HMRC serves Patisserie Valerie with winding-up order

The crisis at Patisserie Valerie has deepened after it revealed it has been served with a winding-up petition from HMRC.

Shares were suspended on Wednesday morning after the cake retailer revealed “significant and potentially fraudulent” accounting irregularities.

The Birmingham-based business has suspended its chief financial officer Chris Marsh, who has been in post since 2006.

It has now said a winding-up petition was served on its main trading subsidiary, Stonebeach, on September 14. HMRC is chasing £1.14m it is owed.

In a statement to the stock market, Patisserie Valerie said: “The Company and its advisors are in communication with HMRC with the objective of addressing the petition.

“The Company continues to engage with its professional advisers to understand better the financial position of the Group and will make further announcements in due course.”

Patisserie Valerie at Resorts World

Although it has not publically put a figure on the problems, it is reported there is a £20m black hole in the company’s accounts.

Responding to the initial problem, chairman Luke Johnson said: “We are all deeply concerned about this news and the potential impact on the business.”

Patisserie Valerie’s most recent published accounts, for the year to September 2017, showed pre-tax profits of £20.1m on revenues of £114.2m.

It had been enjoying a long and successful growth curve with year-on-year increases in sales and profits stretching back at least seven years. In the last five years it has doubled sales and trebled profits.

The group, which also operates Druckers and Philpotts, floated in 2014 and its shares have more than doubled in value. It closed last night at 429.5p, valuing the company at nearly £450m.