Patisserie Valerie says accounting scandal worse than thought

The owner of Patisserie Valerie has said an accounting scandal it revealed in October was worse than it thought.

Its probe has found "extensive" misstatement of its accounts and "very significant manipulation of the balance sheet and profit and loss accounts".

This includes thousands of false entries in its ledgers, it said in a statement.

Profitability and cash flow had been overstated and were "materially below" figures announced in October, it said.

In October it said those figures were likely to be £120m revenue for the year and earnings of £12m.

At that time it revealed it had uncovered "significant, and potentially fraudulent, accounting irregularities".

Finance director Chris Marsh was arrested after having been suspended, and is still being investigated by the Serious Fraud Office and the Financial Reporting Council (FRC).

Also under investigation by the FRC are former Patisserie Valerie auditors Grant Thornton.

The Patisserie Valerie owners said on Wednesday that RSM had been appointed as auditors and KMPG had been taken on to help it "recover from the devastating effects" of the scandal.

It added that it had appointed a new chief executive and interim finance director, and that other new directorships and management appointments had been made after its October announcement.