Goals Soccer Centres: Football firm makes profit warning after accounting own goal

0
42

Five-a-side football firm Goals Soccer Centres has issued its second profit warning this year after it uncovered accounting errors.

The company has said its 2018 full-year results will come in “materially below expectations” and its reporting date of 12 March will be delayed.

Shares in the pitch operator, which has more than 50 sites in the UK and California, crashed by 46% in initial trading in response to the news. They ended the day down 32%.

The East Kilbride-based group said it was working with its auditors to resolve the mistakes and were reviewing some “accounting practices and policies”.

The firm also said that while the “accounting adjustments” were of a non-cash nature, it meant it was in breach of one of its banking agreements with Bank of Scotland.

“We are in discussions with the bank with a view to agreeing renegotiated facilities,” Goals said.

It is the latest blow to the company, in which Sports Direct boss Mike Ashley holds a significant stake.

In January, Goals warned profits would be lower after a revamp of its business resulted in higher costs.

Goals also highlighted slower than expected growth in the US, as well as economic and political uncertainty.

However, the group reported its performance has been strong in the first two months of the year, with an increase in like-for-like sales in both the UK and US.

Paul Hickman, analyst at Edison Investment Research, said: “Importantly, the company says that ‘the majority’ of the accounting adjustments are non-cash, although that implies that a minority of them do affect cash.

“However, the wording implies that this is not a fraud issue on the lines of Patisserie Valerie.

“The restatement of accounts on other measures (such as profitability) puts Goals in breach of bank covenants, an issue that shareholders thought it had put behind it. Forced negotiations with banks in this situation invariably result in punitive terms.”

(c) Sky News 2019: Goals Soccer Centres: Football firm makes profit warning after accounting own goal

This site uses Akismet to reduce spam. Learn how your comment data is processed.