In its last financial year the listed Gold Brands, best known for its Chesanyama fast food chain, "did not make payments relating to Value-Added Tax and Employees Tax to the South African Revenue Services", the company's auditors disclosed in annual results released on Monday.
Auditors Nexia SAB&T also warned that, even though Gold Brands management was working on securing money, plans were not yet "sufficiently advanced to allow us to confirm or dispel whether" it is appropriate to treat the company as a going concern.
But its management remains optimistic, especially about new lines of business, even as the number of its flagship stores has plummeted.
At the end of June 2016 Gold Brands reported it had 301 Chesanyama stores. On Monday CEO Praxia Nathanael told Business Insider South Africa there were now 141.
Gold Brands has previously promised investors it would take the Chesanyama "braai" concept to the United Kingdom. It now plans to import several new UK concepts. Las Iguanas, a chain that promises an "irresistible bolt of Latin American energy", got its start in Bristol; Café Rouge, a "French bistro red wine bar" was launched in Richmond in London; and the American-themed Ed's Diner restaurants, which Gold Brands aims to expand, came from London by way of Pretoria.
Nathanael would not say how many sites had been earmarked for such restaurants.
Nor would she say what portion of its taxes the company had failed to pay, leading to the warning from its auditors.
"We are in negotiations with Sars for payment on all companies, however, certain companies payments are being made by arrangement," she said.
Remarkably, although Gold Brands reported a 72% plunge in year-on-year revenues, its gross profits were relatively stable – and its loss for the year was one-third what it had been in 2017.
Its numbers also showed a tax gain of nearly R83,000 for the year.
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