Great Elm Group Welcomes Deloitte as New Auditor for Future Growth

Author: Owen Jenkins Updated: 09-16-2024 06:22 PM

Great Elm Group Shifts to Deloitte as Independent Auditor

Great Elm Group, Inc. (NASDAQ: GEG), a prominent player in software services, recently made a notable change in its financial oversight. The company's Audit Committee opted to transition from their previous independent registered public accounting firm, Grant Thornton LLP. This significant decision took effect promptly, marking a fresh start for the company.

No Issues with Previous Auditor

It's important to clarify that this change was not sparked by any disagreements or problems with Grant Thornton's audit reports for the fiscal years ending in June. The reports from both years were clean, free from any adverse opinions or modifications regarding Great Elm's financial statements.

Auditor Transition without Disputes

During the transition process, there were no reported disagreements between Great Elm Group and Grant Thornton. This ensures a smooth parting that reflects positive relations between the firm and its previous auditor.

Deloitte & Touche Takes the Helm

Following Grant Thornton's departure, Great Elm Group has welcomed Deloitte & Touche LLP as their new independent auditor for the upcoming fiscal year ending in 2025. Interestingly, prior to this appointment, the company did not consult Deloitte regarding any accounting principles or transactions that could impact their decision-making process. This suggests that Great Elm is ready to embrace a new auditing perspective without prior influence.

Anticipating a Fresh Perspective

This strategic audit change is expected to usher in a new outlook on the company's financial oversight. Engaging Deloitte may facilitate enhancements in their audit processes, aligning them with the company's growth trajectory.

Strong Fiscal Performance and Growth

In addition to changes in auditing, Great Elm Group also announced robust performance in its recent fourth quarter. With significant growth in both assets under management (AUM) and revenue, the company reported a tripling of revenue compared to the previous year, reaching $9 million. This impressive growth in AUM, with an increase of 22%, signifies strong operational traction.

Financial Insights and Future Directions

Despite recording a net loss of $0.6 million during the quarter, attributed mainly to unrealized investment losses, the company demonstrated resilience with adjusted EBITDA climbing to $1.2 million, a notable rise from $0.4 million for the same quarter last year.

Capital Raises and New Business Ventures

Great Elm Group's proactive approach has also led to substantial capital raises for its business development arm, Great Elm Capital Corp, alongside successful new platform launches. While the company noted a net loss for the year, this was primarily due to the accounting treatments involved with its investments in Special Purpose Vehicles (SPVs).

Expanding Real Estate Platform

Looking forward, Great Elm Group has high expectations for growth in its real estate platform, particularly in the realm of build-to-suit (BTS) projects. The management team is diligently pursuing avenues that present attractive risk-adjusted returns, ensuring that they capitalize on possible opportunities for growth.

Frequently Asked Questions

What prompted the change in auditors for Great Elm Group?

The change to Deloitte as the independent auditor was a strategic decision by Great Elm Group's Audit Committee, with no issues reported with the previous firm.

How did Great Elm Group perform financially in the recent quarter?

Great Elm Group reported a significant revenue increase for the fourth quarter, tripling to $9 million and achieving a 22% rise in assets under management.

What can be expected from the new partnership with Deloitte?

Engaging Deloitte is anticipated to enhance the company's audit processes, bringing fresh insights and perspectives to financial oversight.

Did Great Elm Group face any issues with its previous auditor?

No, there were no disagreements or reportable events with Grant Thornton, ensuring a smooth transition to Deloitte.

What future plans does Great Elm Group have?

The company is focused on expanding its real estate platform and leveraging growth opportunities to drive potential returns.

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