Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Crook and BHS? Are we talking of Philip Green (I wont use his title) or Dominic Chappell? I am no fan of the latter (in fact I know little of him), but I believe the latter ended up in the Courts while the former still commutes between his tax haven in Monaco from London and back in his private jet. Don't you just love justice?
Bobsto12
Yes, true - I should have said potentially profitable - if you just take the business at face value they are producing and selling their cakes etc at very high margins - they have good control of staffing levels in store and they seem to be popular with the punters - winning formula.
If I was a private equity investor and the business was being offered as a going concern at a cut price that would be a very attractive package.
I thought the Luke Johnson guy was a rich mogul, all hype hey! They all want to rip-off private investors........thank god BHS went bust before that crook could list it on AIM.
I will be trying to do the same thing myself......float a local chippy on AIM........haha!
Lying Johnson should take CAKE private for IPO price or worse at 50p per share if he actually has any money.......
If this ever comes back - the market value will not be at £583 million (pre suspension level) that's for sure .. so many questions - not many answers...
I don't think anyone has any idea how profitable it is. It may never have made a profit for all we know.
It is difficult to see any other option to administration now and a cut price sale to private equity.
I guess the business will continue as it is now with new private equity owners after administration because the actual profitability is very good.
Once again the shareholders loose out - should be an enquiry for this one though.
I suspect the KPMG team are from restructuring as opposed to forensic accountants Their job will be to tell banks how it looks so they can decide whether to pull plug or not My guess is that administrators will be appointed because there are plenty of other coffee shops and how do you persuade people to back a business with an unreliable track record Sad for employees and shareholders. Hope I am wrong and shareholders get chance to get back some of their cash.
you should invest in brown envelopes - guaranteed profit
Presumably the KPMG investigative accountants will go back to pre-IPO financial records? I would imagine HMRC would be interested here plus a whole bunch of legal eagles for the banks, NOMAD, shareholders, FCA etc etc etc.
If it turns out the figures used for justifying the IPO were also wrong then
Luke
Johnson is going to have to pay it back.
Well said. I learnt to avoid ipo's years ago. All overpriced.
The walls are closing in:
The scandal-hit cake chain Patisserie Valerie could go bust tomorrow if emergency talks between leading shareholder Luke Johnson and its banks fail.
The entrepreneur has been scrambling to extend a standstill agreement on the company’s bank facilities, which expired on Friday. If he fails, HSBC and Barclays could demand repayment of £9.7m of overdraft debt.
Johnson could be forced to plough in more cash to stop Patisserie Valerie tipping into administration, with 2,800 jobs at risk.
He put in £20m of his own money to keep it afloat after the shock discovery in October of a £40m hole in the accounts and what the company called “significant, potentially fraudulent, accounting irregularities”. Two secret overdrafts had been drawn down by £9.7m.
Johnson, the executive chairman, was repaid £10m of the emergency cash after the company raised £15m from shareholders including the broker Hargreave Hale.
Patisserie Holdings has appointed the accountant KPMG to review “all options”, which include a fire sale of the business, administration, a company voluntary arrangement (CVA) to close shops and reduce rents, and a plan to keep trading.
The business would need cash to continue in its current form. A CVA would also require further funds.
It is not clear whether Johnson and other investors are prepared to put in more money. “Every option is bad,” said a City source, who added that the banks were “playing pretty tough”.
Patisserie Valerie has become one of the biggest scandals on AIM, the junior market, in recent years. Last week the company said it had become clear that profits would be “materially below” the £12m forecast before the suspected fraud emerged, and cashflow was also much lower than estimated.
According to The Times, a report by PwC has revealed that money was paid into the two secret accounts using cheques that later bounced. This inflated the balances at the year-end. Thousands of false entries were made to company ledgers, Patisserie Valerie said last week.
Company insiders told The Sunday Times that “serious forgery” had taken place. The Financial Conduct Authority is questioning Barclays and HSBC’s compliance teams over the apparent failure to spot account irregularities
Patisserie Valerie is said to have attracted interest from at least three private equity firms, which have made inquiries to a City leisure adviser, raising the prospect of a cut-price takeover.
Sunday Times
Auditors are not responsible for exposing frauds, but it is remarkable that false transactions where not picked up during the testing phase of the audit. They also undertake ratio analysis to ensure that the figures make sense ... low interest revenue on a large cash balance may have been the "tell" with this company (despite a historically low interest rate) but no one seen this coming. I'm a customer occasionally and the cafe that I use and the others that I observed always seemed reasonably busy. It just didn't look like a "too good to be true" company. And that's what's scary.
It would appear that the overdraft was not recorded in the accounting records. Absolutely right that items recorded on bank reconciliation (of the account that was disclosed) between bank statement and accounting records should be checked by auditors with post year-end statements to see that they were cleared.
The overdraft must have been opened in a fraudulent manner, I guess he forged the second signature on the documentation and minutes required to open the account, and presumably on the cheques. Then there is the issue of how he booked the transactions. Possibly both sales and purchases were being inflated. Hope that they can find a jury to understand all this.
Does anyone know if he is still claiming that he did not know anything about the transfers of money? If he sat in on the board meeting, surely there will be minutes as to who was present when such decisions were made? He either has a selective memory or he was negligent with his and shareholders money. If he profits from this scandal, private investors should sue
Hmm you are not wrong. Very few recent IPOs are shining public investments. Spire, Convatec, Saga, AA, Pets at Home etc etc not a lot of winners there for investors!
Safer to invest in the local chippy than useless companies with overpaid crooks.
private investors get swindled everyday by the city, about time private investors move into cash and gilts until FCA, LSE and the audit regulator stop enabling Ponzi.
My complete guess would be 20-30% of the cafe locations are not massively profitable. I expect those could be subject to CVAs and the profitable cafes kept in a Newco. The bun fight will now be between the bankers and the sub debt /equity holders to divi up any value from this complete mess. The head office won’t be a very pleasant place to work at the moment I suspect. I hope they can protect as many jobs in the cafes as possible, the cafe staff have done nothing wrong and they will hopefully be well looked after. As for the bosses and directors, hopefully they will get all that they deserve from the relevant authorities.
1/4 the directors
Any bets on who will end up owning the profitable outlets? Sad times for what seemed like such a well executed chain.
Have been following this since October, with the hope that a cleaned up, heavily scrutinised, profitable business would rise out of the ashes of this mess that I could potentially invest in.
I have to doubt now that there will be any relisting, and if there is how many cafes will be left. All investors have my sympathy.
Exactly. Nemesis wreaks her revenge on those guilty of hubris as the ancient greeks noticed.
more to come out is the big problem imo.just don't see them getting to this bottom of this for quite a while and the longer it goes on the greater grows the fear of complete disaster.unrellenting bad news has a very corrosive effect.not invested here and never have been and would not contemplate investing even if it starts trading again but for those currently invested i hope for better news.no great admirer of johnson.serial entrepreneurs are imo best avoided after their first success.i am a great believer in the concept of hubris which unfortunately is no consolation to those suffering from the consequences by association
Another thought why would a cake business be receiving deposits for millions of pounds. I know it’s not a cheap shop but...