Bingo group confident despite auditor warning
BUCKINGHAM Bingo has been battered by the smoking ban, taxes, auditor warnings and bad weather – but its chief executive is still confident of its prospects.
Andy Cunningham told TheBusinessDesk.com that trading was “materially ahead” after several years of upheaval blamed on the smoking ban and the introduction of – and subsequent rises in – gross profit tax (GPT) which replaced bingo duty.
Accounts just released for parent company Full House Holding’s year to March 31, 2009, show the group, which operates nine bingo halls, breached banking covenants in December that were agreed following a major debt restructuring in 2008.
Its banker Barclays is standing by the Manchester-based business after it renegotiated property agreements in a bid to stem costs. But auditor KPMG warns: “There can be no certainty in relation to the continue support of the bank and therefore the directors have concluded that a material uncertainty exists that may cast significant doubt upon the group and parent company’s ability to continue as a going concern.”
Nonetheless Mr Cunningham said: “After two period of the new financial year trading is materially ahead of last year. Whilst not wanting to tempt fate I’m cautiously optimistic about 2010-11.”
In the year to March 2010 Mr Cunningham said revenues were hit by the recession and the bad winter weather but the business was in better shape after renegotiating four “onerous leases” and closing bingo halls in Didsbury, Manchester and Hunts Cross, Liverpool.
The accounts for the year to March 2009 show Full House reported a 19% drop in revenue to £27.1m. Pre-tax losses came in at £13.6m, down from a loss of £88.6m the previous year which was largely due to impairment write-downs. The company said operating profit before exceptional items was £500,000, up from a loss of £400,000 last time.
Buckingham Bingo was founded by entrepreneur Panico Panayi in 1970, who sold it to Alchemy Partners for £90m in 2005. Alchemy wrote off most of its stake in the firm three years later and the business was handed to the London-based restructuring unit of venture capital firm Barclays Ventures.
Full House has submitted a number of claims for overpayment of VAT to HM Revenue & Customs (HMRC). It has received a refund that is being challenged by HMRC, which has prompted a warning from directors that they will need more bank finance if the appeal is successful. Mr Cunningham said he was still awaiting a decision from the European Court of Justice.
