(new: share price, further statements management.)

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. However, the contribution margin as a measure of operating profit did not increase quite as strongly due to rising interest rates, and the corresponding margin thus declined. The share price started the day with significant gains, but recently turned negative.

After midday, the share price was down 2.5 percent at 20.88 euros. Prior to that, the share had temporarily gained up to a good 7 percent and reached a high since November. 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. However, experts also pointed to the declining margin. In recent days, the share price had recovered noticeably from a low of under 19 euros towards the end of December - traders therefore also spoke of possible profit-taking.

Profitability declined over the year as a whole, partly because Grenke is increasingly focusing on larger contracts, which are generally not as profitable. Above all, however, rising interest rates had a negative impact because Grenke can only pass them on to its own customers with a time lag. "In the fourth quarter, it was also important to defy the extremely dynamic rise in interest rates," CFO Sebastian Hirsch said, according to the statement. These circumstances are expected to continue for several months. According to earlier data, it typically takes a quarter in individual markets before Grenke can pass on higher refinancing costs.

In a video posted on YouTube, Hirsch said the margin is currently below the normal target level - but that was expected given the interest rate environment. "As long as we see rising interest rates, we will also have somewhat lower contribution margins," he acknowledged. Hirsch is currently also managing the Group's overall operations on an interim basis for CEO Michael Bücker, who is currently on medical leave.

The contribution margin, i.e. the difference between revenues and variable costs, climbed by a good 26 percent last year 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.

The Baden-Baden-based company has not quite left the Coronadelle behind yet either; after all, the volume of new business is still below the 2019 figure of 2.8 billion euros at the time. By 2024, however, Bücker and Hirsch have set their sights on new business of 3.4 billion euros.

Grenke primarily offers leasing services to small and medium-sized commercial customers who prefer to lease their business equipment, such as computers, printers or restaurant furniture, instead of buying it. During the pandemic, this had caused business to slump, especially in the hospitality and tourism sectors in southern Europe.

In the final quarter, Grenke generated most of its new business in Western Europe, especially in France. The strongest growth, however, was achieved in Northern and Eastern Europe, especially Great Britain and Finland. The average volume of a new contract in the fourth quarter was 9443 euros, an increase of nine percent.

Even though the Grenke share has recently been able to break away somewhat from the price lows around 18 euros from the fall and before the turn of the year - the Corona dip and the impact of the shortseller 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./men/zb/mis/jha/