RSM replaces Grant Thornton as Patisserie Valerie auditor

15 January 2019

Months after a £20 million accounting black hole was found in the books of Patisserie Valerie, the British café chain has changed its auditing provider. RSM will now take over from Grant Thornton, as the latter is investigated by the Financial Reporting Council for its role in the on-going saga.

First opened in 1926 in Frith Street, central London by the Belgian Madame Valerie, Patisserie Valerie has since grown into a chain of cafés that operates in the United Kingdom. The chain specialises in hand-made cakes, and its menu includes continental breakfasts, lunches and teas and coffees. The group’s umbrella, Patisserie Holdings, is the UK's largest patisserie cafe chain with over 150 sites nationwide. The company operates four brands alongside Patisserie Valerie; Druckers Vienna Patisserie, Baker & Spice, Flower Power City Bakery and Philpotts.

While the firm has expanded dramatically over its 92 year history, it has also been working to reduce its debt in order to secure its future. In 2014 this saw the company raise £33 million on the London Alternative Investment Market to reduce its debt. Then, in October 2018, the chain found itself mired in a potential auditing crisis, as it struggled with a £20 million black hole in its accounts. The scandal led to the arrest of the company’s finance chief Chris Marsh and suspension of trading in its shares, while Chairman Luke Johnson stepped in to lend £20 million of his own money to keep the company running.

RSM replaces Grant Thornton as Patisserie Valerie auditor

Patisserie Holdings had recently re-appointed Grant Thornton as its auditor, but the news placed pressure on the relationship, especially in a climate in which top accountancies had come under mounting scrutiny, following a litany of scandals. As a result, Patisserie Holdings opted to part ways with Grant Thornton, and announced its intent to appoint RSM UK as its new auditor, during the Christmas period, as the company tries to recover from the accounting blunder.

Britain’s accounting watchdog is currently investigating Grant Thornton UK’s audit of Patisserie’s financial statements for 2015-2017, and Patisserie Valerie has been under pressure since the accounting irregularities were discovered, when reports emerged that then CEO Paul May and Marsh had been issued twice the number of shares it had disclosed in official filings. Interestingly, RSM found itself in a similar position to this earlier in 2017. The firm’s own audit by Big Four firm PwC had come under scrutiny by the Financial Reporting Council in 2017, resulting in a fine hitting PwC for £5.1 million, after it admitted to misconduct.

Related: Patisserie Valerie finds ‘potentially fraudulent’ accounting anomalies.


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How data insights helped Network Rail improve the South-East route

11 April 2019

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.