‘Going concern’ fear for Teamworks Karting

TEAMWORKS Karting, one of the few companies floated on the West Midlands online stock exchange InvestBX doubled its losses in the last financial year, prompting its accountants to question its viability as a going concern.

But founder and chief executive Simone Schettman told TheBusinessDesk.com that the losses were as anticipated following the company’s opening of two new tracks, both of which she claimed were now performing strongly.

The company, based in Digbeth, Birmingham, runs four tracks for electric karting activites around the UK. In the year to the end of February this year, it lost £53,800 after tax, more than double the previous year’s £23,500. Turnover rose from £892,000 to £1.2m but the new tracks saw costs rise from £879,000 to £1.1m.

In the company’s annual report filed at Companies House last week, independent auditors accountants Ormerod Rutter said Teamworks liabilities exceeded its total assets by £459,700, and this along with its trading losses, “indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.”

However, the company’s directors said they had concluded that they instigated  significant cost saving measures and had concluded they had a “reasonable expectation that the company will have adequate resources to continue on an operational basis”.

Chief executive Simone Schehtman said: “There’s no doubt it’s been very tough, particularly in Birmingham, where market conditions are squeezing our corporate business events, but with two tracks coming on stream and a recent equity issue, we’re confident that Q4 this year wil see profits improving.”

Ms Schehtman said the strategy for expansion through new sites was the right one in the long term. “We’re going for economies of scale,” she said. “Single track operators are having a very rough time of it at the moment, but we’re going in the right direction and looking actively at three new sites.”