Goals Soccer Centres warns on profit after 'accounting errors'

Five-a-side football company Goals Soccer Centres has issued a profit warning and says it has uncovered "accounting errors".

It says full-year results will be "materially below" expectations, and it will delay the results' publication.

The firm, which operates 50 outdoor football centres in the UK and California, said it was also having to renegotiate the terms of its loans.

Shares in the company plunged over 30% in early trading.

The news will be a blow for Sports Direct boss Mike Ashley who owns over an 18% stake in the firm.

The accounting error means it broke the terms of its banking agreement.

The company and its auditors are reviewing its accounting practices and policies.

"It is likely that the board will take a more prudent approach both for 2018 full year results and going forward," it said.

Debt burden

In January, the East Kilbride-based firm warned on profits after it said that selling food and drink, and offering children's birthday parties, had increased costs as it had to hire more staff.

In spite of this, it had still estimated profit for 2018 of between £4.3m to £4.5m, figures which are now in question.

Goals Soccer Centres has about £29m of debt and is allowed by its bank to have borrowings of three times its earnings before tax and other adjustments. A dip in those earnings would therefore imperil this agreement.

The company said trading in the first two months of the year had been "strong with an increase in like-for-like sales, in both the UK and US, over the comparable period in 2018".

Goals has been upgrading its pitches and plans to launch a new football academy in the US with Manchester City.