Patisserie Valerie auditor castigated after telling MPs it is not set up to spot fraud: The long-term auditors of collapsed chain Patisserie Valerie have been castigated for claiming they are “not set up” to spot fraud. MPs told Grant Thornton chief executive David Dunckley the company’s “fingerprints were all over the crime scene” after failing to identify a £40m fraud. Dunckley told the parliamentary business, energy and industrial strategy committee “audit fundamentally gives a reasonable opinion on historic information, and doesn’t look for fraud”. There is a “clear expectation gap” between what the public thinks auditors’ role is and what their responsibilities actually are, he added. Patisserie Valerie collapsed into administration last week “as a direct result of the significant fraud”. More than 900 jobs were lost immediately. The positions of a further 2,000 staff hang in the balance as a buyer for the remaining 122 shops is sought. Grant Thornton was Patisserie Valerie’s auditor for more than ten years, before stepping aside after the £40m black hole was found. Dunckley told MPs sophisticated frauds were difficult to pick up and it wasn’t an auditor’s responsibility to provide “a statement that the accounts are correct”. He added: “We saying they’re reasonable, we are looking in the past and we are not set up to look for fraud.” However, committee chairman Rachel Reeves MP said: “In a shop that sells teas and cakes you’d think that sort of thing might be spotted.” Labour MP Peter Kyle added: “Of course the audit company isn’t committing a crime, in that case, but its fingerprints would be all over the crime scene. If an audit company isn’t picking up on this type of behaviour, what is the point of audit in the first place?” In England and wales, auditors are responsible for checking a company’s financial statements are free from “material misstatement, whether due to fraud or error”.

Steve Easterbrook – UK leading the way in delivery at McDonald’s: McDonald’s chief executive Steve Easterbrook has said the UK is leading the way in delivery for the company. The UK saw high double-digit growth in restaurants that have offered the service for more than 12 months. Easterbrook said: “The UK now has 51 consecutive quarters of like-for-like sales growth and it continue to gain share in a shrinking market. Delivery continues to grow rapidly as we expand through additional restaurants and third-party providers as well as benefiting from strong like-for-like sales momentum. Many of our major markets such as to the US, France and in the UK achieved delivery sales growth in the high double-digits in restaurants offering a service for more than 12 months and other markets such as Canada, Italy and Russia grew even more. We’re confident this delivery offers additional growth potential for our business. Even with the momentum we already have established, we know we have an opportunity to let more customers know the McDonald’s will bring meals to their homes, offices and colleges. Driving awareness begins with encouraging more customers to try delivery. We talked before about the high satisfaction among our delivery customers and their willingness to reorder and we continue to see those trends hold steady throughout 2018. We placed a high priority on identifying the winning ideas developed by individual markets and spreading them elsewhere within the McDonald’s system. With delivery, the UK, Canada and Australia are leaders within McDonald’s and are developing innovative approaches to help restaurants with high order volumes. We also recognised there are significant challenges as we enter the new year. You’ve seen consumer uncertainty is growing from France to China to the UK and elsewhere across the globe as well as the tightening economies and shifting political environments. Still we remain optimistic.”

 

BigDish provides strategy update: BigDish, the company that operates a yield management platform for restaurants, has updated on its strategy as it targets a new set of UK towns and cities. The company stated: “The UK launch in Bournemouth announced on 16 January has been more successful than expected as new users book dining experiences via the BigDish app. At one restaurant about 250 people were seated over the past two weeks. Bristol will also be live on the BigDish app today (Thursday, 31 January) with an initial select number of restaurants. Territory one will target the following locations and their surrounding areas – Bournemouth, Southampton, Portsmouth, Basingstoke, Guildford, Dorchester and Weymouth. Territory two will target the following locations and their surrounding areas – Bristol, Gloucester, Bath, Swindon, Oxford, Windsor, Slough, Exeter and Plymouth. The company targets at least 200 restaurants for each territory. Restaurants are selected based on their TripAdvisor rankings and reviews to ensure restaurants of a certain level of popularity and quality are on the BigDish platform. The fundamental driver behind yield management is to use incentives to influence consumer behaviour. BigDish will also be ensuring a certain level of deal quality is available to consumers at partner restaurants. From the recent beta testing period, one of the learnings was to allow consumers to book a table up to a maximum of 48 hours in advance. This ensures that BigDish provides a true yield management solution that benefits both its restaurant partners and customers. The company has concluded its strategic review of the Asian business. It has been determined the company is best placed to focus all its resources towards the UK market where faster growth is easier to achieve. Talks have taken place with a number of large tech companies who have expressed an interest in BigDish.” Chief executive Sanj Naha said: “I am excited to oversee BigDish’s roll-out in 2019. We have gathered a wealth of data from the beta testing period conducted in 2018. One of the important learnings was to seek to differentiate ourselves from generalist restaurant reservation platforms by allowing a maximum booking window of 48 hours. This will help us to deliver a genuine ‘last minute dot com’ experience to our users. We look forward to keeping the market updated with any further developments.”

