Patisserie Holdings plc (AIM: CAKE) (“PH” or the “Company”) announces today that, following the announcement on 10th October 2018 which concerned the evidence of fraud, and an emergency fund raising, the Company has appointed a new CEO, a new interim CFO, a new non-executive director, a new commercial director and a new production director, as well as other management appointments.
The work carried out by the Company's forensic accountants since then has revealed that the misstatement of its accounts was extensive, involving very significant manipulation of the balance sheet and profit and loss accounts. Among other manipulations, this involved thousands of false entries into the Company's ledgers. It will take some time before a reliable trading outlook can be completed while the above work streams progress
The initial indications from the work carried out to date is that the cash flow and profitability of the business has been overstated in the past and is materially below that announced in the trading update on 12 October 2018, which was based on limited work carried out over a 48-hour period.
The Company has hired KPMG to assist it in carrying out a review of all options available to it in order to recover from the devastating effects of the fraud, and to preserve value for its stakeholders going forward.
The Company confirms that RSM were appointed auditors today, but due to the fraud and attendant accounting issues it will be some time to complete a restatement of the Company's accounts and prepare the audited figures to 30th September 2018.
The Company has also been in discussion with its bankers to extend the standstill of its bank facilities beyond January 18th, and will issue an update when those discussions have concluded.