REG - Georgia Capital PLC - Final Results
24/02/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250224:nRSX1700Ya&default-theme=true
RNS Number : 1700Y Georgia Capital PLC 24 February 2025
FINANCIAL PERFORMANCE HIGHLIGHTS (IFRS) 1
GEL '000, unless otherwise noted (unaudited) Dec-24 Sep-24 Change Dec-23 Change
Georgia Capital NAV overview
NAV per share, GEL 95.95 83.41 15.0% 82.94 15.7%
NAV per share, GBP 27.14 22.82 18.9% 24.23 12.0%
Net Asset Value (NAV) 3,609,013 3,194,592 13.0% 3,378,512 6.8%
Shares outstanding(2) 37,612,488 38,301,132 -1.8% 40,736,528 -7.7%
Cash and liquid funds 278,237 101,882 NMF 107,910 NMF
NCC ratio 2 12.8% 15.9% -3.1 ppts 15.6% -2.8 ppts
Georgia Capital Performance 4Q24 4Q23 Change FY24 FY23 Change
Total portfolio value creation 460,849 223,132 NMF 435,322 680,515 -36.0%
of which, listed and observable businesses 302,564 161,316 87.6% 368,985 553,255 -33.3%
of which, private businesses 158,285 61,816 NMF 66,337 127,260 -47.9%
Investments 9,501 2,135 NMF 16,933 22,588 -25.0%
Divestments (168,037) - NMF (168,037) (4,168) NMF
Buybacks 3 25,680 22,483 14.2% 136,523 76,477 78.5%
Dividend income 9,826 34,148 -71.2% 201,752 235,883 -14.5%
of which, recurring dividend income 4 9,826 34,148 -71.2% 179,156 179,822 -0.4%
of which, one-off dividend income - - NMF 22,596 56,061 -59.7%
Net income 435,588 208,305 NMF 350,324 615,589 -43.1%
Private portfolio companies' performance(1, 5 ) 4Q24 4Q23 Change FY24 FY23 Change
Large portfolio companies
Revenue 418,976 354,359 18.2% 1,499,308 1,337,010 12.1%
EBITDA 54,327 32,812 65.6% 180,733 153,868 17.5%
Net operating cash flow 73,567 32,603 NMF 196,045 96,671 NMF
Investment stage portfolio companies
Revenue 50,754 44,450 14.2% 186,667 155,280 20.2%
EBITDA 16,738 14,860 12.6% 64,419 51,995 23.9%
Net operating cash flow 15,816 10,399 52.1% 74,321 50,609 46.9%
Total portfolio 6
Revenue 595,008 547,088 8.8% 2,250,715 2,067,648 8.9%
EBITDA 84,325 55,009 53.3% 310,903 248,647 25.0%
Net operating cash flow 84,005 35,925 NMF 298,519 139,391 NMF
KEY POINTS
Ø NAV per share (GEL) increased 15.0% in 4Q24, reflecting the excellent
operating performance of our portfolio companies
Ø Outstanding quarterly results across our private portfolio with an 8.8% and
53.3% y-o-y increase in aggregated revenues and EBITDA in 4Q24, respectively,
leading to a more than doubling of net operating cash flow
Ø NCC ratio improved by 3.1 ppts q-o-q to 12.8% as at 31-Dec-24 (2.8 ppts
improvement y-o-y), despite the launch of the US$ 25 million share buyback
programme in 4Q24, reflecting the receipt of c.US$ 63 million net proceeds
from the beer and distribution business disposal and an 8.5% q-o-q increase in
portfolio value
Ø Quarterly dividend income of GEL 9.8 million in 4Q24, contributing to FY24
total recurring dividend income to GEL 179.2 million
Ø 1.8 million shares repurchased during 4Q24 and 1Q25 (total bought back
since demerger now 12.1 million shares (US$ 143 million cost), representing
25.3 7 % of GCAP's peak issued share capital)
Conference call: An investor/analyst conference call will be held on
24-FEB-2025, at 15:00 UK / 16:00 CET / 10:00 US Eastern Time. Please register
at the Registration Link
(https://gcap-ge.zoom.us/webinar/register/WN_sWlDl8ZDT1ywu_X5BrH-0A) to attend
the event. Further details are available on the Group's webpage
(https://georgiacapital.ge/) .
CHAIRMAN AND CEO'S STATEMENT
Georgia Capital's 4Q24 results demonstrate very strong operational and
financial performances and reflect significant achievements in delivering on
our strategic priorities.
NAV per share (GEL) increased 15.0% to GEL 95.95 in 4Q24. The increase in NAV
per share (GEL) in 4Q24 reflects excellent underlying operating performances
throughout the portfolio. Value creation in our listed and observable
portfolio amounted to GEL 302.6 million (9.5 ppts positive impact on the NAV
per share), driven by a 28.2% increase in Lion Finance Group PLC's (formerly
known as Bank of Georgia Group PLC) share price in 4Q24 and GEL 28.0 million
value creation in the water utility business, supported by its strong
operating performance. Value creation across our private portfolio companies
amounted to GEL 158.3 million (+5.0 ppts impact), reflecting the robust
operating performances of our high-quality, resilient assets as detailed
below. The NAV per share growth was also driven by our continuing share
buyback and cancellation programme (+1.0 ppts impact), partially offset by
management platform-related costs, net interest expense and the impact of
foreign currency exchange rate movements on GCAP's net debt (-0.8 ppts impact
in total). In GBP terms, the NAV per share growth in 4Q24 was 18.9%, further
reflecting GEL's 3.4% appreciation against GBP during the quarter. Overall,
throughout the six-year history of GCAP, NAV per share (GEL) has grown at a
13.7% CAGR.
Our private portfolio companies continue to deliver superior operating
performance. In 4Q24, aggregated revenue was up by 8.8% y-o-y to GEL 595.0
million, while EBITDA increased by 53.3% y-o-y to GEL 84.3 million. This
resulted in quarterly aggregated net operating cash flows of GEL 84.0 million,
more than doubling y-o-y in 4Q24.
Ø Within our large portfolio companies, economic growth, a substantial
ramp-up in the performance of the pharmacy stores launched in late 2023, and
overall optimisation of the retail chain led to a 53.1% y-o-y EBITDA growth in
our retail (pharmacy) business in 4Q24. Our insurance businesses also had a
very strong fourth quarter, with combined pre-tax profit up 20.2% y-o-y,
reflecting positive developments in both the P&C and medical insurance
segments, the latter partially boosted by the acquisition of the Ardi
insurance portfolio in April 2024. Within our hospitals business, the 4Q24
y-o-y EBITDA growth of 119.8% reflected the business' gradual return to normal
operational levels following the completion of mandatory renovations across
all hospitals, alongside increased demand for high-margin outpatient services
and further improvement in cost efficiencies.
Ø Our investment stage portfolio companies also delivered strong performances
in 4Q24. EBITDA in our education business grew 20.9% y-o-y, driven by organic
growth from strong learner intakes, increased utilisation, and business
expansion through the launch and acquisition of two new campuses last year.
Our clinics and diagnostics business posted 46.0% y-o-y EBITDA growth,
supported by a proactive approach to customer acquisition and service
enhancements. In US$ terms, EBITDA of our renewable energy business declined
by 16.9% y-o-y in 4Q24, as unfavourable weather conditions during the quarter
negatively impacted electricity generation.
Ø Other businesses also demonstrated solid performances and delivered an
80.7% y-o-y increase in EBITDA in 4Q24. Growth was particularly strong in our
auto services business, which paid its first-ever dividend to GCAP in 4Q24.
In FY24, our private portfolio companies posted an 8.9% y-o-y aggregated
revenue growth, maintaining the same y-o-y growth rate as in FY23. Meanwhile,
EBITDA in FY24 was up by 25.0% y-o-y, marking a significant increase on the
2.2% y-o-y growth in FY23. This translated into a 114.2% y-o-y growth in the
aggregated net operating cash flow in FY24, following a 32.3% y-o-y decline in
FY23. Details on how the operating performance of the different private
portfolio businesses translated into their NAVs can be found in the pages that
follow.
Completion of the beer and distribution business disposal and receipt of full
sales proceeds. In October 2024, we announced that we have agreed to sell 80%
of our holding (an effective 73.9% equity stake) in the beer and distribution
business to Royal Swinkels, a high-quality international investor and
strategic buyer. The sale is consistent with GCAP's capital-light investment
strategy and represents another successful completion of the full investment
cycle of our private assets, from acquisition and development to cash exit.
The net sale proceeds of c.US$ 63 million were received in December 2024,
significantly strengthening GCAP's liquidity position. As a result, GCAP's
cash and liquid funds balance increased by 173.1% to GEL 278.2 million in
4Q24. The remaining 20% holding in the business remains subject to a put/call
structure. The successful disposal of the beer and distribution business
during a challenging political and geopolitical environment once again
underlines the resilience of our portfolio while also marking further progress
toward our strategic priority of divesting subscale portfolio companies.
NCC ratio decreased to 12.8% in 4Q24. A significant improvement in GCAP's
liquidity, coupled with an 8.5% q-o-q increase in portfolio value in 4Q24, led
to a 3.1 ppts improvement in the NCC ratio. On a year-on-year basis, the NCC
ratio improved by 2.8 ppts, notwithstanding the substantial cash outflow for
share buybacks in FY24, as well as the launch of the US$ 25 million share
buyback programme in 4Q24.
Progress on share buybacks. In December, reflecting strong liquidity levels at
GCAP and the reduction in the NCC ratio, we launched a US$ 25 million share
buyback and cancellation programme. Since the beginning of 2024, we have now
repurchased 4.7 million shares under our buyback programmes, for a total
consideration of GEL 177.2 million (US$ 64.0 million). This takes the capital
returned to our shareholders since demerger to a total of US$ 143 million or
12.1 million GCAP shares representing 25.3% of GCAP's issued share capital at
its peak. As a result, the gross number of issued shares, including those held
by the management trust, now stands at 38.4 million, below the 39.4 million
shares in issue at the time of the demerger. In essence, this reflects the
repurchase of more shares than we issued in 2019-2020 to purchase the then
outstanding minority stake in Georgia Healthcare Group.
From a macroeconomic perspective, Georgia's economic performance remained
strong in 2024, with the preliminary real GDP growth of 9.5% y-o-y. Despite
the ongoing regional geopolitical volatility, robust banking loan growth,
declining unemployment, and rising wages supported domestic consumption and
this strong economic growth in 2024. As a result of the ongoing political
uncertainty, the economic outlook points to some moderation in economic growth
expectations for 2025. While inflation has remained below target levels since
April 2023, recent months have seen an increase in headline inflation. During
last year's pre-election period, the National Bank of Georgia (NBG) actively
intervened to manage some currency uncertainty, resulting in a reduction of
international reserves to US$ 4.4 billion, an 8.7% y-o-y decrease as of
January 2025. The exchange rate depreciated by 4.2% y-o-y as of December 2024,
reflecting this uncertainty, despite the strong underlying economic
fundamentals. Meanwhile, declining remittances, due to the normalisation of
money transfers from Russia, were offset by increasing revenues from exports
and tourism. Foreign exchange inflows remained stable, supporting the external
balance sheet. The policy stance remains appropriate, with the GEL policy rate
at 8% and a strengthening fiscal position, as public debt reaches its lowest
level since 2014 at 36% of GDP.
