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(Sharecast News) - Specialist cake maker Cake Box announced the departure of its co-founder and chief financial officer Pardip Dass on Monday as it said its full-year performance was set to be in line with expectations.
The company, which makes egg-free cakes, said Dass was stepping down in order "to pursue other interests". David Forth has been appointed to the role on an interim basis with immediate effect and Dass will work alongside him to ensure an orderly handover before stepping down from the board at the end of the month.
Forth has more than 20 years of experience in senior finance roles across the consumer, retail and logistics industries, including most recently as interim finance director at AB Sugar and deputy CFO of Eddie Stobart Logistics.
Dass's departure comes after shares in the cake maker have fallen by 35% since January, when a financial blog alleged errors in its accounts and claimed there had been an "erroneous" £2m entry into the company's cash flows and historic errors in stock control.
Cake Box responded by acknowledging that there has been "transcription errors" between its 2021 results announcement at the end of June and the annual report and accounts. It also noted "inconsistencies in prior period inventory reporting and comparative period disclosures relating to director interests in franchise stores".
However, it said the errors has no impact on reported profits, cash flows or balance sheet and that it had received a clean audit opinion for the year.
Cake Box also announced on Monday the appointment Richard Zivkovic as chief operating officer with effect from 13 June. He joins the group from Island Poke, the 'grab and go' franchised food retailer, where he is currently COO.
The company has also appointed Chay Watkins as its new marketing director. Watkins joins from a brand strategy consultancy, where he developed brand and category strategies for large fast-moving consumer goods brands and multiple retailers.
Cake Box also provided a brief update on trading, which it said has "continued strongly" throughout the second half, with full-year results on track to be in line with expectations.
The company, which appointed BDO as internal auditor in August last year to assist in "strengthening" its internal control framework, said it continues to work through a plan of improvements based on the areas identified by the external auditors, the initial focus being on inventory management, with some changes already being progressed.
House broker Shore Capital said: "Collectively, we see the senior management changes announced by Cake Box as clear and decisive steps that acknowledge a need for change, recognising the material positive contribution that Mr Dass made to the company. Whilst the new team needs to settle in and deliver its plans, we also believe that the additional resources provide the basis to meet the chairman's stated ambitions.
"That Cake Box continues to trade very well is an important endorsement of the business' strong commercial and operational capabilities, which we have never doubted, and as such we see that good trading momentum as most important for shareholders' to note.
"Lastly, we are relieved that BDO is pressing on with its investigative work, which we know shareholders' welcome too, and we are comforted that a new CFO provides the human resource to make sure that recommendations are appropriately actioned. As such this is an important update for Cake Box that we hope and trust will rebuild investor confidence and faith in what has been and has the potential to remain an excellent British retail success story."