Patisserie Valerie gets cash call away but boss Luke Johnson is deservedly taking heat from angry investors

The AIM listed chain's executive chairman and biggest investor has pledged to scale back his external commitments

Thursday 01 November 2018 17:03
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Patisserie Valerie: Investors have approved the troubled chain's cash call
Patisserie Valerie: Investors have approved the troubled chain's cash call

Patisserie Valerie, the cafe chain with the French name run by Brexit backing Luke Johnson, has been saved. For a second time.

Shareholders at a rowdy AGM accused the aforementioned, the former Channel Four chairman and Pizza Express mogul, of holding a gun to their heads.

But they backed the company’s £15m share issue because they didn’t have any other choice.

It was Johnson’s way or the highway, and that road had an administrator at the end of it.

The latter had only been three hours away on the day when Mr Johnson advanced a £20m emergency loan to the company, after a black hole in the AIM listed company’s accounts had come to light.

Some of the new money raised will go to pay back half of that but the outstanding £10m will remain as an interest free loan. Johnson also didn’t participate in the discounted share issue to avoid accusations that he was taking advantage of the situation to gobble up new shares on the cheap.

That, at least, was a good decision. There clearly haven’t been enough of those at Pat Val and Mr Johnson cannot be excluded from that criticism.

The Serious Fraud Office is in there. So is PricewaterhouseCoopers. Finance director Chris Marsh has quit and been arrested and bailed, but without charge.

The company has £9.8 million of debt on its books, having reported that it was cash positive. The historical statements made by it have been exposed as works of fiction.

Mr Johnson has a notably diverse and multi faceted portfolio of interests beyond Pat Val, in which he is the biggest shareholder, that extended to non executive directorships, private equity, and media work including a Sunday Times column advising on business.

You can understand, given the breadth of his activities, why shareholders might be inclined to ask whether he really had his eyes on the ball, and whether a more hands on boss might not have picked up on the problems earlier.

Answers have, however, been in short supply for all those connected to the company, its employees as well as its investors. They may have to wait awhile yet.

In the meantime, Mr Johnson has promised to scale back what he’s been doing “to focus on the job in hand here”. “I will be doing just that for the foreseeable future,” he told investors.

There are a lot of unhappy people who should expect nothing less.

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