Outlook. The excellent performance of our portfolio companies, coupled with
our delivery on the sale of our beer and distribution business - in line with
our strategy, were the key drivers of our outstanding 4Q24 results. I am
particularly pleased that we have delivered very strong levels of cash
generation; made substantial progress in reducing our Net Capital Commitment
ratio; and continued to focus on capital repatriation to our shareholders
under the GEL 300 million capital return package, announced in May 2024. This
performance was underpinned in 2024 by the resilience of the Georgian economy,
which has demonstrated consistent and substantial growth in recent years
despite ongoing geopolitical tensions and uncertainties. Against this
background, I believe that Georgia Capital has all the key fundamentals in
place to continue delivering consistent NAV per share growth over the medium
to long term - and to progress further towards achieving our key strategic
priorities.
Irakli Gilauri, Chairman and CEO
DISCUSSION OF GROUP RESULTS
The discussion below analyses the Group's unaudited net asset value at
31-Dec-24 and its income for the fourth quarter and full year period then
ended on an IFRS basis (see "Basis of Presentation" on page 30 below).
Net Asset Value (NAV) Statement
NAV statement summarises the Group's IFRS equity value (which we refer to as
Net Asset Value or NAV in the NAV Statement below) at the opening and closing
dates for the fourth quarter (30-Sep-24 and 31-Dec-24). The NAV Statement
below breaks down NAV into its components and provides a roll forward of the
related changes between the reporting periods. For the NAV Statement for the
full year of 2024 see page 30.
NAV STATEMENT 4Q24
GEL '000, unless otherwise noted Sep-24 1. Value creation(( 8 )) 2a. 2b. 2c. Dividends 3. Operating expenses 4. Liquidity/ FX/Other Dec-24 Change
(Unaudited) Investment and Divestments Buyback %
Listed and Observable Portfolio Companies
Lion Finance Group 1,146,471 274,564 - - - - - 1,421,035 23.9%
Water Utility 160,000 28,000 - - - - - 188,000 17.5%
Total Listed and Observable Portfolio Value 1,306,471 302,564 - - - - - 1,609,035 23.2%
Listed and Observable Portfolio value change % 23.2% 0.0% 0.0% 0.0% 0.0% 0.0% 23.2%
Private Portfolio Companies
Large Companies 1,308,808 133,971 - - (8,848) - 818 1,434,749 9.6%
Retail (Pharmacy) 658,174 57,596 - - - - 360 716,130 8.8%
Insurance (P&C and Medical) 407,378 29,316 - - (8,848) - 99 427,945 5.0%
Of which, P&C Insurance 310,325 4,190 - - (1,474) - 99 313,140 0.9%
Of which, Medical Insurance 97,053 25,126 - - (7,374) - - 114,805 18.3%
Hospitals 243,256 47,059 - - - - 359 290,674 19.5%
Investment Stage Companies 525,344 24,314 7,501 - - - 233 557,392 6.1%
Renewable Energy 239,763 5,942 6,901 - - - - 252,606 5.4%
Education 181,014 (183) 600 - - - 153 181,584 0.3%
Clinics and Diagnostics 104,567 18,555 - - - - 80 123,202 17.8%
Other Companies 327,277 - (166,037) - (978) - 52 160,314 -51.0%
Total Private Portfolio Value 2,161,429 158,285 (158,536) - (9,826) - 1,103 2,152,455 -0.4%
Private Portfolio value change % 7.3% -7.3% 0.0% -0.5% 0.0% 0.1% -0.4%
Total Portfolio Value (1) 3,467,900 460,849 (158,536) - (9,826) - 1,103 3,761,490 8.5%
Total Portfolio value change % 13.3% -4.6% 0.0% -0.3% 0.0% 0.0% 8.5%
Net Debt (2) (269,380) - 155,936 (25,933) 9,826 (4,938) (19,936) (154,425) -42.7%
of which, Cash and liquid funds 101,882 - 164,803 (25,933) 38,675 (4,938) 3,748 278,237 NMF
of which, Loans issued 11,714 - (8,867) - - - (2,847) - NMF
of which, Accrued dividend income 28,849 - - - (28,849) - - - NMF
of which, Gross Debt (411,825) - - - - - (20,837) (432,662) 5.1%
Net other assets/ (liabilities) (3) (3,928) - 2,600 253 - (3,407) 6,430 1,948 NMF
of which, share-based comp. - - - - - (3,407) 3,407 - NMF
Net Asset Value (1)+(2)+(3) 3,194,592 460,849 - (25,680) - (8,345) (12,403) 3,609,013 13.0%
NAV change % 14.4% 0.0% -0.8% 0.0% -0.3% -0.4% 13.0%
Shares outstanding(8) 38,301,132 - - (688,644) - - - 37,612,488 -1.8%
Net Asset Value per share, GEL 83.41 12.03 (0.00) 0.84 (0.00) (0.22) (0.10) 95.95 15.0%
NAV per share, GEL change % 14.4% 0.0% 1.0% 0.0% -0.3% -0.1% 15.0%
NAV per share (GEL) was up 15.0% q-o-q in 4Q24, reflecting a GEL 460.8 million
value creation across our portfolio companies with a positive 14.4 ppts impact
and share buybacks (+1.0 ppts impact). The NAV per share (GEL) growth was
slightly offset by a) management platform-related costs and net interest
expense (-0.5 ppts impact in total) and b) GEL's depreciation against US$,
resulting in a foreign currency loss of GEL 9.2 million on GCAP net debt (-0.3
ppts impact).
Portfolio overview
Total portfolio value amounted to GEL 3.8 billion in 4Q24, up by GEL 293.6
million (up 8.5%) q-o-q:
· The value of the listed and observable portfolio increased by GEL
302.6 million (up 23.2%), driven by the continued growth in Lion Finance
Group's share price and GEL 28.0 million value creation in Water Utility,
reflecting its strong operating performance during the quarter on the back of
the increased tariffs for corporates effective from 1 January 2024.
· The value of the private portfolio decreased by GEL 9.0 million
(down 0.4%). This reflects GEL 176.2 9 million decrease from the divestment
of an 80% holding in the beer and distribution business and the collection of
GEL 9.8 million dividends from the private portfolio companies. The decrease
was offset by GEL 158.3 million value creation and GEL 9.5 million investments
in the portfolio companies.
Consequently, as of 31-Dec-24, the private portfolio value amounted to GEL 2.2
billion (57.2% of the total), and the listed and observable portfolio value
totalled GEL 1.6 billion (42.8% of the total portfolio value).
1) Value creation
Value creation from the listed and observable portfolio amounted to GEL 302.6
million in 4Q24, reflecting:
· GEL 274.6 million value creation, driven by a 28.2% increase in
Lion Finance Group's share price in 4Q24, and
· GEL 28.0 million value creation in Water Utility, as described
above.
Value creation across our private portfolio companies amounted to GEL 158.3
million in 4Q24. This reflects:
· Strong operating performance of our private assets, delivering
substantial growth in aggregated revenues (up 8.7% y-o-y) and EBITDA (up 53.3%
y-o-y) in 4Q24, which translated into a GEL 277.3 million operating
performance-related value creation.
· GEL 119.0 million negative net impact from changes in implied
valuation multiples and FX rates.
As a result, the total portfolio value creation amounted to GEL 460.8 million
in 4Q24.
The table below summarises value creation drivers in our businesses in 4Q24:
Portfolio Businesses Operating Performance(( 10 )) Multiple Change Value Creation
and FX(( 11 ))
GEL '000, unless otherwise noted (unaudited) (1) (2) (1)+(2)
Listed and Observable portfolio 302,564
Lion Finance Group 274,564
Water Utility 28,000
Private portfolio 277,258 (118,973) 158,285
Large Portfolio Companies 229,042 (95,071) 133,971
Retail (pharmacy) 99,736 (42,140) 57,596
Insurance (P&C and Medical) 20,579 8,737 29,316
Of which, P&C Insurance 12,337 (8,147) 4,190
Of which, Medical Insurance 8,242 16,884 25,126
Hospitals 108,727 (61,668) 47,059
Investment Stage Portfolio Companies 46,603 (22,289) 24,314
Renewable Energy - 5,942 5,942
Education 25,558 (25,741) (183)
Clinics and Diagnostics 21,045 (2,490) 18,555
Other 1,613 (1,613) -
Total portfolio 277,258 (118,973) 460,849
Valuation overview 12
In 4Q24, valuation assessments of our large and investment stage portfolio
companies were performed by a third-party independent valuation firm, Kroll,
in line with International Private Equity Valuation ("IPEV") guidelines. The
independent valuation assessments, which serve as an input for Georgia
Capital's estimate of fair value, were performed by applying a combination of
an income approach (DCF) and a market approach (listed peer multiples and, in
some cases, precedent transactions). The independent valuations of large and
investment stage businesses are performed on a semi-annual basis. In line with
our strategy, from time to time we may receive offers from interested buyers
for our private portfolio companies, which would be considered in the overall
valuation assessment, where appropriate.
We perform quarterly sensitivity analyses on our valuations. In light of
prevailing market conditions, the 4Q24 assessment indicated that a
100-basis-point change in discount rates used in the income approach for
valuing unquoted investments would result in a GEL c.160 million, or 4.3%,
change in the fair value of equity investments.
The enterprise value ("EV") and equity value development of our businesses in
4Q24 is summarised in the following table:
Enterprise Value (EV) Equity Value
GEL '000, unless otherwise noted 31-Dec-24 30-Sep-24 Change % 31-Dec-24 30-Sep-24 Change % % share in total portfolio
(Unaudited)
Listed and Observable portfolio 1,609,035 1,306,471 23.2% 42.8%
Lion Finance Group 1,421,035 1,146,471 23.9% 37.8%
Water Utility 188,000 160,000 17.5% 5.0%
Private portfolio 3,613,737 3,390,846 6.6% 2,152,455 2,161,429 -0.4% 57.2%
Large portfolio companies 2,076,069 1,950,977 6.4% 1,434,749 1,308,808 9.6% 38.1%
Retail (pharmacy) 1,021,000 972,559 5.0% 716,130 658,174 8.8% 19.0%
Insurance (P&C and Medical) 463,144 433,910 6.7% 427,945 407,378 5.0% 11.4%
Of which, P&C Insurance 313,000 309,813 1.0% 313,140 310,325 0.9% 8.3%
Of which, Medical Insurance 150,144 124,097 21.0% 114,805 97,053 18.3% 3.1%
Hospitals 591,925 544,508 8.7% 290,674 243,256 19.5% 7.7%
Investment stage portfolio companies 865,238 811,983 6.6% 557,392 525,344 6.1% 14.8%
Renewable Energy 444,158 431,327 3.0% 252,606 239,763 5.4% 6.7%
Education 13 234,405 209,206 12.0% 181,584 181,014 0.3% 4.8%
Clinics and Diagnostics 186,675 171,450 8.9% 123,202 104,567 17.8% 3.3%
Other 672,430 627,886 7.1% 160,314 327,277 -51.0% 4.3%
Total portfolio 3,761,490 3,467,900 8.5% 100.0%
Private large portfolio companies (38.1% of total portfolio value)
Retail (Pharmacy) (19.0% of total portfolio value) - The EV of Retail
(Pharmacy) was up by 5.0% to GEL 1,021.0 million in 4Q24, reflecting the
strong operating performance of the business. Economic growth and a
substantial ramp-up of the pharmacy stores launched in late 2023 led to a 5.4%
y-o-y revenue increase in 4Q24. Gross profit margin improved by 4.2 ppts y-o-y
to 31.4% in 4Q24, further supported by the enhanced sales and profitability of
para-pharmacy products, alongside successful renegotiations of trading terms
with key suppliers across major product categories. Operating expenses were up
10.4% y-o-y in 4Q24, due to increased rent and salary costs related to the
chain expansion and the launch of a new warehouse in late 2023. Consequently,
4Q24 EBITDA increased by 53.1% y-o-y to GEL 24.5 million. See page 12 for
details. LTM EBITDA (incl. IFRS 16) was up 9.0% to GEL 121.0 million in 4Q24.
