Patisserie Valerie owner Patisserie Holdings has launched an investigation into what it has described as serious – and potentially fraudulent – accounting irregularities.
This company today (10 October) said the discovery of the issue has “significantly” impacted its cash position and may lead to a “material change” in its overall finances.
Patisserie Holdings chief financial officer Chris Marsh has been suspended from his role, and trading in the business’s shares on AIM have been suspended while it conducts an investigation
The company said it is working with its legal and professional advisers to determine its true financial position.
"We are all deeply concerned about this news and the potential impact on the business,” said Patisserie Holdings chairman Luke Johnson.
“We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible."
The company said it would make further announcements as the results of the investigation become known.
Update (10 October): Further to Patisserie Holdings’ earlier announcement, the board has since said it has become aware of a winding up petition filed at the High Court related to £1.14m owed to HMRC by Stonebeach Limited, the company’s principal trading subsidiary. The petition was advertised in the London Gazette on 5 October 2018, and the company and its advisors are addressing the matter with HMRC.
In May, Patisserie Holdings reported a 14.2% increase in half-year pre-tax profit to £11.1m on sales up 9.1% to £60.5m. It had opened 10 new stores over the period and was on track to meet its target of 20 openings across the full year. The business stated its openings were profitable from the first week of trading and were all funded from operating cash flows.
“We remain focused on organic growth and, with a strong balance sheet, continue to assess acquisition opportunities that will have a strategic and cultural fit,” said Johnson at the time.
Patisserie Valerie has a partnership with Sainsbury’s, and currently supplies cakes to 70 stores.