By Ian Neubauer

Independent auditors for National Leisure and Gaming (NLG) have said the pub owner may go under if it does not improve profitability.

“Should the group not achieve improved trading results or continue to have the support of its financiers or be able to obtain sufficient alternative funding… there is significant uncertainty whether it will be able to continue as a going concern,” said Pitcher Partners partner, MW Pringle.

“If the going concern basis is found to no longer be appropriate, the recoverable amounts of the assets shown in the balance sheet are likely to be significantly less than the amounts disclosed.”  

The auditor said the risk lies with NLG’s high debt ratio. The company owes $192 million in debt but owns only $19.5 million in assets, while its finance costs increased by more than 20 per cent in the first half of this financial year.

The warning was issued to NLG shareholders along with the company’s latest financial report, which showed a loss of $8.5 million for the six months ended December 28.

NLG’s board of directors said they were pleased with the result as they had expected a greater loss. It said gaming revenue had increased 12 per cent compared to the corresponding period in 2008 and that wage costs had been slashed by 10 per cent by means of redundancies.

NLG managing director Andrew Jolliffe was contacted by TheShout for comment today (May 1) but did not reply before this story went online.

NLG shares were trading at .07 cents at midday today (May 1). The shares have not moved in value in the past seven days.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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