Net debt (incl. IFRS 16) decreased by 2.9% to GEL 297.9 million as at
31-Dec-24, resulting from robust cash flow generation during the quarter. As a
result, the fair value of GCAP's 97.8% holding increased by 8.8% to GEL 716.1
million in 4Q24. The implied LTM EV/EBITDA valuation multiple (incl. IFRS 16)
decreased to 8.4x as of 31-Dec-24, down from 8.8x as of 30-Sep-24 and 9.7x as
of 31-Dec-23.
Insurance (P&C and Medical) (11.4% of total portfolio value) - The
insurance business combines: a) P&C Insurance valued at GEL 313.1 million
and b) Medical Insurance valued at GEL 114.8 million.
P&C Insurance revenues were up 28.3% y-o-y to GEL 40.1 million in 4Q24,
driven by the growth in the motor, agricultural and credit life insurance
lines. The revenue of the medical insurance business more than doubled y-o-y
and amounted to GEL 56.1 million in 4Q24, reflecting organic growth, c.10%
increase in insurance policy prices and the positive impact of the acquisition
of Ardi insurance portfolio in April 2024, the latter contributing GEL 24.1
million to the 4Q24 y-o-y revenue growth. The combined ratio for P&C
insurance was up by 0.9 ppts y-o-y in 4Q24, mainly due to higher motor
insurance claims in the corporate client segment. The combined ratio for
medical insurance increased by 1.8 ppts y-o-y in 4Q24, primarily driven by a
higher loss ratio due to the increased flu activity during the quarter. As a
result, the pre-tax profit of the combined insurance business increased by
20.2% y-o-y to GEL 10.7 million in 4Q24. See page 14 for details. The equity
value of the combined insurance business was up 5.0% q-o-q to GEL 427.9
million in 4Q24 (Ardi's equity value is measured at the price of recent
investment). This translated into an implied LTM P/E valuation multiple of
11.1x at 31-Dec-24 (up from 10.9x as of 30-Sep-24 and down from 12.4x as of
31-Dec-23).
Hospitals (7.7% of total portfolio value) - Hospitals' EV increased by 8.7% to
GEL 591.9 million in 4Q24, driven by the strong operating performance of the
business. The total revenue increased by 16.2% y-o-y in 4Q24, reflecting the
business' gradual return to its normal operational levels following mandatory
regulatory renovations across all hospitals, most of which occurred between
the second half of 2023 and the first half of 2024. These renovations led to
the phased closure of certain sections of our healthcare facilities, resulting
in reduced patient intake during that period. The gross profit margin also
increased in 4Q24 (up 6.9 ppts y-o-y to 35.8%), further reflecting enhanced
offerings of high-margin outpatient services and the improved cost
efficiencies achieved by the business. Operating expenses (excl. IFRS 16) were
up by 2.4% y-o-y in 4Q24, primarily due to higher salary costs associated with
overall business growth. This translated into a 119.8% y-o-y EBITDA (excl.
IFRS 16) growth in 4Q24. See page 15 for details. Consequently, LTM EBITDA
(incl. IFRS 16) was up by 20.0% to GEL 56.6 million in 4Q24. Net debt remained
largely flat, down 0.8% q-o-q to GEL 271.6 million as at 31-Dec-24. As a
result, the equity value of Hospitals was assessed at GEL 290.7 million in
4Q24 (up 19.5% q-o-q), translating into an implied LTM EV/EBITDA multiple
(incl. IFRS 16) of 10.5x at 31-Dec-24 (down from 11.5x at 30-Sep-24 and 13.8x
at 31-Dec-23).
Private investment stage portfolio companies (14.8% of total portfolio value)
Renewable Energy (6.7% of total portfolio value) - The EV of the business
remained largely flat, up by 0.1% to US$ 158.2 million in 4Q24. In US$ terms,
the 4Q24 revenue decreased by 11.9% y-o-y to US$ 2.6 million, resulting from
an 11.1% y-o-y decrease in electricity generation due to unfavourable weather
conditions during the quarter. Operating expenses were well-managed, down 1.1%
y-o-y. These developments translated into a 16.9% y-o-y decrease in EBITDA in
4Q24. See page 17 for details. The pipeline renewable energy projects
continued to be measured at an equity investment cost (US$ 19.3 million in
aggregate as at 31-Dec-24). Net debt decreased by 2.8% q-o-q to US$ 68.2
million in 4Q24, reflecting GEL's depreciation against US$ during the quarter.
As a result, the equity value of the business was assessed at GEL 252.6
million in 4Q24 (up 5.4% q-o-q), (up 2.5% q-o-q to US$ 90.0 million in US$
terms). The blended EV/EBITDA implied valuation multiple of the operational
assets was 11.3x as of 31-Dec-24 (up from 11.2x as of 30-Sep-24 and down from
12.6x as of 31-Dec-23).
Education (4.8% of total portfolio value) - The EV of Education was up by
12.0% to GEL 234.4 million in 4Q24, reflecting the strong operating
performance of the business, while taking into account the first-time
valuation of one of the campuses launched in 2H23, which was previously
measured at an equity investment cost. The 4Q24 revenue increased by 16.4%
y-o-y resulting from a) organic growth through strong learner intakes and a
ramp-up of utilisation and b) an expansion of the business through the launch
and acquisition of two new campuses in 2023. The expansion of the business
also led to a 14.0% y-o-y increase in operating expenses in 4Q24.
Consequently, the 4Q24 EBITDA grew by 21.3% y-o-y. See page 18 for details.
LTM EBITDA was up by 14.0% to GEL 18.4 million in 4Q24. Net debt was up by
52.6% q-o-q to GEL 20.7 million in 4Q24, mainly reflecting the investments
related to the expansion of existing campuses in the midscale and affordable
segments, as well as the first-time valuation of the new campus, as outlined
above. As a result, GCAP's stake in the education business was valued at GEL
181.6 million at 31-Dec-24 (up 0.3% q-o-q). The implied valuation multiple
decreased to 12.8x as of 31-Dec-24, down from 13.0x as of 30-Sep-24 and 16.7x
as of 31-Dec-23.
Clinics and Diagnostics business (3.3% of total portfolio value) - The EV of
the business increased by 8.9% to GEL 186.7 million in 4Q24, resulting from
its strong operating performance. The revenue and EBITDA (ex. IFRS 16) of the
combined clinics and diagnostics business were up 22.9% and 46.0% y-o-y,
respectively. This growth reflects a) the increased demand for high
revenue-generating services driven by the business' proactive approach to
customer acquisition and service enhancements, and b) the ramp-up of the two
new ambulatory centres launched in 2023. Operating expenses were up by 20.1%
in 4Q24, reflecting increased salary and rent expenses in line with the
expansion of the business. See page 19 for details. The LTM EBITDA (incl. IFRS
16) of the business increased by 9.1% to GEL 17.6 million in 4Q24. The net
debt (incl. IFRS 16) was down by 5.2% q-o-q at GEL 61.0 million, reflecting
the strong operating performance as well as the collection of delayed
receivables from the State. As a result, the equity value of Clinics and
Diagnostics was assessed at GEL 123.2 million (up 17.8% q-o-q), translating
into an implied LTM EV/EBITDA multiple (incl. IFRS 16) of 10.6x at 31-Dec-24
(10.6x as at 30-Sep-24 and 14.5x as of 31-Dec-23).
Other businesses (4.3% of total portfolio value) - Of the "other" private
portfolio businesses, Auto Service is valued based on LTM EV/EBITDA. Wine and
Housing Development are valued based on DCF, Hospitality is valued based on
NAV. Following its disposal, the beer and distribution business, previously
valued using the LTM EV/EBITDA multiple, is now assessed based on the recent
transaction price. See performance highlights of other businesses on page 21.
The portfolio value of other businesses decreased by 51.0% to GEL 160.3
million in 4Q24, primarily due to the divestment of an 80% holding in the beer
and distribution business in 4Q24.
Listed and observable portfolio companies (42.8% of total portfolio value)
Lion Finance Group (37.8% of total portfolio value) - In 3Q24, Lion Finance
Group delivered an annualised ROAE of 32.1% and a q-o-q loan book growth of
4.3% in Georgia and 6.1% in Armenia on a constant currency basis. In 4Q24,
Lion Finance Group's share price was up by 28.2% q-o-q to GBP 47.1 at
31-Dec-24, which led to a 23.9% q-o-q increase in the value of GCAP's stake in
Lion Finance Group to 1.4 billion as at 31-Dec-24. The LTM P/E valuation
multiple was at 3.2x as of 31-Dec-24. Lion Finance Group's public announcement
of their 4Q24 results, when published, will be available on Lion Finance
Group's website (https://bankofgeorgiagroup.com/results/earnings) .
Water Utility (5.0% of total portfolio value) - The equity value of the
business increased by GEL 28.0 million to GEL 188.0 million in 4Q24. This
valuation assessment was performed by applying the put option valuation to
GCAP's 20% holding (where GCAP has a clear exit path through a put and call
structure at pre-agreed EBITDA multiples) and takes into account the strong
operating performance of the business in 4Q24. GCAP's put option is
exercisable in 2025 or 2026.
2) Investments 14
In 4Q24, GCAP invested GEL 9.5 million in private portfolio companies.
· GEL 6.9 million was invested in Renewable Energy for the
development of pipeline projects.
· GEL 2.0 million was invested in the other businesses.
· GEL 0.6 million was allocated to the education business.
3) Share buybacks
During 4Q24, 688,644 shares with a total value of US$ 9.3 million (GEL 25.7
million) were bought back under GCAP's share buyback and cancellation
programmes. Subsequent to FY24, additional 1,072,332 shares with a value of
US$ 15.9 million (GEL 45.3 million) have been repurchased under the ongoing
share buyback programme as at 21 February 2025.
4) Dividends
In 4Q24, GCAP recorded GEL 9.8 million dividend income from its portfolio
companies:
· GEL 8.8 million dividend was received from the insurance
business, of which GEL 7.4 million was collected from Medical Insurance and
GEL 1.5 million from P&C Insurance.
· GEL 1.0 million dividend was collected from the auto service
business.
