- WKN: A161N3
- ISIN: DE000A161N30
- Land: Deutschland
Nachricht vom 20.10.2020 | 13:29
GRENKE AG: GRENKE provides an update on the status of Company-commissioned audits
DGAP-News: GRENKE AG
/ Key word(s): Miscellaneous
GRENKE provides an update on the status of Company-commissioned audits
Baden-Baden, October 20, 2020: GRENKE AG, a global financing partner for small and medium-sized enterprises, reports on the preliminary interim status of the audits commissioned by the Supervisory Board of GRENKE AG. The auditing company Warth & Klein Grant Thornton (WKGT) is reviewing the advantageousness and market conformity of the franchise company acquisitions, while KPMG AG Wirtschaftsprüfungsgesellschaft (KMPG) has significantly expanded its auditing activities within the scope of its role as the auditor. Priority is being given to validating the existence of cash and cash equivalents and the viability of the leasing business. Selected aspects concerning the regularity of the business operations and certain business processes are also being reviewed.
As the audit is still underway, interim reports from the auditing companies are not yet available - with the exception of the partial report on the proof of cash and cash equivalents based on bank account balances. Therefore, the Board of Directors and the Audit Committee of the Supervisory Board of GRENKE AG are providing a statement giving their assessment based on the initial interim findings and the ongoing status reports of the commissioned auditors.
"Over the past few weeks, we have been working intensively on the audits, and I am confident that all of the investigations will be completed as soon as possible. At the same time, we are looking ahead and seeing this situation as an opportunity. We are working on a vision for the future that, above all, will meet the higher expectations of governance and transparency of our rapidly growing company", commented Antje Leminsky, Chair of the Board of Directors of GRENKE AG.
Franchise acquisitions audited so far can be deemed as positive
WKGT has informed the Company's Supervisory Board of its preliminary interim findings. According to these findings, the franchise companies acquired since 2008 together contribute to the Consolidated Group's profit through either the earnings generated directly by the individual local subsidiaries or through those from other companies within the Consolidated Group. Overall, these are within the range of expected results that justify an investment in participations. As a result, these acquisitions can be described as positive for the GRENKE Consolidated Group.
The starting point of determining purchase prices was the so-called multiplier method, which is a generally common method for company valuation. This method was categorically outlined at the beginning of the franchise partnership within the scope of the purchase option. The potential future profit of a franchise company was determined on the basis of the company's new business development and multiplied by a multiplier. This multiplier was derived in a market-oriented manner and, in the case of the most recent acquisitions, from the mean value of the price-earnings ratio (PE) of the GRENKE share and the EURO STOXX 50. A discount of 25 percent to this valuation was stipulated as a general rule. Consequently, this method includes specifics that take into account the business model and the focus on young, fast-growing companies. This approach for determining the purchase prices of franchise companies was therefore described by WKGT as a fundamentally sound method.
At GRENKE, lease payments are generally made directly to GRENKE by the lessee, whereby for 90.2 percent of the lease contracts, the payments are collected directly by the GRENKE Consolidated Group by direct debit from the bank accounts of lease customers.
In addition, KPMG is analysing the existence of lease contracts initially by random sample on a case-by-case basis, and key contractual documents and selected payments within the sample are being examined. KPMG also contacted lessees directly to confirm the lease contracts and outstanding lease payments.
KPMG's review of the business organisation includes the handling of legal cases and customer objections, the know-your-customer rule (KYC), money laundering and fraud prevention. At the present time, no significant anomalies in the business model or business organisation are discernible. The number of legal cases is at a low level, both in terms of business volume and the number of transactions in the low-volume business.
Previously, on October 5, 2020, GRENKE AG announced that KPMG had provided evidence corroborating more than 98 percent of the GRENKE Consolidated Group's bank balances. For more information on this announcement, please see the press release at
For further information, please contact:
Founded in 1978 in Baden-Baden, the Company operates in 33 countries and employs more than 1,700 staff worldwide. GRENKE shares are listed in the MDAX on the Frankfurt Stock Exchange (ISIN DE000A161N30).
Further information about GRENKE and its products is available at: www.grenke.com
|Neuer Markt 2|
|Phone:||+49 (0)7221 50 07-204|
|Fax:||+49 (0)7221 50 07-4218|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1141920|
|End of News||DGAP News Service|
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