The East Kilbribe-based group, which is one of the biggest firms of its kind, running 50 sites in the UK and the US, confirmed previous expectations for 2018’s results to be hit by the VAT misdeclaration, but added that new accounting policies meant that the current year’s results would be “materially below prior expectations”.
It stressed that investigations into the blunder were ongoing and warned that it may not be able to complete its 2018 audit by the 30 June deadline, but aims to complete the work “as soon as possible”. The group remains in talks with the taxman 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.
It is the latest blow for the company, in which Mike Ashley’s Sports Direct business empire owns a significant stake.
Earlier this month it emerged that chief executive Andy Anson was leaving to head up the British Olympic Association. The group said that Anson was committed to remain with the firm for the next six months to “assist in resolving its accounting and VAT issues”.
Chairman Michael Bolingbroke said: “The board respects Andy’s decision to take a role that is a once in a lifetime opportunity for him.”
In March, Goals revealed that it had uncovered “substantial” VAT accounting errors estimated so far at some £12 million.
It said its board had concluded that the VAT misdeclaration issues dated back several years, although the final value of the error is still being established.
The group, whose shares were suspended on London’s junior Alternative Investment Market (Aim), also warned at the time that new VAT accounting policies it plans to adopt were likely to have an impact on its future earnings.
Anson is to take up the role of chief executive at the British Olympic Association where he is already a board member.
In its latest trading update, the firm told investors: “The board can now also confirm that following extensive forecasting work on the financial year ending 31 December 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 31 December 2019 also to be materially below prior expectations and historically reported financial performance.
“Due to the nature of the historical accounting errors uncovered, the board has appointed forensic accountants, alongside its auditors, to investigate and report on historic accounting policies and practices used by the company in the recognition of revenue and the preparation of financial statements.”
Goals gave assurances that talks with lenders “remain positive” and noted that trading since 26 March has continued to be strong in the UK and US. It added: “The company will make further announcements in due course as the results of the investigation become known.”