Patisserie Share Discussion Threads

[haroldthegreat] 10/10/2018 11:10

Perhaps Luke will refund his fees etc to top up the loss as it happened under his watch ! There again perhaps not.
One looks at directors reputations when buying shares and .........

[this_time_its_different] 10/10/2018 11:02

Someone has been cooking the books rather than cooking the cake. Stock is going to get destroyed on open, expect a big drop. RIP shareholders.

[ivor hunch] 10/10/2018 11:00

A bit of a blow for Luke Johnson who spends his life telling entrepreneurs how they should run their businesses. Maybe less time penning articles for the Sunday Times and more spent on examining the figures might have helped.

[barnetpeter] 10/10/2018 10:31

What price to return someone asked? About 150 to 180 is my guess. Rating is very high anyway and if the profits don’t really exist as stated then 60 per cent plus fall. The mkt can be nasty about any shocks like this because it wonders what else might be not true.

[jotoha2] 10/10/2018 10:23

The money has not been stolen , looks like Marsh has been cooking the books big time , he clearly is good with numbers ! especially for his own benefit.

[tabhair] 10/10/2018 10:21

It seems likely that the cash balance was there when Grant Thornton did their audit, but went missing in the period after.

Nothing they could have done in that instance to detect this.

[cockneytrader] 10/10/2018 10:16

No body would be stupid enough to steal £20m, would they?

[quepassa] 10/10/2018 10:07

I would like to hear an explanation from or interview with Luke Johnson.


ALL IMO. DYOR.
QP

[simso] 10/10/2018 10:01

We can only second guess what has happened here, with such scant information available. The best case scenario for Investors is probably that a recent and large fraud has been committed...£10-£20m of cash effectively "stolen" from the company. They find the culprit, some of the money is recovered. In the context of a £400m Market Cap company, the financial hit is relatively modest. The Profit Forecasts and "story" remain intact. Clearly some significant reputational damage, and a long slow recovery.

The worst case is that everything is overstated, and a proportion of the profits are not "real", and the forecasts therefore meaningless. The earnings forecast was on a high rating, so this would be a devastating scenario for the share price.

[rich1980p] 10/10/2018 09:57

Reminds me of Surrey Free Inns SFI from a few years back no one could spot that and everything looked fine on surface but it had grown too quickly without back office infrastructure to support. Aggressive capitalisation policy for fit outs plus cuttelry combined with messy and complex reconciliations around cash and debtors and cut off across period ends which meant when it was all unscrambled there was very little true profit or cash. Cash is easy to get wrong in retail as there is so much cash in transit, delays in getting in credit card cash, chargebacks etc etc

[phowdo] 10/10/2018 09:56

Thorntons are as useful as a chocolate teapot.

Oh and hows this for irony...

[buoycat] 10/10/2018 09:54

Don't know where sky gets the figure of £20 million since nothing stated in rns. Sounds like they are fishing

[owenski] 10/10/2018 09:48

Bit of a shock, never bought but had a look and thought the rating was always too high, great shops though, hope it gets resolved.

[lord gnome] 10/10/2018 09:43

Perhaps a bit harsh MrTenpercent. Perhaps it was the auditors checking the books for the year just ended that have found the black hole and reported it to the board. An auditor actually doing its job? Surely not.

[mrtenpercent] 10/10/2018 09:38

So yet again the private investors are let down by the auditors. How on earth can £20m+ (reportedly) go missing in a company of this size without being spotted?

Grant Thornton this time. I wonder if they will pick up chunky fees for investigating the hole in the accounts which their audit failed to spot?

[j777j] 10/10/2018 09:37

Re very hard to fake cash.Globo plc according to audited accounts had €104,000,000 cash in the bank.The directors admitted falsifying accounts and the administrators only found €17,000 cash !!!!!!!!The stock market is univestable

[ccnp] 10/10/2018 09:28

First noticed this cake shop 3 years ago when I was working near Victoria and looking for a cake. Did a Google and was utterly gob smacked to find a multi million pound listed business.

It didn't make sense then.

It makes perfect sense today

[barvin] 10/10/2018 09:14

So if there is a £20m black hole and it does come back from suspension, perhaps with a fundraising what price do we think it will settle at? Certainly got a premium P/E which will no doubt be lost now

[tabhair] 10/10/2018 09:12

Some people are jumping to conclusions here, I think. I have looked at the accounts, the business looks real, the balance sheet looks fine, the cash flows are good. £28m cash was reported as of the last interim numbers. It seems highly unlikely to me that this number was faked (very hard to fake cash!). My best guess is that between then and now, someone has somehow absconded with the £20m in cash that Sky have reported. Assuming that is the case, then the business here is fine and the auditors can hardly be blamed.

But let's see how it turns out.

[danny baker] 10/10/2018 09:11

Looking at the last interim and final results there are absolutely no warning signs of impending problems to alert investors. The areas which will need to be investigated are plant and equipment because it is a large amount and the imbalance between trade creditors and debtors. I don't know the business but I'm surprised to see trade debtors so high for what I assume would be a cash/card business. Trade creditors is a low amount but not unreasonable given the massive gross profit margins. Normally an astuts investor can pick up on things in the accounts which aren't quite right but whatever the problems are they have been well hidden from everyone including the board.

[thebossman] 10/10/2018 08:52

Follow the paper trail...

[jotoha2] 10/10/2018 08:51

Not one I have followed , but having gross margins of 70% plus looks rather nice , and an average turnover of £800,000 per unit is rather impressive , all very dodgy .