FY24 NAV STATEMENT HIGHLIGHTS
GEL '000, unless otherwise noted Dec-23 1. Value creation(( 15 )) 2a. 2b. 2c. Dividend 3. Operating expenses 4. Liquidity/ FX/Other Dec-24 Change
(Unaudited) Investment and divestments Buyback %
Total Listed and Observable Portfolio Value 1,384,847 368,985 - - (144,797) - - 1,609,035 16.2%
Listed and Observable Portfolio value change % 26.6% 0.0% 0.0% -10.5% 0.0% 0.0% 16.2%
Total Private Portfolio Companies 2,287,098 66,337 (151,104) - (56,955) - 7,079 2,152,455 -5.9%
Of which, Large Companies 1,436,231 30,237 - - (35,408) - 3,689 1,434,749 -0.1%
Of which, Investment Stage Companies 566,614 (10,501) 11,933 - (12,258) - 1,604 557,392 -1.6%
Of which, Other Companies 284,253 46,601 (163,037) - (9,289) - 1,786 160,314 -43.6%
Private Portfolio value change % 2.9% -6.6% 0.0% -2.5% 0.0% 0.3% -5.9%
Total Portfolio Value 3,671,945 435,322 (151,104) - (201,752) - 7,079 3,761,490 2.4%
Total Portfolio value change % 11.9% -4.1% 0.0% -5.5% 0.0% 0.2% 2.4%
Net Debt (296,808) - 148,504 (135,718) 201,752 (21,379) (50,776) (154,425) -48.0%
Net Asset Value 3,378,512 435,322 - (136,523) - (35,279) (33,019) 3,609,013 6.8%
NAV change % 12.9% 0.0% -4.0% 0.0% -1.0% -1.0% 6.8%
Shares outstanding(15) 40,736,528 - - (3,790,417) - - 666,377 37,612,488 -7.7%
Net Asset Value per share, GEL 82.94 10.68 (0.00) 4.81 (0.00) (0.87) (1.60) 95.95 15.7%
NAV per share, GEL change % 12.9% 0.0% 5.8% 0.0% -1.0% -1.9% 15.7%
NAV per share (GEL) was up by 15.7% in FY24, reflecting a GEL 435.3 million
value creation across our portfolio companies with a positive 12.9 ppts impact
and share buybacks (+5.8 ppts impact). The NAV per share growth was slightly
offset by a) management platform-related costs and net interest expense with a
negative 1.9 ppts impact and b) GEL's depreciation against US$, resulting in a
foreign currency loss of GEL 15.1 million on GCAP net debt (-0.5 ppts impact).
Portfolio overview
Total portfolio value increased by GEL 89.5 million (up 2.4%) in FY24:
· The value of GCAP's holding in Lion Finance Group was up by GEL
195.2 million, reflecting the net impact of GEL 340.0 million value creation
and GEL 144.8 million cash and buyback dividend income from the Bank in FY24.
· The value of the water utility business increased by GEL 29.0
million, reflecting its strong operating performance during the year.
· The value of the private portfolio decreased by GEL 134.6 million
in FY24, mainly reflecting the divestment of an 80% holding in the beer and
distribution business and the collection of GEL 57.0 million dividends from
the private portfolio companies. The decrease was partially offset by GEL 66.3
million value creation and GEL 16.9 million investments in the portfolio
companies.
1) Value creation
Total portfolio value creation amounted to GEL 435.3 million in FY24.
· An 18.5% increase in Lion Finance Group's share price, supported
by a 3.3% appreciation of GBP against GEL in FY24, led to a GEL 340.0 million
value creation.
· GEL 29.0 million value was created in our water utility business.
· The value creation in the private portfolio amounted to GEL 66.3
million in FY24, reflecting a net impact of:
o GEL 671.5 million operating performance-related increase in the value of
our private assets.
o GEL 605.1 million value reduction from changes in valuation inputs,
including the negative impact from the increased country risk premium in FY24.
The table below summarises value creation drivers in our businesses in FY24:
Portfolio Businesses Operating Performance(( 16 )) Multiple Change Value Creation
and FX(( 17 ))
GEL '000, unless otherwise noted (unaudited) (1) (2) (1)+(2)
Listed and Observable 368,985
Lion Finance Group 339,985
Water Utility 29,000
Private 671,481 (605,144) 66,337
Large Portfolio Companies 434,148 (403,911) 30,237
Retail (pharmacy) 170,146 (159,407) 10,739
Insurance (P&C and Medical) 129,373 (54,756) 74,617
Of which, P&C Insurance 111,728 (66,982) 44,746
Of which, Medical Insurance 17,645 12,226 29,871
Hospitals 134,629 (189,748) (55,119)
Investment Stage Portfolio Companies 152,279 (162,780) (10,501)
Renewable Energy 37,205 (50,975) (13,770)
Education 49,255 (58,108) (8,853)
Clinics and Diagnostics 65,819 (53,697) 12,122
Other 85,054 (38,453) 46,601
Total portfolio 671,481 (605,144) 435,322
The enterprise value and equity value development of our businesses in FY24 is
summarised in the following table:
Enterprise Value (EV) Equity Value
GEL '000, unless otherwise noted 31-Dec-24 31-Dec-23 Change % 31-Dec-24 31-Dec-23 Change % % share in total portfolio
(Unaudited)
Listed and Observable portfolio 1,609,035 1,384,847 16.2% 42.8%
Lion Finance Group 1,421,035 1,225,847 15.9% 37.8%
Water Utility 188,000 159,000 18.2% 5.0%
Private portfolio 3,613,737 3,463,259 4.3% 2,152,455 2,287,098 -5.9% 57.2%
Large portfolio companies 2,076,069 2,021,278 2.7% 1,434,749 1,436,231 -0.1% 38.1%
Retail (pharmacy) 1,021,000 1,043,800 -2.2% 716,130 714,001 0.3% 19.0%
Insurance (P&C and Medical) 463,144 358,566 29.2% 427,945 377,874 13.3% 11.4%
Of which, P&C Insurance 313,000 285,566 9.6% 313,140 285,566 9.7% 8.3%
Of which, Medical Insurance 150,144 73,000 NMF 114,805 92,308 24.4% 3.1%
Hospitals 591,925 618,912 -4.4% 290,674 344,356 -15.6% 7.7%
Investment stage portfolio companies 865,238 856,787 1.0% 557,392 566,614 -1.6% 14.8%
Renewable Energy 444,158 456,236 -2.6% 252,606 266,627 -5.3% 6.7%
Education 18 234,405 228,799 2.5% 181,584 189,226 -4.0% 4.8%
Clinics and Diagnostics 186,675 171,752 8.7% 123,202 110,761 11.2% 3.3%
Other 672,430 585,194 14.9% 160,314 284,253 -43.6% 4.3%
Total portfolio 3,761,490 3,671,945 2.4% 100.0%
2) Investments 19
In FY24, GCAP invested GEL 16.9 million in private portfolio companies.
· GEL 11.3 million was invested in the renewable energy business
for the development of the pipeline projects.
· GEL 5.0 million was invested in the other businesses.
· GEL 0.6 million was allocated to the education business.
3) Share buybacks
During FY24, 3,790,417 shares were bought back for a total consideration of
GEL 136.5 million.
· 3,669,889 shares with a total value of US$ 48.1 million (GEL
131.9 million) were repurchased under GCAP's buyback and cancellation
programmes during FY24.
· 120,528 shares (GEL 4.6 million in value) represent the
tax-related statutory buybacks as part of the share exercises from the
management trust, where the average cost of unawarded shares is GBP 7.9 per
share as of 31 December 2024.
4) Dividends 20
In FY24, GCAP recorded GEL 201.8 million dividend income:
Dividend income Recurring One-off Total
GEL million (unaudited)
Lion Finance Group 122.2 22.6 144.8
Of which, cash dividends 72.2 - 72.2
Of which, buyback dividends 50.0 22.6 72.6
Insurance business 25.4 - 25.4
Of which, P&C Insurance 18.0 - 18.0
Of which, Medical Insurance 7.4 - 7.4
Renewable Energy 12.3 - 12.3
Retail (Pharmacy) 10.0 - 10.0
Beer Business 8.3 - 8.3
Auto Service 1.0 - 1.0
Total 179.2 22.6 201.8
· GEL 22.6 million represents a one-off buyback dividend from Lion Finance
Group from advanced participation in their share buyback programme in 3Q24,
which temporarily decreased our stake in Lion Finance Group to 19.1% as at
30-Sep-24. Consistent with the Bank's buyback programme, GCAP's stake has
rebounded to 19.2% as at 31-Dec-24. GCAP's targeted holding level in the Bank
remains at 19.5%.
Net Capital Commitment (NCC) overview
Below we describe the components of Net Capital Commitment (NCC) as of 31
December 2024, 30 September 2024 and 31 December 2023. NCC represents an
aggregated view of all confirmed, agreed and expected capital outflows
(including a buffer for contingencies) at both Georgia Capital PLC and JSC
Georgia Capital levels
Components of NCC 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
GEL '000, unless otherwise noted (unaudited)
Total cash and liquid funds 278,237 101,882 NMF 107,910 NMF
Loans issued - 11,714 NMF 9,212 NMF
Accrued dividend income - 28,849 NMF - NMF
Gross debt (432,662) (411,825) 5.1% (413,930) 4.5%
Net debt (1) (154,425) (269,380) -42.7% (296,808) -48.0%
Guarantees issued (2) - - NMF - NMF
Net debt and guarantees issued (3)=(1)+(2) (154,425) (269,380) NMF (296,808) -48.0%
Planned investments (4) (118,480) (122,651) -3.4% (125,143) -5.3%
of which, planned investments in Renewable Energy (69,518) (74,433) -6.6% (77,637) -10.5%
of which, planned investments in Education (48,962) (48,218) 1.5% (47,506) 3.1%
Announced Buybacks (5) (67,421) (21,877) NMF (18,087) NMF
Contingency/liquidity buffer (6) (140,340) (136,485) 2.8% (134,470) 4.4%
Total planned investments, announced buybacks and contingency/liquidity buffer (326,241) (281,013) 16.1% (277,700) 17.5%
(7)=(4)+(5)+(6)
Net capital commitment (3)+(7) (480,666) (550,393) -12.7% (574,508) -16.3%
Portfolio value 3,761,490 3,467,900 8.5% 3,671,945 2.4%
NCC ratio 12.8% 15.9% -3.1 ppts 15.6% -2.8 ppts
Cash and liquid funds. Total cash and liquid funds' balance increased 2.7x
times q-o-q to GEL 278.2 million in 4Q24 (up 2.6x times in FY24), primarily
reflecting the collection of proceeds from the sale of an 80% holding in the
beer and distribution business.
Loans issued. Issued loans' balance primarily refers to loans issued to our
private portfolio companies and are lent at market terms. The balance of loans
issued was reduced to nil in 4Q24, reflecting the complete repayment of loans
by the portfolio companies.
Gross debt. In US$ terms the balance was up 2.2% q-o-q in 4Q24 (up 0.2% in
FY24), reflecting the impact of interest accrual on GCAP's
sustainability-linked bond. In GEL terms, the balance was up by 5.1% in 4Q24,
further reflecting the foreign exchange rate movements during the quarter.
Planned investments. Planned investments' balance represents expected
investments in renewable energy and education businesses over the next 2-3
years. The balance in US$ terms was down by 6.1% and 9.3% in 4Q24 and FY24,
respectively, reflecting cash outflows for the investment projects as
described above.
Announced buybacks. The balance of the announced buybacks at 31-Dec-24
reflects the unutilised share buybacks under
GCAP's US$ 25 million share buyback and cancellation programme.
Contingency/liquidity buffer. The balance reflects the provision for cash and
liquid assets in the amount of US$ 50 million, for contingency/liquidity
purposes. The balance remained unchanged in US$ terms as at 31-Dec-24.
As a result of the movements outlined above, the NCC ratio improved by 3.1
ppts q-o-q to 12.8% as of 31 December 2024 (2.8 ppts improvement in FY24).
INCOME STATEMENT (ADJUSTED IFRS/APM)
Net income under IFRS was GEL 440.0 million in 4Q24 (GEL 213.2 million net
income in 4Q23) and net income of GEL 362.3 million in FY24 (GEL 608.6 million
net income in FY23). The IFRS income statement is prepared on the Georgia
Capital PLC level and the results of all operations of the Georgian holding
company JSC Georgia Capital are presented as one line item. As we conduct
almost all of our operations through JSC Georgia Capital, through which we
hold all of our portfolio companies, the IFRS results provide little
transparency on the underlying trends.
