Patisserie Valerie facing closure without immediate cash injection

Jessica Clark
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Patisserie Valerie Chain Faces Crisis Over £20million Hole In Finances
The high street cake shop halted trading in its shares yesterday (Source: Getty)

Patisserie Valerie is facing closure without an immediate cash injection, the firm said today.

The high street cake shop halted trading in its shares yesterday as it announced that it had been notified of "significant and potentially fraudulent" accounting irregularities, and suspended chief financial officer Chris Marsh.

Sky News reported that the black hole in the company's finances could amount to £20m.

Read more: HMRC seeks winding up order against Patisserie Valerie owner

In a trading update this afternoon the company said: "The Board has now reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business.

"Without an immediate injection of capital, the Directors are of the view that that is no scope for the business to continue trading in its current form."

In a statement yesterday the board said it had become aware of a winding up notice issued against its principal trading subsidiary Stonebeach, which was filed on 14 September, relating to £1.14m of unpaid tax.

Entrepreneur Johnson bought a 70 per cent stake in the business in 2006, and still holds a 37 per cent interest, having enjoyed success with other chains like Pizza Express.

Patisserie Valerie posted a nine per cent annual jump in revenue in the six months to the end of March, climbing to £60.5m, while pre-tax profit grew 14 per cent to £11.1m.

Read more: Patisserie Valerie suspends finance chief as it warns of potential fraud