Patisserie Valerie reveals ‘devastating’ extent of accounting scandal
The company has hired advisers to review its options.
Patisserie Valerie has unveiled the “devastating” extent of the irregularities in its accounting, which included thousands of false entries into the company’s ledgers.
In a statement to the market, the cake chain’s parent company said an initial investigation pointed to cash flow and profitability being worse than previously thought when the problem was first discovered in October.
The firm has also hired advisers at KPMG to carry out a review of all its options as it seeks to “recover from the devastating effects of the fraud, and to preserve value for its stakeholders going forward”.
The business, which is chaired by serial investor Luke Johnson, said it will take some time before a reliable trading outlook can be completed.
It has also been in discussion with its bankers to extend a standstill of its bank facilities beyond the end of the week.
The discovery of a black hole in the company’s accounts in October last year pushed it into a crisis which saw it almost cease trading.
A rescue plan was passed by shareholders in November, resulting in the issue of £15 million worth of new shares.
Chief executive Paul May left the company later that month and was replaced by turnaround specialist Stephen Francis.
New finance boss Nick Perrin joined Patisserie in December, replacing predecessor Chris Marsh who had quit in October.
The latest update came just days after non-executive director James Horler left the company amid a wider shake-up.
On Wednesday, Patisserie said it has appointed a number of new members to its management team since the crisis.