Patisserie Share Discussion Threads

[cjohn] 17/10/2018 12:27

All PIs can do to avoid such swindles is take the involvement of certain entrepreneurs in a company as a red flag.


There are thousands of other companies to invest in.

[mrtenpercent] 17/10/2018 11:12

@Sleepy - Have to go offline now, will reply later

[sleepy] 17/10/2018 11:09

@Mr10%

I am very open to correction on this but I think LJ has made 2 loans of £10 million each to the company. One is repayable from the proceeds of the placing and the other in 3 years time

I don’t think he would have made those loans unless he believed that a) the company would avoid administration and b) that the company would have sufficient funds in the near future to repay the short term loan

[hvs] 17/10/2018 10:39

So who was paying the interest on this overdraft ??? or was it FREE of charge How was it recorded in the accounts ???

Does anyone know if it is FRAUD to issue OPTIONs to Directors on the basis of false information ? And then for them to sell in the market and bag the PROFIT

Is it FRAUD ????

[allstar4eva] 17/10/2018 10:29

The other thing is surely company bank statements are sent to the company. Multiple people need to have access to this information. It will be interesting to find out what has gone wrong here...

[hvs] 17/10/2018 10:23

So the auditors were running this cowboy outfit ???? Were they awarded OPTIONs for such stellar performance.

Bust in 4 years from IPO and no one no one knows nothing it was the MONKEY.

[hpcg] 17/10/2018 10:19

Some excellent commentary on this board in the last couple of days. With companies starting to go after auditors, and the latter already under pressure from public opinion they may have to start pushing back. For example If I were an auditor I would from now on be noting in my opinion if a trading subsidiary had refused to publish a cash flow statement. One of the best general outcomes is if this pro-fraud decision by the FRC could be reversed.

[hvs] 17/10/2018 09:57

Was the £ 28mill there ??? Was it ??

Then it is a £ 10 mill overdraft. They was going to make £ 31 mill in year to September then they says £ 12 mill now it seems they say they know nothing only PwC knows , did they lie on Friday when they said £ 12 mill ??? Was tha a lie ?

What a shambles in a Company once valued at £ 450 mill with OPTIONs and CAKE galore.

[allstar4eva] 17/10/2018 09:55

If you had 28m in an account wouldn't you check the balance from time to time?

People should go down for this. If a company states it has 20 odd mil in cash this isn't something that investors should need to second guess.

[hvs] 17/10/2018 09:53

I would want to know how the bank account at Barclays was opened.

If I was CAKE I would refuse to honour the overdraft. lol !!!!! Its always someone else , the auditor , the bank and never the GREEDY IDIOTS who all let it happen. Like
I say the organ grinder goes not be boss not it was the monkey that did it.

[hvs] 17/10/2018 09:51

Quoting from article in The Times today :

On Friday the company said that a preliminary analysis (they did not mention how preliminary was it a back of the envelope job) for the year to the end of September would achieve underlying earnings of £ 12 mill (before exceptionals) and revenue of £ 120 mill.

However , now it says that the restated forecasts were on limited work pe4rformed to date and CANNOT BE VERIFIED until there has been further work. suggesting IT BE WEEKS OR EVEN MONTHS before PWC can VERIFY any figures.

At present the Directors donot expect the suspension to be lifted until figures are verified and the finncial reporting function is appropriate for a quoted company.

Investors are asking what the deputy Chairman Lee Grinsberg was upto ??? Most probably collecting his dosh.

[zho] 17/10/2018 09:36

Johnson has egg on his face over Patisserie borrowing

“I didn’t even know there were bank overdraft facilities,” said Luke Johnson at the weekend, talking about how on earth Patisserie Holdings, where he is the long-standing executive chairman, could report net cash of £28.8m in May but confess to having net debt of £9.8m last week.

His declaration of ignorance was too loose. Under “liquidity risk”, page 10 of Patisserie’s 2017 accounts clearly stated that “short-term flexibility is achieved by overdraft facilities”. Page 38 recorded zero borrowing at the balance sheet date but repeated the information that the group “has a short-term overdraft facility in place”. Page 39, while stating that cash balances fund normal trading activity, added: “The group also has access to both short-term and long-term borrowings to finance individual projects.”

So what, precisely, was Johnson claiming in the Sunday Times? Was he saying that separate borrowing facilities were set up without his knowledge? Or was he conceding that he didn’t know the true state of the authorised facilities? There is a big difference between the two positions.