Accordingly, to enable a more granular analysis of those trends, the following
adjusted income statement presents the Group's results of operations for the
period ending December 31 as an aggregation of (i) the results of GCAP (the
two holding companies Georgia Capital PLC and JSC Georgia Capital, taken
together) and (ii) the fair value change in the value of portfolio companies
during the reporting period. For details on the methodology underlying the
preparation of the adjusted income statement, please refer to page 94 in
Georgia Capital PLC's 2023 Annual report.
INCOME STATEMENT (Adjusted IFRS/APM)
GEL '000, unless otherwise noted (unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Dividend income 9,826 34,148 -71.2% 201,752 235,883 -14.5%
Of which, regular dividend income 9,826 34,148 -71.2% 129,201 162,527 -20.5%
Of which, buyback dividend income - - NMF 72,551 73,356 -1.1%
Interest income 2,076 2,345 -11.5% 7,477 16,642 -55.1%
Realised/unrealised gain/(loss) on liquid funds/ Loss on GCAP Eurobond 6 772 -99.2% (796) (1,574) -49.4%
buybacks
Interest expense (9,101) (9,026) 0.8% (35,589) (47,808) -25.6%
Gross operating income 2,807 28,239 -90.1% 172,844 203,143 -14.9%
Operating expenses (8,345) (8,807) -5.2% (35,280) (36,779) -4.1%
GCAP net operating (loss)/income (5,538) 19,432 NMF 137,564 166,364 -17.3%
Fair value changes of portfolio companies
Listed and Observable Portfolio Companies 302,564 133,638 NMF 224,188 399,384 -43.9%
Of which, Lion Finance Group PLC 274,564 133,638 NMF 195,188 395,384 -50.6%
Of which, Water Utility 28,000 - NMF 29,000 4,000 NMF
Private Portfolio companies 148,459 55,346 NMF 9,382 45,248 -79.3%
Large Portfolio Companies 125,123 34,707 NMF (5,171) (2,039) NMF
Of which, Retail (pharmacy) 57,596 34,397 67.4% 691 (11,507) NMF
Of which, Insurance (P&C and Medical) 20,468 35,899 -43.0% 49,257 97,012 -49.2%
Of which, Hospitals 47,059 (35,589) NMF (55,119) (87,544) -37.0%
Investment Stage Portfolio Companies 24,314 34,017 -28.5% (22,759) 41,857 NMF
Of which, Renewable energy 5,942 5,179 14.7% (26,028) 33,497 NMF
Of which, Education (183) 16,584 NMF (8,853) 12,282 NMF
Of which, Clinics and Diagnostics 18,555 12,254 51.4% 12,122 (3,922) NMF
Other businesses (978) (13,378) -92.7% 37,312 5,430 NMF
Total investment return 451,023 188,984 NMF 233,570 444,632 -47.5%
Income before foreign exchange movements and non-recurring expenses 445,485 208,416 NMF 371,134 610,996 -39.3%
Net foreign currency (loss)/gain/impairment (9,417) 28 NMF (18,662) 6,491 NMF
Non-recurring expenses (480) (139) NMF (2,148) (1,898) 13.2%
Net income 435,588 208,305 NMF 350,324 615,589 -43.1%
The gross operating income for 4Q24 was down 90.1% y-o-y (a 14.9% decrease in
FY24), mainly due to lower dividend income. This was driven by a timing
discrepancy in recognising Lion Finance Group's interim dividend, which was
recorded in the third quarter of 2024 compared to the fourth quarter in 2023.
The components of GCAP's operating expenses are shown in the table below.
GCAP Operating Expenses Components
GEL '000, unless otherwise noted (unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Administrative expenses(( 21 )) (2,610) (2,858) -8.7% (10,586) (10,909) -3.0%
Management expenses - cash-based(( 22 )) (2,328) (2,602) -10.5% (10,794) (10,877) -0.8%
Management expenses - share-based(( 23 )) (3,407) (3,347) 1.8% (13,900) (14,993) -7.3%
Total operating expenses (8,345) (8,807) -5.2% (35,280) (36,779) -4.1%
Of which, fund type expense(( 24 )) (2,490) (2,660) -6.4% (9,258) (9,667) -4.2%
Of which, management fee type expenses(( 25 )) (5,855) (6,147) -4.8% (26,022) (27,112) -4.0%
GCAP management fee expenses starting from 2024 have a self-targeted cap of
0.75% of Georgia Capital's NAV. The LTM management fee expense ratio was 0.72%
at 31-Dec-24 (0.80% as of 31-Dec-23).
Total investment return represents the increase (decrease) in the fair value
of our portfolio. Total investment return was GEL 451.0 million in 4Q24 and
GEL 233.6 million in FY24, reflecting the changes in the value of our
portfolio companies. We discuss valuation drivers for our businesses on pages
5-7. The performance of each of our private large and investment stage
portfolio companies is discussed on pages 12-20.
GCAP's net foreign currency liability balance amounted to US$ 60 million (GEL
170 million) at 31-Dec-24. As a result of the movements described above,
GCAP's adjusted IFRS net income was GEL 435.6 million in 4Q24 (net income of
GEL 350.3 million in FY24).
DISCUSSION OF PORTFOLIO COMPANIES' RESULTS (STAND-ALONE IFRS)
The following sections present the IFRS results and business development
extracted from the individual portfolio company's IFRS accounts for large and
investment stage entities, where the 2024 portfolio company's accounts and
respective IFRS numbers are unaudited. We present key IFRS financial
highlights, operating metrics and ratios along with commentary explaining the
developments behind the numbers. For the majority of our portfolio companies,
the fair value of our equity investment is determined by the application of an
income approach (DCF) and a market approach (listed peer multiples and
precedent transactions). Under the discounted cash flow (DCF) valuation
method, fair value is estimated by deriving the present value of the business
using reasonable assumptions of expected future cash flows and the terminal
value, and the appropriate risk-adjusted discount rate that quantifies the
risk inherent to the business. Under the market approach, listed peer group
earnings multiples are applied to the trailing twelve months (LTM) stand-alone
IFRS earnings of the relevant business. As such, the stand-alone IFRS results
and developments driving the IFRS earnings of our portfolio companies are key
drivers of their valuations within GCAP's financial statements. See "Basis of
Presentation" on page 30 for more background.
Discussion of Retail (Pharmacy) Business Results
The retail (pharmacy) business, where GCAP owns a 97.8% equity interest, is
the largest pharmaceuticals retailer and wholesaler in Georgia, with a 35.8%
market share in the organised retail market based on 2023 revenues. The
business consists of a retail pharmacy chain operating under two brands (GPC
and Pharma Depot) and a wholesale business that sells pharmaceuticals and
medical supplies to hospitals and other pharmacies. The business operates a
total of 410 pharmacies (of which 395 are in Georgia and 15 in Armenia) and 19
franchise stores (of which, 12 are in Georgia, 2 in Armenia and 5 in
Azerbaijan).
4Q24 and FY24 performance (GEL '000), Retail (pharmacy) 26
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue, net 232,532 220,715 5.4% 850,115 815,020 4.3%
Of which, retail 182,304 175,526 3.9% 681,213 646,402 5.4%
Of which, wholesale 50,228 45,189 11.2% 168,902 168,618 0.2%
Gross Profit 73,019 59,952 21.8% 261,266 233,796 11.7%
Gross profit margin 31.4% 27.2% 4.2 ppts 30.7% 28.7% 2.0 ppts
Operating expenses (ex. IFRS 16) (48,494) (43,934) 10.4% (180,339) (156,453) 15.3%
EBITDA (ex. IFRS 16) 24,525 16,018 53.1% 80,927 77,343 4.6%
EBITDA margin, (ex. IFRS 16) 10.5% 7.3% 3.2 ppts 9.5% 9.5% NMF
Net profit/(loss) (ex. IFRS 16) 13,613 (102) NMF 38,282 45,614 -16.1%
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16) 21,541 34,209 -37.0% 78,249 52,361 49.4%
EBITDA to cash conversion 87.8% 213.6% NMF 96.7% 67.7% 29.0 ppts
Cash flow used in investing activities 27 (14,589) (11,335) 28.7% (41,278) (84,130) -50.9%
Free cash flow, (ex. IFRS 16) 28 13,528 20,646 -34.5% 54,751 (56,130) NMF
Cash flow (used in)/from financing activities (ex. IFRS 16) (23,978) 3,126 NMF (77,722) 17,686 NMF
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 608,576 622,763 -2.3% 660,243 -7.8%
Of which, cash and bank deposits 19,154 36,380 -47.4% 60,383 -68.3%
Of which, securities and loans issued 19,087 15,585 22.5% 2,623 NMF
Total liabilities 521,341 544,948 -4.3% 597,611 -12.8%
Of which, borrowings 181,833 204,440 -11.1% 228,261 -20.3%
Of which, lease liabilities 149,348 149,409 NMF 151,916 -1.7%
Total equity 87,235 77,815 12.1% 62,632 39.3%
INCOME STATEMENT HIGHLIGHTS
Ø The developments in 4Q24 and FY24 total revenue of Retail (Pharmacy)
reflect the combination of the following factors:
o A 3.9% y-o-y increase in retail revenue in 4Q24 (up 5.4% y-o-y in FY24),
driven by a substantial ramp-up in the performance of pharmacy stores launched
in late 2023 and the business' continued efforts to enhance sales and
profitability of para-pharmacy products. The revenue from para-pharmacy, as a
percentage of retail revenue, was 38.5% in 4Q24 (38.1% in FY24).
o An 11.2% y-o-y increase in wholesale revenue (up 0.2% y-o-y in FY24),
driven by higher revenue from healthcare programmes.
o The total revenue growth was dampened by price regulations, which set a
maximum selling price for both prescription and non-prescription medicines.
The negative impact of these regulations on the total revenue growth amounted
to GEL 3.0 million in 4Q24 (GEL 14.5 million in FY24).
Ø The business' initiative to renegotiate trading terms with key suppliers
across major product categories positively impacted gross profit margins in
4Q24 and FY24. This was particularly evident in the para-pharmacy retail
segment, which saw y-o-y improvements of 6.2 ppts in 4Q24 and 6.4 ppts in
FY24.
Ø The y-o-y increase in operating expenses (excl. IFRS 16) in 4Q24 and FY24
was driven by higher rent and salary costs, reflecting the significant
expansion of the retail chain and the opening of the new warehouse at the end
of 2023. The increase in salary expenses (up 14.4% and 13.9% y-o-y in 4Q24 and
FY24, respectively) further reflects higher staff compensation aligned with
market trends and the implementation of new incentive schemes aimed at
improving the gross profit margin.
Ø As a result, the business achieved y-o-y EBITDA (excl. IFRS 16) growth of
53.1% in 4Q24 (up by 4.6% y-o-y in FY24).
Ø Net interest expense (excl. IFRS 16) was down by 32.0% y-o-y to GEL 4.4
million in 4Q24 and up by 48.6% y-o-y to GEL 20.1 million in FY24, the latter
attributable to the higher average net debt balance, utilised to finance the
minority shareholder buyout transaction in June 2023.
Ø The developments described above translated into a GEL 13.7 million y-o-y
increase in net profit (excl. IFRS 16) in 4Q24 (down 16.1% y-o-y in FY24).
