Carlton Bingo, which has 11 clubs in Scotland, has posted a £1.5million pre-tax loss after seeing a £12.7m VAT windfall reclaimed by the taxman.
It cites continuing pressure on its customers' incomes, but has welcomed the reduction in bingo duty due in March.
The group saw turnover fall from £18.8m in the 15 months to March 2013 to £14m in the 12 months to March this year, according to accounts just filed at Companies House.
An operating profit of £6.3m reversed into a £1m loss, though gross profit was only down by 20per cent at £2.31m over the shorter period. A claim against HM Revenue & Customs in 2012 saw Carlton receive a £6m refund on past VAT payments plus rolled-up interest of £6.7m, powering the bingo operator to a £13.1m pre-tax profit for the 15 months to March 31 2013.
Now a court reversal of the legal position a year ago has seen Carlton repay £2.3m and plunge back into the red, though the Supreme Court is due to hear a final appeal on VAT law in April. Meanwhile he group has paid out a £6m dividend and made a further £1m pension fund contribution, following £3m the previous year, to bring the fund into balance.
Carlton runs clubs from Fraserburgh and Buckie to Dumbarton and Dalkeith, and its empire includes two in the north-east of England. The year saw its headcount come down from 355 to 327.
Writing in the strategic review, the directors say the underlying results "reflect the continued cost of living stresses being felt by our customers". But despite those headwinds there had been a small improvement in operational cashflow over the previous period.
They say the cut in duty from 20% to 15% to level the playing-field with online bingo will help an industry "suffering from the current trading conditions".
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