 

Britvic reports revenue up 4.5% in first quarter: Britvic has reported revenue increased 4.5% to £352.4m in its first quarter ending 23 December 2018. Organic revenue, excluding the soft drink levies, increased 1.5% to £337.3m. Chief executive Simon Litherland said: “We have delivered a solid start to the new financial year, with performance in line with our expectations. Given the resilience of our business, the strength of our portfolio and exciting marketing and innovation plans, we are confident of making further progress in 2019.”

 

Diageo reports GB net sales up 14% in first half: Diageo has reported net sales in Great Britain grew 14% for the six months ending 31 December 2018. Of its British performance, the company stated: “Gordon’s and Tanqueray both delivered strong double-digit growth. Diageo gained almost 700 basis points of share in an expanding gin category. Guinness net sales grew 6% and gained 14 basis points of market share, driven by a strong performance for Hop House 13 Lager. Scotch net sales were flat as growth in Johnnie Walker and Bell’s was offset by an increasingly competitive environment in scotch malts. Johnnie Walker grew 6% partially driven by the launch of White Walker by Johnnie Walker. Smirnoff returned to growth with a 4% increase. Baileys net sales declined 5% driven by shipment phasing, but gained share in the category.” Overall, Diageo reported net sales increased 5.8% to £6.9bn with operating profit rising 11% to £2.4bn, with organic growth partially offset by adverse exchange. All regions contributed to broad based organic net sales growth, which was up 7.5%, and organic volume grew 3.5%. Organic operating profit grew 12.3%, ahead of top line growth, as cost inflation and higher marketing investment were more than offset by improved price/mix and efficiencies from our productivity programme. Chief executive Ivan Menzies said: “Diageo delivered broad-based volume and organic net sales growth across regions and categories. We continue to expand organic operating margins while increasing investment in our brands ahead of organic net sales growth. These results are further evidence of the changes we have made in Diageo to put the consumer at the heart of our business, to embed productivity and to act with agility to enable us to win sustainably. At £1.3bn, we delivered another period of strong free cash flow. As a result the board approved an incremental share buyback of £660m, bringing the total programme up to £3.0bn for the year ending 30 June 2019. This half has benefitted from some one-time and phasing gains in both organic net sales and operating profit, and therefore we continue to expect to deliver mid-single digit organic net sales growth for the year and to expand operating margins in line with our previous guidance of 175 basis points for the three years ending 30 June 2019. As we deploy our strategy, we remain focused on building the long-term health of our brands and ensuring we grow our business in a consistent and sustainable way.”

 

Brighton Pier Group non-executive director steps down: Brighton Pier Group has announced Joe Tager has resigned as a non-executive director in order to pursue a new full time role at Lloyds Development Capital. The company said it does not intend to appoint a replacement at this time. Chief executive Anne Ackord said: “We would like to thank Joe for his services and contribution to the company. He has provided invaluable support to the board and management team, particularly during the process to acquire Brighton Pier in 2016 and Paradise Island Golf towards the end of 2017. On behalf of the board, I wish him all the best for the future.”

Leadership Summit open for bookings: Propel is launching the Leadership Summit, which will see a select group of the sector’s most experienced bosses share their expertise on leadership. The full-day event, in partnership with Elliotts, will take place on Tuesday, 12 February at One Moorgate Place and is open for bookings. Speakers will include Will Stratton-Morris, UK chief executive of Caffe Nero, who will talk about building high-performance teams. Alasdair Murdoch, chief executive of Burger King, speaks about the role of leadership in business turnarounds. Elliotts chief executive Ann Elliott will talk to Des Gunewardena, chief executive of D&D London, about the lessons of leadership he has picked up in his career in the sector. Duncan Garrood, chief executive of Ten Entertainment, will give his views on leadership and the customer experience, while Jo Fleet, managing director of Flat Iron, will talk about empowering people and trust and getting the team to “buy in” through clear communication and vision. Mark Jones, chief executive of Carluccio’s, will explain how the company is building the quality and skillsets of its general managers to lead the business out of decline. Simon Townsend, chief executive of Ei Group, will give his views on the challenges of leadership during a period of immense change and Zoe Bowley, managing director of PizzaExpress, will give her top ten tips on leadership. Meanwhile, Loungers founder Alex Reilley will talk about the adaptations involved in growing a business from one site to more than 100, celebrating success and the art of succession, while Ann Elliott will give her views on the power of mentoring to grow talent in organisations. Propel managing director Paul Charity said: “With the industry facing such challenging times, effective leadership has never been more important. This is an unmissable opportunity to learn from high-profile leaders in our sector.” Prices are £295 plus VAT for Premium members, £345 plus VAT for operators and £445 plus VAT for suppliers. To book, email anne.steele@propelinfo.com