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø The net debt balance was down to GEL 143.6 million at 31-Dec-24, from GEL
152.5 million at 30-Sep-24, reflecting robust cash flow generation in 4Q24.
Ø Cash flow from operating activities was strong with 87.8% and 96.7% EBITDA
to cash conversion ratio in 4Q24 and FY24, respectively.
Ø The business paid GEL 10.0 million dividends to GCAP in FY24.
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø In 2024, the business divested from its textile franchise brands "Carters"
and "Triumph" with 6 operating stores in Georgia. The total consideration
(excl. VAT) amounted to GEL 3.7 million.
Ø The number of pharmacies and franchise stores is provided below:
(Unaudited) Dec-24 Sep-24 Change (q-o-q) Dec-23 Change (y-o-y)
Number of pharmacies 410 415 (5) 412 (2)
Of which, Georgia 395 399 (4) 397 (2)
Of which, Armenia 15 16 (1) 15 -
Number of franchise stores 19 19 - 23 (4)
Of which, Georgia 12 12 - 17 (5)
Of which, Armenia 2 2 - 2 -
Of which, Azerbaijan 5 5 - 4 1
Ø Retail (Pharmacy)'s key operating performance highlights for 4Q24 and FY24
are noted below:
Key metrics (unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Same store revenue growth 0.0% -2.2% 2.2 ppts -1.7% -0.1% -1.6 ppts
Number of bills issued (mln) 8.0 8.2 -2.6% 31.6 31.3 0.9%
Average bill size (GEL) 21.5 20.3 5.7% 20.4 19.6 4.1%
Discussion of Insurance (P&C and Medical) Business Results
As at 31-Dec-24, the insurance business comprises a) Property and Casualty
(P&C) insurance business, operating under the brand name "Aldagi" and b)
medical insurance business, operating under "Imedi L" and "Ardi" brands, the
latter acquired in April 2024. The P&C insurance business is a leading
player with a 30% market share in property and casualty insurance based on
gross premiums as of 30-Sep-24. P&C also offers a variety of non-property
and casualty products, such as life insurance. The medical insurance business
is the country's largest private health insurer, with a 35% market share based
on gross insurance premiums as of 30-Sep-24, offering a variety of health
insurance products primarily to corporate and (selectively) to state entities
and also to retail clients in Georgia. GCAP owns a 100% equity stake in both
insurance businesses.
4Q24 and FY24 performance (GEL'000), Insurance (P&C and Medical) 29
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Insurance revenue 96,235 56,005 71.8% 316,483 208,242 52.0%
Of which, P&C Insurance 40,091 31,238 28.3% 149,021 116,911 27.5%
Of which, Medical Insurance 56,144 24,767 NMF 167,462 91,331 83.4%
Net underwriting profit 22,033 16,310 35.1% 79,823 53,828 48.3%
Net investment profit 4,965 3,878 28.0% 16,178 14,272 13.4%
Pre-tax profit 10,677 8,886 20.2% 42,895 30,393 41.1%
Of which, P&C Insurance 7,209 6,324 14.0% 28,952 21,982 31.7%
Of which, Medical Insurance 3,468 2,562 35.4% 13,943 8,411 65.8%
CASH FLOW HIGHLIGHTS
Net cash flows from operating activities 26,351 2,091 NMF 69,140 33,687 NMF
Free cash flow 23,990 1,074 NMF 64,917 29,358 NMF
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 300,510 334,416 -10.1% 248,902 20.7%
Total equity 128,614 124,474 3.3% 130,684 -1.6%
INCOME STATEMENT HIGHLIGHTS
Ø The y-o-y increase in 4Q24 and FY24 insurance revenue reflects a
combination of factors:
§ The revenue of the P&C insurance business was up by 28.3% y-o-y in 4Q24
(up 27.5% y-o-y in FY24), resulting from:
o A GEL 4.8 million y-o-y increase in Motor Insurance revenues in 4Q24 (a
GEL 19.5 million y-o-y increase in FY24), mainly attributable to the expansion
of both retail and corporate client portfolios.
o A GEL 1.9 million y-o-y increase in Agricultural Insurance revenues in
4Q24 (a GEL 4.0 million y-o-y increase in FY24), driven by a growing client
base as well as increased tariffs on certain crops and regions.
o A GEL 1.6 million y-o-y increase in Credit Life Insurance revenues in 4Q24
(a GEL 5.7 million y-o-y increase in FY24), resulting from the growth of
partner banks' portfolios in the mortgage, consumer loan and other sectors.
o A GEL 0.6 million y-o-y increase in the revenues from other insurance
lines in 4Q24 (a GEL 2.9 million y-o-y increase in FY24).
§ The revenue of the medical insurance business more than doubled y-o-y in
4Q24 (up 83.4% y-o-y in FY24), reflecting organic growth of the portfolio,
c.10% increase in insurance policy prices and the positive impact of the
acquisition of Ardi insurance portfolio in April 2024, the latter contributing
GEL 24.1 million to the 4Q24 y-o-y revenue growth (GEL 59.6 million in FY24).
Ø The insurance business' key performance ratios for 4Q24 and FY24 are noted
below:
Key ratios P&C Insurance Medical Insurance
(Unaudited) 4Q24 4Q23 Change FY24 FY23 Change 4Q24 4Q23 Change FY24 FY23 Change
Combined ratio 89.9% 89.0% 0.9 ppts 87.5% 89.5% -2.0 ppts 94.4% 92.6% 1.8 ppts 93.1% 94.8% -1.7 ppts
Expense ratio 35.1% 38.5% -3.4 ppts 34.1% 35.8% -1.7 ppts 16.7% 18.7% -2.0 ppts 16.8% 16.6% 0.2 ppts
Loss ratio 54.7% 49.8% 4.9 ppts 53.3% 53.8% -0.5 ppts 77.7% 73.9% 3.8 ppts 76.3% 78.2% -1.9 ppts
FX ratio 0.1% 0.7% -0.6 ppts 0.1% -0.1% 0.2 ppts - - - - - -
ROAE 30 30.8% 28.8% 2.0 ppts 33.2% 24.4% 8.8 ppts 44.0% 23.5% 20.5 ppts 35.6% 17.1% 18.5 ppts
Ø The combined ratio of P&C Insurance increased by 0.9 ppt y-o-y to 89.9%
in 4Q24 reflecting the net impact of: a) a 4.9 ppts y-o-y increase in the loss
ratio, mainly due to higher motor insurance claims in the corporate client
segment, with ongoing price segmentation initiatives expected to drive
improvements in the coming quarters, and b) a 3.4 ppts y-o-y improvement in
expense ratio in 4Q24. The combined ratio of P&C Insurance improved by 2.0
ppts y-o-y to 87.5% in FY24, mainly resulting from the improved expense ratio
on the back of strong revenue growth.
Ø The combined ratio of Medical Insurance increased by 1.8 ppts y-o-y to
94.4% in 4Q24, primarily driven by a higher loss ratio due to the increased
flu activity in 4Q24 compared to 4Q23. A 1.7 ppts y-o-y improvement in the
FY24 combined ratio reflects consolidation of Ardi's portfolio and increased
revenues, due to higher insurance tariffs, as described above.
Ø The net investment profit was up by 28.0% y-o-y in 4Q24 (up 13.4% y-o-y in
FY24), attributable to the higher average liquid funds balance as well as
the consolidation of Ardi's insurance portfolio.
Ø As a result, the pre-tax profit of the insurance business was up by 20.2%
y-o-y in 4Q24 (up 41.1% y-o-y in FY24). The acquisition of Ardi Insurance
contributed GEL 1.4 million to the 4Q24 y-o-y pre-tax profit growth (GEL 5.6
million in FY24).
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø The solvency ratio of P&C and medical insurance businesses stood at
173% and 157%, respectively, as of 31 December 2024, significantly above the
required minimum of 100%.
Ø A y-o-y increase in the net cash flows from operating activities is mainly
driven by higher underwriting cash flows of the business as compared to 2023
coupled with the positive impact of the consolidation of Ardi's portfolio.
Ø GEL 8.8 million dividends were paid to GCAP in 4Q24 (GEL 25.4 million in
FY24).
Discussion of Hospitals Business Results 31
The hospitals business, where GCAP owns 100% equity, is the largest healthcare
market participant in Georgia, comprised of 7 Large and Specialty Hospitals,
providing secondary and tertiary level healthcare services across Georgia and
27 Regional and Community Hospitals, providing outpatient and basic inpatient
services.
4Q24 and FY24 performance (GEL '000), Hospitals 32
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue, net 33 90,210 77,638 16.2% 332,710 313,748 6.0%
Gross Profit 32,889 23,046 42.7% 114,627 104,616 9.6%
Gross profit margin 35.8% 28.9% 6.9 ppts 33.9% 32.8% 1.1 ppts
Operating expenses (ex. IFRS 16) (15,507) (15,138) 2.4% (59,461) (58,487) 1.7%
EBITDA (ex. IFRS 16) 17,382 7,908 NMF 55,166 46,129 19.6%
EBITDA margin (ex. IFRS 16) 18.9% 9.9% 9.0 ppts 16.3% 14.5% 1.8 ppts
Net loss (ex. IFRS 16) (355) (27,322) -98.7% (13,132) (36,615) -64.1%
CASH FLOW HIGHLIGHTS
Cash flow from/(used in) operating activities (ex. IFRS 16) 25,778 (3,697) NMF 48,828 10,621 NMF
EBITDA to cash conversion (ex. IFRS 16) 148.3% -46.8% NMF 88.5% 23.0% 65.5 ppts
Cash flow used in investing activities 34 (14,656) (13,031) 12.5% (25,166) (44,746) -43.8%
Free cash flow (ex. IFRS 16) 35 10,932 (17,226) NMF 25,462 (35,069) NMF
Cash flow from financing activities (ex. IFRS 16) 11,067 26,066 -57.5% (5,307) 22,362 NMF
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 705,367 703,165 0.3% 707,614 -0.3%
Of which, cash balance and bank deposits 27,600 5,454 NMF 9,753 NMF
Of which, securities and loans issued 5,995 7,827 -23.4% 9,557 -37.3%
Total liabilities 366,432 365,800 0.2% 357,658 2.5%
Of which, borrowings 296,770 278,495 6.6% 281,352 5.5%
Total equity 338,935 337,365 0.5% 349,956 -3.1%
INCOME STATEMENT HIGHLIGHTS
Ø The Large and Specialty Hospitals and Regional and Community Hospitals
represent approximately 70% and 30%, respectively, of the consolidated
hospitals' business revenue.
Total revenue breakdown (unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Total revenue, net 90,210 77,638 16.2% 332,710 313,748 6.0%
Of which, Large and Specialty Hospitals 61,965 51,991 19.2% 226,648 204,690 10.7%
Of which, Regional and Community Hospitals 28,474 25,966 9.7% 106,962 110,551 -3.2%
Of which, Inter-business eliminations (229) (319) -28.2% (900) (1,493) -39.7%
Ø The total revenue growth in 4Q24 and FY24 was primarily driven by the
rebound to normal operational levels following mandatory regulatory
renovations across all our hospitals, most of which occurred between the
second half of 2023 and the first half of 2024. These renovations led to the
phased closure of certain sections of our healthcare facilities, resulting in
reduced patient intake during that period. As of 31 December 2024, all 34
hospitals have completed the required renovations and fully meet regulatory
requirements.
o The performance of the Large and Specialty Hospitals in 4Q24 and FY24
further reflects the positive outcome of the business' efforts to expand its
range of high-margin outpatient services. In 4Q24, these services accounted
for 35.4% of the revenue of Large and Specialty Hospitals, marking a 3.7 ppts
y-o-y increase (34.2% in FY24, up 3.0 ppts y-o-y).
o The completion of the renovation works was also evident in the performance
of our Regional and Community Hospitals, which saw revenue growth of 9.7%
y-o-y in 4Q24 (down 3.2% y-o-y in FY24), notwithstanding the absence of the
revenues from "Batumi Hospital", one of the regional hospitals divested in
4Q23.
