Goals Soccer Centres PLC (LON:GOAL) has issued a profit warning for its current financial year after an accounting error that saw its shares suspended from AIM in March.
The firm, which counts Mike Ashely’s Sports Direct International PLC (LON:SPD) as one of its biggest shareholders, said in an update that after “extensive” financial forecasting work it expected its fiscal year ending December 31 to be “materially below” prior expectations and historical performance.
READ: Mike Ashley-backed Goals Soccer Centres shares suspended due to historical accounting error
Goals added that its full year results for 2018, which have yet to be released as forensic accountants and auditors pore over the figures, were also set to be below expectations and that it may not complete its audit for the year by the June 30 deadline set out in AIM rules.
However, the company stressed that its trading since March 26 had “continued to be strong” in its UK and US markets compared to the same period last year.
The company’s issues stem from what it said was a “substantial mis-declaration of VAT, going back over several years”, which saw it facing an unpaid tax bill of at least £12mln.
The firm had already said it had identified errors in its accounts that would hit full-year earnings in a trading update on March 8, but did not reveal the full extent of the crisis until later that month.
The "mis-declaration" also meant the company had breached one of its bank covenants and it added it was currently in discussions with lenders to re-negotiate its facilities, although Goals said on Tuesday that talks with its lenders remained “positive”.
The shares were suspended on AIM on March 27 at 27.2p.