Hi, it's Paul here.

Please see the header for the results/trading updates today which have caught my eye. I''m on a tight timetable today, so will work my way through as many of those as possible, before I have to head off around noon, to an investment seminar.

Goals Soccer Centres (LON:GOAL)

Shares suspended

I think this is probably the end for shareholders here. The company has today announced a "substantial mis-declaration of VAT" estimated at £12m. Presumably that means underpaid VAT. The shares are now suspended.

The Company intends to enter into discussions with HMRC immediately and remains in discussions with our lenders to agree new facilities.

Good luck with that.

I'd be amazed if the bank is prepared to continue supporting this business, now that it has become clear that the books were incorrect, by a substantial amount, over several years. Worse than that, the company's announcement today appears to be disclosing what might be VAT fraud, or at the very least, gigantic errors.

It seems improbable to me that a business of this small size can accidentally underpay £12m VAT. That's serious incompetence, possibly worse. We don't yet know the full facts, so I'm basing the above on what we've been told so far.

I imagine administration is almost certainly the outcome here, which would be a 100% loss for shareholders.

So here we have yet another accounting scandal. As we always seem ask - why didn't the auditors pick up the errors earlier?

Note that the long-standing (since 2000) CFO, Bill Gow, stepped down in July 2018. Once again, an unexpected departure of a CFO, turned out to be the precursor of trouble ahead.

Current trading is strong, but that doesn't really matter, given the problems above.

I warned here on 8 Mar 2019 that this share was uninvestable, when accounting problems were first disclosed. The moral of the story seems to be that, when any kind of accounting problems surface, the safest thing to do is to hit the sell button as quickly as possible, and definitely don't average down.

The only recent exception to that rule that I can think of, is Staffline (LON:STAF) - where its accounting problems turned out to be minor, despite a long suspension of its shares.


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