CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Patisserie Valerie close to collapse

The café chain is desperate for a cash injection to stay afloat amid disclosure of 'potentially fraudulent' accounting practices

Kyle Rodda KyleR_IG
Market Analyst, Australia

Publication date : 2018-10-12T14:39:11+0100

Patisserie Valerie

Source: Bloomberg

AIM-listed Patisserie Valerie teeters on the brink of collapse unless it can secure a significant injection of capital after 'potentially fraudulent' financial irregularities created a £20 million accounting black hole.

Today, the company announced that its Chief Financial Director, Chris Marsh, was arrested Thursday evening and subsequently released on bail.

On Wednesday, after the company announced a temporary suspension of trading it was made aware that HM Revenues and Customs (HMRC) had filed a winding up petition to liquidate the company’s assets over an unpaid £1.14 million tax bill.

'The company and its advisors are in communication with HMRC with the objective of addressing the petition,' the company said in a stock market update.

'The company continues to engage with its professional advisers to understand better the financial position of the group and will make further announcements in due course'.

At its half-year results, the café chain reported profits of £47.1 million up 8.75% and net cash of £28.8 million, with an interim dividend of 1.44p per share paid in July. The company’s share price stands at 429p.

After discovering potentially fraudulent accounting practices, Patisserie Holdings admitted that it has impacted the company’s cash position and overall finances.

Patisserie Holdings board of directors, led by Executive Chairman Luke Johnson who controls a 37% stake in the company, are assessing all options to keep the business afloat.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Find articles by writer

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Professional Clients can lose more than they deposit.

The value of shares and ETFs bought through an IG stock trading account can fall as well as rise, which could mean getting back less than you originally put in. Please ensure you fully understand the risks and take care to manage your exposure.

IG does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. IG is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.

IG is a trading name of IG Limited a company registered at 2702 & 2703 Level 27, Tower 2, Al Fattan Currency House, DIFC, Dubai, United Arab Emirates. IG is authorised and regulated by the Dubai Financial Services Authority (DFSA) under reference No. F001780.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UAE and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.