Ø As a result, the combined revenue of the hospitals business was up by 16.2%
and 6.0% y-o-y in 4Q24 and FY24, respectively. Adjusted for the sale of the
above-mentioned "Batumi Hospital", the combined revenue was up by 22.8% y-o-y
in 4Q24 (up 11.9% in FY24).
Ø The changes in the gross profit margin, apart from the revenue developments
described above, reflect the following trends in direct salary and materials
rates(( 36 )) and utility costs:
o Approximately 50% of direct salaries are fixed. This, coupled with
significantly increased revenue, led to a 2.7 ppts improvement in the direct
salary rate to 39.7% in 4Q24, offsetting the impact of minimum salary
requirements introduced by the State in January 2024. However, this regulation
had a more meaningful effect on a full-year basis, leading to a 0.8 ppts y-o-y
increase in the direct salary rate to 40.4% in FY24.
o The materials rate improved by 2.7 ppts y-o-y to 15.4% in 4Q24 (down 0.9
ppts y-o-y to 16.3% in FY24), reflecting significant optimisations achieved in
tender participation processes and overall improvement in inventory management
across the hospitals network.
o Utilities and other costs were up by 2.3% y-o-y in 4Q24, reflecting the
rebound to normal operational levels, as described above. These costs were
down by 9.5% y-o-y in FY24.
Ø Operating expenses (excl. IFRS 16) increased modestly, up by 2.4% and 1.7%
y-o-y in 4Q24 and FY24, respectively, mainly due to higher salary costs
associated with an increased headcount to support the expansion of the
services and the development of the Regional and Community hospitals'
head-office following the strategic reorganisation in late 2023.
Ø Consequently, EBITDA (excluding IFRS 16) was up by 119.8% y-o-y in 4Q24 (up
19.6% y-o-y in FY24).
(Unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Total EBITDA (excl. IFRS 16), breakdown 17,382 7,908 NMF 55,166 46,129 19.6%
Of which, Large and Specialty Hospitals 12,674 6,585 92.5% 41,580 34,339 21.1%
Of which, Regional and Community Hospitals 4,709 1,319 NMF 13,586 11,791 15.2%
Ø Adjusted for the sale of the "Batumi Hospital", the combined EBITDA
(excluding IFRS 16) was up by 131.5% y-o-y in 4Q24 (up 25.1% in FY24).
Ø Net interest expense (excluding IFRS 16) was up by 6.9% y-o-y in 4Q24, due
to increased borrowings to finance the capex investments, as outlined below.
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø Capex investment was GEL 14.8 million in 4Q24 (GEL 53.0 million in FY24),
comprising: a) development capex of GEL 7.0 million in 4Q24 (GEL 14.8 million
in FY24) to expand service offerings and upgrade medical equipment, b) capex
related to the new regulations and obtaining required accreditations in the
amount of GEL 2.2 million in 4Q24 (GEL 10.2 million in FY24), and c) the
maintenance capex of GEL 5.0 million in 4Q24 (GEL 26.0 million in FY24).
Ø The EBITDA to cash conversion ratio was at 148.3% in 4Q24 (88.5% in FY24),
reflecting the receipt of the delayed receivables from the State.
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø The business key operating performance highlights for 4Q24 and FY24 are
noted below:
Key metrics (unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Number of admissions (thousands): 388.2 388.3 0.0% 1,568.4 1,527.2 2.7%
Of which, Large and Specialty Hospitals 192.4 165.5 16.3% 729.0 599.9 21.5%
Of which, Regional and Community Hospitals 37 195.8 222.8 -12.1% 839.4 927.3 -9.5%
Occupancy rates:
Of which, Large and Specialty Hospitals 68.3% 54.6% 13.7 ppts 66.5% 53.5% 13.0 ppts
Of which, Regional and Community Hospitals 58.0% 45.9% 12.1 ppts 58.1% 44.3% 13.8 ppts
Ø The decrease in admissions at Regional and Community Hospitals reflects a
favourable shift in the revenue mix, which resulted in a significant
improvement at the EBITDA level, as outlined above.
Discussion of Renewable Energy Business Results
The renewable energy business operates three wholly-owned commissioned
renewable assets: 30MW Mestiachala HPP, 20MW Hydrolea HPPs and 21MW Qartli
wind farm. In addition, the business has a pipeline of renewable energy
projects in varying stages of development. The renewable energy business is
100% owned by Georgia Capital. As electricity sales in Georgia is a dollar
business, the financial data below is presented in US$.
4Q24 and FY24 performance (US$ '000), Renewable Energy 38
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue 2,625 2,978 -11.9% 16,086 14,449 11.3%
Of which, PPA 39 1,750 2,431 -28.0% 7,562 8,529 -11.3%
Of which, Non-PPA 875 547 60.0% 8,524 5,920 44.0%
Operating expenses (937) (947) -1.1% (4,006) (4,068) -1.5%
EBITDA 1,688 2,031 -16.9% 12,080 10,381 16.4%
EBITDA margin 64.3% 68.2% -3.9 ppts 75.1% 71.8% 3.3 ppts
Net loss (4,167) (1,098) NMF (1,185) (666) -77.9%
CASH FLOW HIGHLIGHTS
Cash flow from operating activities 3,205 3,035 5.6% 12,320 9,877 24.7%
Cash flow used in investing activities (1,541) (398) NMF (3,570) (3,561) 0.3%
Cash flow used in financing activities (512) (2,581) -80.2% (13,094) (5,170) NMF
Repayment of borrowings (340) (4) NMF (7,440) (13) NMF
Dividends paid out - - NMF (4,500) (2,000) NMF
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 116,620 117,529 -0.8% 122,579 -4.9%
Of which, cash balance 5,880 4,872 20.7% 10,525 -44.1%
Total liabilities 79,123 78,560 0.7% 83,911 -5.7%
Of which, borrowings 73,644 75,382 -2.3% 80,935 -9.0%
Total equity 37,497 38,970 -3.8% 38,667 -3.0%
INCOME STATEMENT HIGHLIGHTS (GEL) 4Q24 4Q23 Change FY24 FY23 Change
Revenue 7,278 8,048 -9.6% 43,977 38,065 15.5%
EBITDA 4,675 5,488 -14.8% 33,001 27,357 20.6%
INCOME STATEMENT HIGHLIGHTS
Ø An 11.9% y-o-y decline in 4Q24 revenue was driven by an 11.1% y-o-y
decrease in electricity generation due to unfavourable weather conditions
during the quarter. The average electricity selling price remained largely
flat at 58.1 US$/MWh in 4Q24 (down 0.9% y-o-y)
Ø The FY24 revenue was up by 11.3% y-o-y, reflecting the resumption of
operations of two power-generating units of Hydrolea HPPs, which were taken
offline between November 2022 to June 2023 due to previously planned phased
rehabilitation works. The average electricity selling price stood at 57.0
US$/MWh in FY24 (up 0.3% y-o-y).
4Q24 and FY24 revenue and generation breakdown by power assets:
(Unaudited) 4Q24 FY24
US$ '000, Revenue from Change Electricity Change Revenue from Change Electricity Change
electricity sales
y-o-y
generation (MWh)
y-o-y
electricity sales
y-o-y
generation (MWh)
y-o-y
unless otherwise noted
30MW Mestiachala HPP 357 -25.6% 6,485 -25.7% 5,605 2.1% 100,885 1.2%
20MW Hydrolea HPPs 1,142 -5.9% 21,355 -4.3% 5,444 61.7% 103,655 51.7%
21MW Qartli wind farm 1,126 -12.3% 17,317 -12.4% 5,037 -9.9% 77,500 -9.9%
Total 2,625 -11.9% 45,157 -11.1% 16,086 11.3% 282,040 11.0%
Ø The operating expenses were well-controlled, down 1.1% and 1.5% y-o-y in
4Q24 and FY24, respectively.
Ø The developments described above, led to a 16.9% y-o-y decrease in EBITDA
in 4Q24 (up 16.4% y-o-y in FY24).
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø In 2024, the business repurchased and cancelled US$ 7.0 million of its
green bonds. As a result, the gross debt balance of the business currently
stands at US$ 73.0 million, leading to a 7.7% and 6.1% y-o-y decrease in the
net interest expense in 4Q24 and FY24, respectively.
Ø The business paid US$ 4.5 million dividends to GCAP in FY24.
Discussion of Education Business Results
Our education business currently combines majority stakes in four private
school brands operating across seven campuses acquired over the period
2019-2023: British-Georgian Academy and British International School of
Tbilisi (70% stake), the leading schools in the premium and international
segments; Buckswood International School (80% stake), well-positioned in the
midscale segment and Green School (80%-90% ownership), well-positioned in the
affordable segment.
4Q24 and FY24 performance (GEL '000), Education 40
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue 22,518 19,346 16.4% 68,174 55,491 22.9%
Operating expenses (14,744) (12,936) 14.0% (51,559) (41,053) 25.6%
EBITDA 7,774 6,410 21.3% 16,615 14,438 15.1%
EBITDA Margin 34.5% 33.1% 1.4 ppts 24.4% 26.0% -1.6 ppts
Net profit 6,066 8,223 -26.2% 12,708 13,263 -4.2%
CASH FLOW HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Net cash flows from/(used in) operating activities 630 (115) NMF 22,496 17,363 29.6%
Net cash flows used in investing activities (4,087) (3,504) 16.6% (22,367) (31,254) -28.4%
Net cash flows (used in)/from financing activities (79) 1,634 NMF 4,366 15,897 -72.5%
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 217,380 217,932 -0.3% 191,723 13.4%
Of which, cash 12,081 15,527 -22.2% 7,535 60.3%
Total liabilities 72,432 80,628 -10.2% 62,149 16.5%
Of which, borrowings 32,757 34,234 -4.3% 27,750 18.0%
Total equity 144,948 137,304 5.6% 129,574 11.9%
INCOME STATEMENT HIGHLIGHTS
Ø The 16.4% y-o-y increase in 4Q24 revenues (up 22.9% y-o-y in FY24) was
driven by a) organic growth through strong intakes and a ramp-up of the
utilisation and b) expansion of the business through the launch of a new
campus in the mid-scale segment and the acquisition of the new campus in the
affordable segment during 2023.
Ø Operating expenses were up by 14.0% y-o-y in 4Q24 (up 25.6% y-o-y in FY24),
mainly reflecting increased salary, catering and utility expenses, in line
with the expansion of the business.
Ø Consequently, EBITDA was up by 21.3% in 4Q24 (up 15.1% y-o-y in FY24).
Ø EBITDA margin was down by 1.6 ppts y-o-y in FY24, while it increased by 1.4
ppts y-o-y in 4Q24, indicating steady progress in the capacity utilisation of
the newly launched campuses.
Ø Net income was down 26.2% y-o-y in 4Q24 (down 4.2% y-o-y in FY24),
reflecting mainly the absence of a one-off gain recorded in 2023.
