Goals Soccer Centre, the East Kilbride-based five-a-side football pitch operator, has been sold amid revelations that its tax bill may be as high as £40 million as the result of ‘improper behaviour’ by bosses.
The embattled business, which has been reeling from the fall-out of an accounting blunder first discovered in March, has been acquired by NorthWind 5s, a new company backed by Inflexion Private Equity and Soccerworld.
The transaction will be effected through a pre-pack administration by administrators at Deloitte and will secure some 750 jobs.
Founded by Ian McDermott in 1990 and sold in 2000, Goals will now return to the family’s ownership after being purchased by his sons Barry and Ian McDermott, supported by funds from the McDermott family and Inflexion Private Equity.
In a stock market update Goals, which operates around 50 five-a-side sites in the UK and the US, revealed that “the profits of the business may have been overstated by as much as £40m since 2009”.
Its tax bill was previously believed to be in the region of £12m.
Goals shares were de-listed from London’s junior Alternative Investment Market in September after it failed to resolve its accounting issues by the stock exchange deadline.
The business said it expects underlying earnings for the full-year to come in at around £3.8 m, excluding “significant advisor fees associated with managing the current issues”. Its group bank debt currently stands in the region of £30m.
Goals said: “It is very unlikely that shareholders of Goals will receive any value for their shares. This outcome is a matter of deep regret for the board, but as previously outlined the nature of the inappropriate accounting (going back to at least 2009) and the VAT-related issues means the business has been significantly less profitable than previously believed.
“At each and every step of the way the board has done everything in its power in combination with its advisers to ensure that it took steps to deliver the best outcome for the company and its stakeholders.”
Barry and Ian McDermott, who were advised in the transaction by Anderson Strathern and Stevenson & Kyles, said: “We’re delighted to be returning to the business, started in partnership with our father Ian over 30 years ago. The business has grown across the UK and into the US, an exciting market where there’s potential for significant growth.
“We’re excited to be back at the helm of Goals, and with our investment partners Inflexion Private Equity, look forward to growth on the back of the popularity of 5 -a -side football, especially in the US, where Goals is already in a joint venture with City Football Group.”
The McDermott family have wide interests in property and other leisure businesses including Soccerworld football pitches, for which they currently run five outlets in Glasgow, Dundee, Inverness, Carlisle and Newcastle, and Great Western Golf.
Mike Ashley’s Sports Direct – Goals’ largest shareholder – had been mulling a £4m swoop for the business, but later declared it had no intention of making a bid as Ashley accused its management of wiping out shareholders through “skulduggery”.
Source: The Scotsman