and Portharcourt (Rivers).
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NIGERIA ASTROTURF BUSINESS- MARKET OVERVIEW CONT’D
There is also Funturf International a company which equally is in the business of operating Astroturf facilities in Lagos. Presently, Funturf International owns and manages Astroturf facilities in Lekki Phase 1 and Ikorodu both in Lagos.
The two companies are in the business of developing sports infrastructures hosting and facilitating high caliber football experiences for a variety of companies, groups, and organizations having hosted some incredibly successful events.
Project Trafford intends to start off with its first Astroturf facility in Lekki and its adjoining environs. The increase in demand for the facility as evidenced by full booking all year round which has inevitably created a frustratingly huge inability for individuals and organizations to have access to reservations/booking for their programs in form of individual recreational needs and corporate retreats respectively.
The expansion of business activities evidenced by development of office mixed use real estate developments as well as other developments in Victoria-Island, Lekki and environs have been a major factor responsible for the splurge in the influx of residents into theses areas as the working class Lagosians want to live close to work. Hence, the recreational facilities have begun to experience strains on in terms of resources and schedules.
Presently, Lagos State has an estimated population of about 20million people stemming from its status of being the commercial hub of Nigeria and job/business opportunities it provides. Lekki , Victoria-Island and environs boast of over 3million people and its growing at a steady rate.
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NIGERIA’S MIDDLE CLASS
The Return of Middle Class It is generally accepted that there was a poverty trap in Nigeria created by the various economic crises experienced during military rule, and that this had a detrimental effect on the Nigerian middle class. The dramatic increase in economic hardship encountered by the vast majority of Nigerians and the detrimental impact that government control exerted on the Nigerian education system led to a thinning of the Nigerian middle class during this period. Those that could flee the country or more commonly sent their children abroad for higher education.
Roughly coinciding with the country‘s return to democracy in 1999, and spurred on by the global financial crisis, anecdotal evidence suggests that a significant number of Nigerian professionals have returned to Nigeria. These Nigerians have returned to take up roles in the banking, telecoms and oil and gas sectors mainly; others are embarking on more entrepreneurial pursuits or indeed running for political office.
There are no reliable statistics on the size of Nigeria‘s middle class but sales of consumer goods such as cars, smart phones, air conditioners, computers and satellite television decoders, as well as the growth in the number of private schools, hospitals, hotels, cinema multiplexes, shopping malls, clubs, bars and restaurants suggest that it is growing at a steady pace.
Emerging Consumer Class Coupled with the return of Nigerian middle class, the sustained economic growth of the Nigerian economy is lifting more and more people out of poverty and pushing many of Nigeria‘s population of 160 million into higher income brackets. A few anecdotes provide compelling evidence of this:
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NIGERIA’S MIDDLE CLASS
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OPERATIONAL STRATEGIES
In order to make Project Trafford as success story whilst managing effectively likely teething problems, the promoters intends to carry out catchy and far-reaching awareness through series of advert placements in both visual and print media alongside other platforms.
The promoters also will encourage corporate memberships amongst staff of organization resident within its facility location and also across Lagos.
Corporate Membership
Benefits of Corporate membership
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OPERATIONAL STRATEGIES
As far as the project’s branding and sponsorship are concerned being the live wire and soul of the project, the following shall be exploited and cashed in on;
Project Trafford will partners with various organizations to promote 5 aside football in Nigeria since its gaining popularity. The partnership involves the sponsorship for our various product offerings.
Sponsorship opportunities available to corporate organizations shall include:
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POSSIBLE INITIATIVES
Other sponsorship and branding opportunities available to corporate organizations include partnership in what we call our vision initiatives. Project Trafford would be delighted to have partners on the following:
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KEY CONSIDERATIONS
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KEY CONSIDERATIONS
This leverage risk during the current economic condition may also impose difficulties on the project’s ability to obtain finance at favourable terms, including Specified value, interest rate and duration of the loan as well as the required collateral.
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KEY CONSIDERATIONS
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KEY CONSIDERATIONS
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SWOT ANALYSIS
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Strengths
Weaknesses
Opportunities
Threats
MAINTENANCE & HEALTH, SAFETY & ENVIRONMENTAL POLICIES
The shall be a minor maintenance of the facility at off peaks or periods of less activities which shall be carried out by maintenance staff i.e. Ground men.
