The company, which is US-based but listed on the London Stock Exchange, was due to release its results for the year ended 30 June 2019 on Monday 23 September.

However, it put out an announcement stating that during the course of the audit, PwC had identified a ‘potential issue relating to the classification and valuation of certain inventory items’.

An investigation is now underway, which is expected to take a number of weeks. Pure Circle said that at this stage it is unable to determine whether or not the potential issue is material or whether it is limited to the year ended 30 June 2019.

It is also unclear how much money is involved, but Pure Circle indicated this could be up to $30m. It said initial indications suggested there was no indication that the potential issue has any impact on the net debt of the group or the cash generation of the business.

In the annual report and accounts 2018, Pure Circle reported turnover of $131m, with net profits of $8.7m in 2018. Adjusted EBITDA was $28.8m and the company said net profits totalled $8.7m. In the latest half yearly results the company noted that net debt had increased to $103.5m due to higher working capital. 

As a consequence of the identification of the potential issue, the company will be approaching its banks and will seek appropriate waivers under its banking arrangements as required.

PwC has been the company’s auditor since 2010. According to the 2018 annual report, PwC’s UK firm took over from PwC Malaysia in FY16. Last year the firm was paid $600,000 (£483,000) for audit services, along with further non-audit assurance fees of $200,000 (£161,000) for the review of the interim announcement.