GOALS, the East Kilbride-based five-a-side football pitch business, has warned that the accounting error it is currently examining will affect its results for 2019 as well as last year.
The group confirmed previous expectations for 2018 figures to be hit by the VAT misdeclaration, but added that new accounting policies will also mean the current year’s results are set to be “materially” lower than expected.
It said investigations into the blunder are ongoing and it may not be able to complete its 2018 audit by the June 30 deadline, but aims to have concluded the work “as soon as possible”.
Goals remains in talks with HMRC over resolving the matter and to establish a final value.
Shares in the firm will remain suspended until there is further clarity on its potential liability and 2018’s accounts are published.
READ MORE: Football firm reveals £12m accounts errors
Goals said: “The board can now also confirm that following extensive forecasting work on the financial year ending December 31 2019, in which a number of new accounting policies, corrected accounting treatments and revised VAT assumptions have been adopted, it expects the financial year ending December 31 2019 also to be materially below prior expectations and historically reported financial performance.”
It gave assurances that talks with lenders “remain positive” and added that current trading has continued to be strong in the UK and US.
Goals said in late March the accounting errors were so far estimated at £12 million, with the issue dating back several years.
It had warned in early March over a material hit to 2018 profits after uncovering the accounting errors as part of a business review.
It delayed the publication of its full-year results, which had been due on March 12.
The news sent shares crashing on the day.
The unscheduled statement put prices into a 32 per cent freefall, instantly wiping £13.5m from the company’s stock market value.
The company’s shares were later suspended at its request.
READ MORE: Football firm chief quits to lead Olympic campaign
It has also since been dealt a blow with news that chief Andy Anson is to quit to become the new chief executive of the British Olympic Association. His departure date has not been announced.
Mr Anson is leaving the post after a year to take on the leadership role at BOA.
The firm said at the time it was disappointed by the move but added former Disney and Manchester United executive Mr Anson has committed to remaining on the company’s board for the next six months to assist in resolving accounting issues that it announced in March.
Goals, whose biggest shareholder is retail tycoon Mike Ashley, currently trades from 50 sites in the UK and US.
In January, Goals warned that profits would be lower after a revamp of its offering resulted in higher costs.
READ MORE: Football firm reveals mistakes in accounts
It also bemoaned slower than anticipated growth in the US, where the company has four sites, as well as economic and political uncertainty.
The firm said in is earlier statement that while the “accounting adjustments” are of a non-cash nature, it meant Goals was in breach of one of its banking covenants with Bank of Scotland.
It represents the second blow in quick succession for the company, in which Sports Direct chief Mike Ashley holds a significant stake.
Goals had also earlier revised its profit guidance for 2019 down by £600,000 “in light of the current economic and political uncertainty”.
The company made a pre-tax profit of £8.2m in 2017.
That year Goals signed a joint venture with City Football Group, owner of Manchester City under which the football giant committed to providing $16m to drive Goals’ expansion across the Atlantic. It earlier opened its fourth club in the US, in Covina, Los Angeles, and plans to launch an academy with Manchester City.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here