Aside the above-mentioned maintenance plan, there shall be a Maintenance Agreement with the developer for an agreed number of years to rejuvenate and keep the turf in good condition to forestall any likely injury or embarrassment.
The safety of clientele and staff is of great importance so as not to defeat the goal of the project. To this end, there shall be procedures to ensure that minimal injuries are recorded and that the host community is not negatively impacted upon. The following shall be the proposed HSE policies of the project but shall not be limited to;
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PROJECT’S ESTIMATED COSTS
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KEY FINANCIAL INDICATORS
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PROJECTED INCOME STATEMENT
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PROJECTED STATEMENT OF FINANCIAL POSITION
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PROJECTED STATEMENT OF CASH FLOW
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PROJECTED INVESTORS’ RETURNS AT A GLANCE
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KEY FINANCIAL PROJECTION ASSUMPTIONS
For the purpose of this financial projection, the average inflation rate was pegged at 8%. This was based on Central Bank’s efforts at maintaining the monetary policy rate (MPR) at 12% to curb inflation rate and better the economy as a whole.
Corporate Tax is 30%, whilst Education Tax is 2%. These are the prevailing Tax rates.
GDP Growth rate is estimated to be within the region of an average of 6%.
The projection is based on a daily patronage from 5pm – 11pm on Mondays to Fridays. This was informed by the view that working class peoples as well as kids and other adults would mostly come around after close of business of the day and after school hours.
Activities are billed to commence from 7am – 11pm on Saturdays and Sundays based on estimations. Based on the assumptions made, there exist a full capacity utilization for the facility @ 62 hours per week.
The above table explains the projected mode of operations of the facility.
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KEY FINANCIAL PROJECTION ASSUMPTIONS
Based on the construction configuration of the turf, 2 (Two) 5-Aside matches could be staged simultaneously. Hence, the assumed number of 2 (Two) turfs above.
It is projected that a patron will be entitled to a minimum number of 2hours per day in line with the Monday – Friday 6hours time lag and a 16hour time lag for Saturday – Sunday activities. Suffice to say that there will be a minimum number of 10 patrons per session going by the 5-Aside match arrangement per turf.
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KEY FINANCIAL PROJECTION ASSUMPTIONS
It is projected that revenues will be generated from sale of tickets as well as refreshments. As for refreshments, it is assumed that there will be a linear relationship between the sale of refreshments and the patronage i.e. it is expected that patrons will determine the level of refreshment sale.
The facility intends to charge a patronage fee of N2,500 per session. A session will only last for 2hours per individual
The following table explains revenue generation;
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KEY FINANCIAL PROJECTION ASSUMPTIONS
Revenue from sale of refreshment will follow the same pattern as the patronage. However, the refreshments and its estimated selling price e are provided thus;
This project shall be financed strictly and wholly financed using equity contribution from interested investors. The Cost of Equity is projected to be 22% as a minimum required rate of returns to investors.
It is projected that upon making profit, a projected/assumed rate of 60% of the Profit After Tax shall be made to investors. See Key Financial Indicator section
The land for the development of the facility shall be available through a lease arrangement for a minimum tentative period of 10years at a proposed rate of =N=4,000,000.00 per annum to allow for recoupment of investment.
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KEY FINANCIAL PROJECTION ASSUMPTIONS
The table above indicated the purchase of refreshments which shall be in sync with sales. Thus, it is assumed that sales shall match purchases giving no rise to closing stocks to simplify this projection. However, this assumption may not be true in reality but it doesn’t pose a misrepresentation.
It is assumed that pending the generation of revenue from the identified streams of income, there shall be a provision for working capital for at least 3months to ensure smooth and uninterrupted operation.
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ESTIMATED BUDGET SUMMARY FOR TURF CONSTRUCTION
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A TYPICAL ASTROTURF PITCH FOR RECREATIONAL ACTIVITY
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IMPRESSIVE TRACK FOR ATHLETICS
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PAVILLION/STANDS & RESERVE BENCHES
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