BADEN-BADEN (dpa-AFX) - Leasing specialist Grenke did significantly more new business in 2022 than in the previous year, which was still heavily influenced by Corona. The volume of new leasing business rose by around 39 percent to 2.3 billion euros, as the SDax-listed company announced in Baden-Baden on Wednesday. Grenke thus reached the upper end of its forecast range of 2.1 to 2.3 billion euros, which was raised in October. The contribution margin as a measure of operating profit did not increase quite as much, and the corresponding margin thus declined. However, the share price increased significantly.

At times in the morning, the share price gained seven percent to 23 euros. Most recently, the share price rose by around 3.5 percent. The year ended on a strong note, with growth higher than expected, wrote Warburg analyst Marius Fuhrberg. The figures once again underscored the upward trend at the leasing specialist.

The Baden-Baden-based company has not yet completely left the Coronadelle behind, after all, the volume of new business is still below the value of 2019 with 2.8 billion euros at that time. By 2024, CEO Michael Bücker, who is currently taking a break due to illness, and interim CFO Sebastian Hirsch have set their sights on new business of 3.4 billion euros.

Profitability declined for the year as a whole, partly because Grenke is once again focusing more on larger contracts that are not as profitable. The contribution margin, i.e. the difference between revenues and variable costs, climbed by a good 26 percent to just under 370 million euros. The margin measured against the contribution margin thus fell by one and a half percentage points to 16.1 percent.

However, rising interest rates also contributed to this, because Grenke can only pass these on to its own customers with a time lag. "In the fourth quarter, it was again important to defy the extremely dynamic rise in interest rates," Hirsch said. "Even if these circumstances are likely to continue for a few more months, our clear positioning and expertise in small-ticket leasing will allow us to remain agile and flexible." According to earlier data, it typically takes a quarter in individual markets before Grenke can pass on higher refinancing costs.

Grenke primarily offers leases to small and mid-sized commercial customers who prefer to lease their business equipment, such as computers, printers or restaurant furniture, rather than buy. During the pandemic, this had caused business to slump, especially in the hospitality and tourism sectors in southern Europe. The average volume of a contract in the fourth quarter was 9443 euros, an increase of nine percent.

In the final quarter, Grenke did most of its new business in Western Europe, especially in France. The strongest growth, however, was achieved in Northern and Eastern Europe, particularly in the UK and Finland.

Even though the preliminary figures enabled Grenke shares to break further away from the price lows around EUR 18 from the fall and before the turn of the year - the Corona dip and the impact of the short-seller allegations from more than two years ago are still clearly felt by investors. In 2022, the record was also poor, with the share price falling by over a third. Before Corona broke out in February 2020, the stock was still trading above the 100 euro mark.

In the fall of 2020, short seller Viceroy had raised serious allegations surrounding the company's business practices. A special audit by the financial supervisory authority Bafin subsequently identified organizational deficiencies. Grenke ultimately received a full audit certificate for its balance sheets, but subsequently also reorganized its investments and took over franchise companies whose role had been criticized by investors. At the end of December, Grenke concluded purchase agreements for a further four of 14 franchise companies still outstanding for acquisition. The remaining acquisitions are expected to be completed by mid-2023.

Grenke will present its annual report with the final figures on March 16./zb/men/mis/jha/