Patisserie Share Discussion Threads

[sleepy] 29/10/2018 15:42

Why are the Sunday Telegraph and Mail on Sunday saying the Patisserie Valerie meeting is on Friday?

It’s actually at 9 a.m. on Thursday!

[owenski] 28/10/2018 10:20

Hope I haven't missed it, but I couldn't find Luke Johnson's riveting column this week in The ST. Where he tells everyone how clever he is and how to jolly well be like him if you want to be clever and successful. Have they axed the column? Can't think why.

[bigbigdave] 28/10/2018 07:27

David Scott eyes bid for Patisserie Valerie

A veteran restaurateur has declared an intention to make a takeover bid for Patisserie Valerie, the troubled cafe chain whose shares have been suspended since a £40m hole was found in its accounts.

David Scott, who used to run Druckers Vienna Patisserie, a Birmingham-based group of cafes sold to Patisserie Valerie in 2007, said he had backing from a family-run private equity firm.

[mrtenpercent] 27/10/2018 22:42

@Pugugly - yes, could be something like that. A variation on the theme would be paying genuine invoices from the No.2 account and never writing them up in the Group's bought ledger. I think I mentioned something like that earlier. This would inflate the Group's gross profit margin and feed through to an inflated bottom line - and we all recognise (belatedly) that perhaps the biggest red flag was the GP% which was way out of line with all competitors. As I said before, it would only need a reasonable sample of suppliers' statements to reveal that not all invoices were being recorded.

But I don't really care what the fraud was, and I don't care what part Chris Marsh or Luke Johnson or anyone else played in it. All I care about is the audit failure, for the reasons I gave previously. To which I would add that there's a lot of corporate bonds coming due in the years ahead, which can't all be paid from free cash flow or share issues, and if lenders start to distrust published accounts they might be reluctant to roll these debts over - and then we get credit crunch v.2.0 (which I think would be as bad as v.1.0).

[diku] 27/10/2018 20:22

Do you know of any insider within Plc casino markets that has been bluntly sacked?...they will given all the grace period to step down rather than be sacked for wrong doing or a non perfomer...why is the system set up in a such a way?...a win win situation and never short changed with the remuneration package...

[panic investor] 27/10/2018 18:54

Spot on - remember Quindell .... caugh splutter ..... he and his family are trading again selling medical stuff .... it will continue I assure you

[thegreatgeraldo] 26/10/2018 23:37

Let's imagine one of the directors was behind the misreporting of the accounts.... any profits made from exercising & selling options in the company would surely be proceeds of crime & hopefully treated as such. As you say, not much consolation for shareholders who've been fleeced.

[thegreatgeraldo] 26/10/2018 18:39

Did you miss this morning's RNS?

[sikhthetech] 26/10/2018 18:22

Chris Marsh 'resigns' from PV!!!
with immediate effect

Patisserie Valerie's finance director resigns amid fraud allegations

[lefrene] 26/10/2018 16:56

I built up an employment agency from nothing. It took me the first 8 weeks to realise that the book keeper was robbing me, after that I kept a spreadsheet and also created another system for monitoring employee hours that also calculated the wages and produced my invoices including the VAT. I was always on top of the financial position, everything got paid on the dot, and I knew who had not paid me and what they owed, and the total of what I was owed by all customers, on a running daily basis. So I knew exactly where I was with the finances, but I never was able to make sense of the accounts as presented by my firm of accountants. But as they were clueless about the realities of my business I suppose that made us quits, except that they would sometimes try to interfere with uninvited 'helpful' suggestions.

[thegreatgeraldo] 26/10/2018 16:28

Who knows, the whole thing could have started by accident..... some item(s) missed out from the accounts & rather than fess up, whoever (the FD?) decided to cover it up. To keep the mistake hidden, the false reporting escalated, in step with the size of the company.

Common sense suggests that if anywhere near £40 million had actually been stolen, whoever was responsible would have legged it by now.

[lefrene] 26/10/2018 14:47

I have in the past taken on several people who came to me from other employers who had been on emergency tax for extended periods (over a year), I remember from 20 years ago one chap getting over £3000 back in a tax rebate from my wages department. It seemed a fairly common thing back then having companies run up to the VAT cash accounting threshold and simply roll everything into a new company and set the old one to one side until the maximum 20 months had elapsed before the accounts finally had to be presented. The biggest debtor was invariably HMRC!

[thegreatgeraldo] 26/10/2018 14:27

!! HMRC were suing for tax that hadn't been paid, not tax that had been evaded. Unless you know/think differently?

[sandy133] 26/10/2018 14:26

The tax underpaid wheeze was how another very well known retailer was defrauded in a similar fashion.Up until the letter seeking a winding up from the HMRC in respect of underpaid VAT the entrepreneur assured me that his FD was brilliant.He would not ever spend £10 without getting the guys OK.
He had knicked £10 million and got 4 years.As normal in these cases no money was returned

[sikhthetech] 26/10/2018 14:15

"Is it possible to present accounts that look as if you have paid tax, when in fact you have not? Such as deducting tax/NI from wages, but diverting it away from HMRC by substantially under paying? "

The HMRC did have a winding up order over unpaid tax, so very possible...

[lefrene] 26/10/2018 14:11

The nature of the business is simple, and with modern technology each outlet should be reporting daily sales and daily purchases, plus outgoings in rent, rates, power consumed, water, wages and tax liabilities. There are no complex contracts for complex things where unknowns might arise. I suspect that the likes of McDonalds know exactly where each outlet is at, and where the whole business is at, at the push of a button at any time of the day. Whatever has gone on at CAKE seems beyond incompetence, the easiest thing to hold back on is taxes, and as suggested here that £10 million of overdrafts was likely to do with paying tax, but keeping as much as possible away from denting the claimed net profit.

Was it a wheeze, hoping that over time as the business grew that savings from economies of scale would be such that they could quietly pay down the overdraft?

Is it possible to present accounts that look as if you have paid tax, when in fact you have not? Such as deducting tax/NI from wages, but diverting it away from HMRC by substantially under paying? Or keeping a lot of staff off the books by using a lot of part timers? This will likely turn out to be a case of 'hiding in plain sight' when the truth emerges.

[thegreatgeraldo] 26/10/2018 13:47

From 12th Oct update,

" The Directors estimate that based on current run rate information available, annual revenue and EBITDA, before exceptional one off costs, for the year ending 30 September 2019 could be approximately £120 million and £12 million, respectively. However, the Directors emphasise that these statements and amounts are based on the limited work performed to date, and cannot be verified until there has been a further work conducted including the re-audit of the Company's financial statements and the preparation of the 30 September 2018 year end audit."

Interims suggested £60.5 mill t/o & ebitda of £13.4 mill

[dmipne] 26/10/2018 13:26

Thanks TGG. That supports my theory that the secret overdraft could have been used to pay vat bills and the the figure in the accounts includes some gross turnover, not net.