Patisserie Valerie on brink of collapse: Café chain needs ‘immediate injection of cash’

Patisserie Valerie said today it could shut down without an ‘immediate cash injection’ as the crisis over the £20million black hole in its accounts got worse.

The cake shop and continental tea room, which has more than 200 stores in the UK, is in financial peril and looks on the verge of collapse. 

In an extraordinary statement to the London Stock Exchange owner Patisserie Holdings said today that it found a ‘material shortfall’ in its fund.

It said that without an ‘immediate cash injection’, it believed that there is ‘no scope for the business to continue trading in current form’. 

Patisserie Valerie was founded by entrepreneur Luke Johnson, who was a millionaire aged 30 after floating Pizza Express – but up to £165million of his £260million fortune is believed to be tied up in his ailing cake shop.

There was no answer at his £5million west London home today – more than 36 hours after he revealed the crisis to the London Stock Exchange.

Patisserie Valerie (pictured in Soho) has suspended its shares following the discovery of a £20million black hole in its accounts

Patisserie Valerie (pictured in Soho) has suspended its shares following the discovery of a £20million black hole in its accounts

Yesterday it told it faces liquidation unless it pays a £1.14million unpaid tax bill – hours after a £20million black hole was discovered in its accounts.

It suspended its shares and its finance chief Chris Marsh amid the chaos with its books.  24 hours later it was handed a winding up petition from HMRC. 

The court hearing is scheduled for Halloween, October 31, and the high street cake and coffee shop is scrambling to ‘understand better the financial position of the group’.

If the bill remains unsettled HMRC could force the businesses to close in order to liquidate their assets and cover the costs it has been unable to pay. 

Earlier the business, set up by British entrepreneur Luke Johnson, said it had been notified of ‘significant, and potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company’s accounts’.

As a result, this has significantly affected the company’s cash position and may lead to a ‘material change’ in its overall financial position – and led to shares being suspended.

It asked that its shares be suspended from trading on the London Stock Exchange’s junior AIM market while it carries out a full investigation into its true financial position.

In addition, finance chief Chris Marsh has been suspended from his role. 

There was no answer when MailOnline called at Mr Johnson or Mr Marsh’s homes today. 

Chairman Mr Johnson said yesterday in a statement: ‘We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible.’

Mr Johnson is Patisserie Holdings’ largest shareholder with a 37 per cent stake.

In May, the firm reported a 14.2 per cent rise in pre-tax profit for the six months ended March 31, up from £9.7 million to £11.1 million.

Revenue climbed 9.1 per cent to £60.5 million, it said at the time.

Patisserie Valerie trades from more than 200 stores and also has a partnership with Sainsbury’s, with branded counters present in the supermarket. 

How Patisserie Valerie boss could lose up to £165m and wrote guide on how to spot fraud just a WEEK before ‘£20m black hole’ was found in firm’s funds

Patisserie Valerie founder and chairman  Luke Johnson revealed the potential fraud 

Patisserie Valerie founder and chairman  Luke Johnson revealed the potential fraud 

Luke Johnson is considered one of Britain’s most successful entrepreneurs and has built up a £260million fortune in food and drink.

But with Patisserie Valerie on the verge of collapse, the £165million stake he has in the company is in real jeopardy.

Married father-of-three Mr Johnson was a millionaire aged 30 after helping float Pizza Express and then later selling it off.

The chain, which is on almost every high street, had just 12 restaurants in 1993 when he took it on and within six years it had 250.

Shares in that period went from 40p to £9 each. 

He said that Patisserie Valerie was his ‘sweetest success’, and until recently its accounts appeared to reflect that.

But yesterday he revealed that there was a £20million black hole in its accounts and suspended its shares.

Patisserie Valerie’s potentially fraudulent accounting scandal is embarrassing for the chairman and majority shareholder, who claimed only last May the firm had a ‘strong balance sheet’.

And just a week ago he wrote about: ‘How to spot the next swindle’ in his £100,000-a-year Sunday Times column.

In a series of bullet points advising on avoiding fraud he warned: ‘Even clever investors sometimes fall for the most ambitious fraudsters’.

In his July column on cryptocurrencies, he called them ‘fraudster’s paradise’ and wrote: ‘If there is business, there will be frauds. I was reminded of this recently, when a senior manager at one of our companies admitted to falsifying invoices. He stole the money to cover his losses trading cryptocurrencies. This was a minor affair; the stuff that hits the news is much grander and more dramatic.’

There was no answer at Mr Johnson's £4million West London home today as the financial  crisis gripping his company became worse

There was no answer at Mr Johnson’s £4million West London home today as the financial  crisis gripping his company became worse

Copyrighted By Dailymail.co.uk. Source

Spread the love
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Related posts

Leave a Reply