[mrtenpercent] 17/10/2018 09:25

@Cryptotrade -

What seems likely is that nobody on the board (except perhaps one director) knew of the hidden overdrafts. But did the board know of the accounts on which the overdrafts existed? Two alternatives?
(a) Nobody on the board (except perhaps one director) knew of the existence of the accounts - in which case how were they opened without the directors knowing? A company of which I'm a NED had to open a new bank account a couple of years ago. The bank demanded to see for every director their passport (I think they accepted scans of the ID page) and a recent utility bill, and every director had to sign the mandate. The mandate signatures and the utility bills could in theory be forged but I'd have thought it would be more difficult to forge a passport. Were these accounts opened a long time ago under less stringent rules?
(b) Everyone on the board knew of the existence of the accounts (but not the overdrafts) - in which case why wasn't the Audit Committee aware that overdrafts had built up on these accounts?

I'm trying to develop Questions A4 and A5 on - I'm not sure I'm framing these questions quite right yet.

[rcturner2] 17/10/2018 09:24

I would want to know how the bank account at Barclays was opened.

If I was CAKE I would refuse to honour the overdraft.

[mrtenpercent] 17/10/2018 09:11

@Sleepy - thanks.

"From a practical perspective, given how the City works these days, I think Luke and the brokers did a good job in getting necessary financial support quickly though I appreciate that certain institutions were favoured to the possible detriment of existing shareholders" - yes but if Johnson's £20m loans existed and were enough to continue trading why did the placing have to be rushed through? As to being "favoured" one has to accept that the shares may languish below the placing price for some time so I'm not sure how much of a favour it will turn out to have been. I'm wondering if a lot of institutional holders will sell at any price when the suspension is lifted, just so they don't have to show this company on their books.

[cryptotrade] 17/10/2018 08:47

The auditors only know what they are presented with. They normally ask the main banker , HSBC what accounts do you have?The hidden account is Barclays . The fact it's not recorded, linked to the public accounts means the accounts have been fudged to disconnect itself from the business. It's clear. So at least one or two directors know about this. Why they did it, well, maybe they wanted a temp bridging loan but didn't disclose it. The reality is, auditors only know what's presented. As long as they have letters signed from the bank HSBC and the directors, they're covered. Barclays I suspect was a hidden account and possibly if you're saying it's been there since IPO could have been used as a cash balance boost at the start on IPO. Who knows. Maybe a shareholder suggested it on IPO.Gawd who knows but it's fraud. I don't hold.

[hvs] 17/10/2018 08:25

Looks like all accounts from IPO were not in order . Read this :


Stricken café chain's shares are locked in freezer | Business | The Times




A total basket case , seems like it was the monkey after all.

[chutes01] 17/10/2018 01:15

back to 10p

[eeza] 16/10/2018 22:05

"the company has taken advantage of all disclosure exemptions"


Quite.

[sleepy] 16/10/2018 21:57

@Mr10%

I think they are all good and valid questions.

For me the big issue is, assuming that there was fraud over a considerable period, how this was not spotted - either by Directors or auditors

This could be a tipping point for auditors (note departure of Grant Thornton boss) and also corporate governance - where currently non-execs are meant to be supportive of a company’s executive and simultaneously act to police them in areas such as remuneration

From a practical perspective, given how the City works these days, I think Luke and the brokers did a good job in getting necessary financial support quickly though I appreciate that certain institutions were favoured to the possible detriment of existing shareholders

Best of luck

[gowlane] 16/10/2018 21:56

Indeed, very standard no doubt, as evident from note 9 in the accounts:

“In preparing these financial statements the company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore these financial statements do not include: A statement of cash flows and related notes... “
Etc.,

So the question being posed is whether it actually should be standard practice to exclude this cash flow statement from the subsidiary accounts?

It seems that a bit of this 'light touch' regulation idea has crept in everywhere, didn't work too well with the banking sector though.

[thegreatgeraldo] 16/10/2018 21:53

The published accounts for '17 did include a cashflow statement....



(sitting above "Notes to Preliminary Accounts"



I think the distinction between audited & unaudited in this instance is a bit pedantic ;-#))

[mrtenpercent] 16/10/2018 21:43

'...I noticed when looking at the 2017 audited accounts that there is no cash flow statement provided.' 'You don't need to prepare a cash flow statement in subsidiary accounts where its included in the group cash flow statement. Very standard.'

Regarding cash flow in general, I think the cash flow statement is the most important element in ANY set of accounts. "Turnover is vanity, profits are sanity, but it's cash that pays the bills." I feel slightly nauseous when I read most company accounts these days with all their adjustments and "normalisation" and their implied disdain of GAAP. I wish I had a time machine so that I could go back and strangle at birth the charlatan who invented the concept of EBITDA.

[topvest] 16/10/2018 21:07

You don't need to prepare a cash flow statement in subsidiary accounts where its included in the group cash flow statement. Very standard.