Auditors from BDO Stoy Hayward have uncovered a £2m earnings overstatement at
Sandcity, a subsidiary of outdoor goods chain Blacks Leisure that distributes
and retails O’Neill Boardwear.
The overstatement, which has led to the suspension of Sandcity managing
director Darren Spurling, was uncovered when BDO were called in after an
internal review exposed discrepancies in the accounts.
‘The group’s auditors were asked to assist in establishing the nature and
extent of the problem. Those investigations are continuing, but it is now
apparent that over at least the two financial years ending February 2008, the
performance of Sandcity has been overstated by a cumulative amount of
approximately £2m,’ Blacks Leisure told the stock market this week.
The problems mean that pre-tax profits are likely to come in £1m below
expectations in the financial years ending in 2008 and 2009.
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