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø Cash collection rate for the 2024-2025 academic year was at 77.1% as of
31-Dec-24, in line with last year's level.
Ø Investing cash outflows of GEL 4.1 million and GEL 22.4 million in 4Q24 and
FY24, respectively, reflect the investments related to the expansion of the
existing campuses in the midscale and affordable segments.
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø In 2024, the total learner capacity increased by 825 learners to 8,095
learners, of which the capacity of the midscale segment expanded to 1,645
learners (up by 225 learners) and the capacity of the affordable segment
increased to 5,300 learners (up by 600 learners).
Ø The total number of learners increased by 722 learners y-o-y to 6,549
learners at 31-Dec-24.
Ø The utilisation rate for the total 8,095 learner capacity was up by 0.7
ppts y-o-y to 80.9% as at 31-Dec-24.
o The utilisation rate for the pre-expansion 2,810 learner capacity was
100%.
o The utilisation of the newly added capacity of 5,285 learners was 70.7%.
Ø The number of campuses across the different segments is noted below:
(Unaudited) Dec-24 Sep-24 Change (q-o-q) Dec-23 Change (y-o-y)
Total number of campuses 7 7 - 7 -
Premium and International segment 1 1 - 1 -
Mid-scale segment 2 2 - 2 -
Affordable segment 4 4 - 4 -
Discussion of Clinics and Diagnostics Business Results 41
The clinics and diagnostics business, where GCAP owns a 100% equity interest,
is the second largest healthcare market participant in Georgia after our
hospitals business. The business comprises two segments: 1) 16 polyclinics
(providing outpatient diagnostic and treatment services) and 14 lab retail
points at GPC pharmacies; 2) Diagnostics, operating the largest laboratory in
the entire Caucasus region - "Mega Lab".
4Q24 and FY24 performance (GEL '000), Clinics and Diagnostics 42
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue, net 43 20,959 17,047 22.9% 74,517 61,723 20.7%
Of which, clinics 16,496 13,717 20.3% 59,762 49,170 21.5%
Of which, diagnostics 6,319 4,950 27.7% 22,181 18,435 20.3%
Of which, inter-business eliminations (1,856) (1,620) 14.6% (7,426) (5,882) 26.2%
Gross Profit 10,785 8,350 29.2% 37,832 29,240 29.4%
Gross profit margin 51.3% 48.9% 2.4 ppts 50.7% 47.2% 3.5 ppts
Operating expenses (ex. IFRS 16) (6,519) (5,429) 20.1% (23,661) (19,245) 22.9%
EBITDA (ex. IFRS 16) 4,266 2,921 46.0% 14,171 9,995 41.8%
EBITDA margin (ex. IFRS 16) 20.3% 17.1% 3.2 ppts 19.0% 16.1% 2.9 ppts
Net profit/(loss) (ex. IFRS 16) 1,886 1,008 87.1% 3,513 (593) NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16) 6,190 2,274 NMF 17,381 6,901 NMF
EBITDA to cash conversion (ex. IFRS 16) 145.1% 77.9% 67.2 ppts 122.7% 69.0% 53.7 ppts
Cash flow (used in)/from investing activities (4,460) 8,951 NMF (9,820) (1,451) NMF
Free cash flow (ex. IFRS 16) 44 4,019 14,780 -72.8% 7,719 10,508 -26.5%
Cash flow used in financing activities (ex. IFRS 16) (5,884) (9,960) -40.9% (7,786) (5,982) 30.2%
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 135,999 140,638 -3.3% 135,848 0.1%
Of which, cash balance and bank deposits 4,294 8,459 -49.2% 4,500 -4.6%
Of which, securities and loans issued 2,000 - NMF 8,357 -76.1%
Total liabilities 82,450 86,338 -4.5% 83,901 -1.7%
Of which, borrowings 38,416 43,871 -12.4% 48,630 -21.0%
Total equity 53,549 54,300 -1.4% 51,947 3.1%
Discussion of results, Clinics (GEL '000)
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue, net 16,496 13,717 20.3% 59,762 49,170 21.5%
Gross Profit 8,566 6,985 22.6% 30,550 24,550 24.4%
Gross profit margin 51.9% 50.8% 1.1 ppts 51.0% 49.7% 1.3 ppts
Operating expenses (ex. IFRS 16) (5,533) (4,420) 25.2% (19,571) (15,745) 24.3%
EBITDA (ex. IFRS 16) 3,033 2,565 18.2% 10,979 8,805 24.7%
EBITDA margin (ex. IFRS 16) 18.4% 18.7% -0.3 ppts 18.3% 17.8% 0.5 ppts
Net profit (ex. IFRS 16) 1,140 1,113 2.4% 2,165 127 NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16) 5,783 2,042 NMF 17,178 8,214 109.1%
EBITDA to cash conversion (ex. IFRS 16) 190.7% 79.6% 111.1 ppts 156.5% 93.3% 63.2 ppts
Cash flow (used in)/from investing activities 45 (5,679) 9,255 NMF (10,682) (194) NMF
Free cash flow (ex. IFRS 16) 3,820 14,855 -74.3% 8,081 13,094 -38.3%
Cash flow used in financing activities (ex. IFRS 16) (4,439) (10,260) -56.7% (6,683) (7,649) -12.6%
BALANCE SHEET HIGHLIGHTS 31-Dec-24 30-Sep-24 Change 31-Dec-23 Change
Total assets 105,290 109,427 -3.8% 105,789 -0.5%
Of which, cash balance and bank deposits 4,094 8,438 -51.5% 4,261 -3.9%
Of which, securities and loans issued 3,465 - NMF 8,357 -58.5%
Total liabilities 71,033 73,686 -3.6% 71,840 -1.1%
Of which, borrowings 32,495 36,674 -11.4% 42,340 -23.3%
Total equity 34,257 35,741 -4.2% 33,949 0.9%
INCOME STATEMENT HIGHLIGHTS
Ø The 20.3% y-o-y increase in 4Q24 revenue (up 21.5% y-o-y in FY24) reflects:
o The increased demand for high revenue-generating services as well as the
growth in the number of registered patients, driven by the business' proactive
approach to customer acquisition and service enhancements.
o Ramp-up of two new ambulatory centres launched in 2023
o The acquisition of a portfolio of c.27,000 new customers in June 2024,
further contributing to the overall top-line growth in 4Q24 and FY24.
Ø The gross profit margin improved by 1.1 ppts y-o-y in 4Q24 (1.3 ppts y-o-y
improvement in FY24), reflecting strong revenue growth, while a significant
portion of costs remained fixed.
Ø Operating expenses (excl. IFRS 16) were up by 25.2% in 4Q24 and 24.3% y-o-y
in FY24, reflecting increased salary and rent expenses in line with the
expansion of the business, as well as the sale of one of the polyclinic
buildings in 3Q23 and its leaseback in 2Q24.
Ø The developments described above translated into an 18.2% y-o-y increase in
EBITDA in 4Q24 (up 24.7% y-o-y in FY24).
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø The EBITDA to cash conversion ratio was at 190.7% in 4Q24 (156.5% in FY24),
reflecting the strong business performance as well as the collection of
delayed receivables from the State.
Ø In 4Q24, the business spent GEL 2.4 million on capex, primarily related to
the expansion of services and the polyclinics chain. Capex investment in FY24
amounted to GEL 8.7 million.
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø The business key operating performance highlights are noted below:
(Unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Number of admissions (thousands) 472 435 8.7% 1,763 1,583 11.4%
Dec-24 Sep-24 Change Dec-23 Change
Number of polyclinics 46 16 16 - 16 -
Number of registered patients in polyclinics in Tbilisi c.340,000 c.337,000 0.9% c.301,000 12.8%
Discussion of results, Diagnostics (GEL '000)
(Unaudited)
INCOME STATEMENT HIGHLIGHTS 4Q24 4Q23 Change FY24 FY23 Change
Revenue, net 47 6,319 4,950 27.7% 22,181 18,435 20.3%
Gross Profit 2,219 1,365 62.6% 7,282 4,690 55.3%
Gross profit margin 34.9% 27.6% 7.3 ppts 32.8% 25.4% 7.4 ppts
Operating expenses (ex. IFRS 16) (986) (1,009) -2.3% (4,090) (3,500) 16.9%
EBITDA (ex. IFRS 16) 1,233 356 NMF 3,192 1,190 NMF
EBITDA margin (ex. IFRS 16) 19.4% 7.2% 12.2 ppts 14.4% 6.5% 7.9 ppts
Net profit/(loss) (ex. IFRS 16) 746 (105) NMF 1,348 (1,172) NMF
INCOME STATEMENT HIGHLIGHTS
Ø The revenue developments in 4Q24 and FY24 reflect the increased revenues
from both retail and business-to-business (B2B) clients, up 44.9% and 38.7%
y-o-y in 4Q24, respectively (up 27.4% and 11.0% in FY24, respectively). This
reflects the business' enhanced efforts on customer acquisition and service
diversification, particularly in the high-margin category.
Ø Materials and direct salary rates improved by 3.7 ppts and 4.3 ppts y-o-y
in 4Q24, respectively (3.6 ppts and 3.1 ppts y-o-y improvement in FY24,
respectively), which along with increased revenues, reflect significant
inventory management optimisations.
Ø As a result, the business recorded a 62.6% y-o-y increase in gross profit
and a 3.5x y-o-y increase in EBITDA in 4Q24 (up 55.3% and 2.7x y-o-y in FY24,
respectively).
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø The key operating performance highlights for 4Q24 and FY24 are presented
below:
(Unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Number of patients served (thousands) 215 201 6.8% 808 779 3.7%
Number of tests performed (thousands) 708 668 6.0% 2,712 2,481 9.3%
Average revenue per test GEL 9.0 7.4 21.1% 8.2 7.4 10.3%
Average number of tests per patient 3.3 3.3 - 3.4 3.2 5.4%
Discussion of Other Portfolio Results
The four businesses in our "other" private portfolio are Auto Service,
Beverages, Hospitality and Housing. They had a combined value of GEL 160.3
million at 31-Dec-24, which represents 4.3% of our total portfolio.
4Q24 & FY24 aggregated performance highlights (GEL '000), Other Portfolio
(Unaudited) 4Q24 4Q23 Change FY24 FY23 Change
Revenue 125,278 148,279 -15.5% 564,740 575,358 -1.8%
EBITDA 13,261 7,337 80.7% 65,751 42,785 53.7%
Net cash flows from operating activities (5,379) (7,076) 24.0% 28,153 (7,890) NMF
Ø Auto Service | The auto service business includes a periodic technical
inspection (PTI) business, and a car services and parts business.
o Periodic technical inspection (PTI) business | PTI business' revenue was
up by 0.8% y-o-y to GEL 5.7 million in 4Q24 (up by 12.3% y-o-y to GEL 23.4
million in FY24), resulting from a 1.1% y-o-y increase in the number of total
cars serviced (up 11.7% y-o-y in FY24). EBITDA was up by 9.4% and 18.8% y-o-y
in 4Q24 and FY24, respectively, reflecting enhancements in cost efficiency. In
4Q24, the business paid its first dividend to GCAP, since inception in 2018,
totalling GEL 1.0 million.
o Car services and parts business | In 4Q24, revenue was up by 10.1% y-o-y
to GEL 25.2 million (up 11.3% y-o-y to GEL 70.5 million in FY24) reflecting an
increase in the wholesale, retail and corporate segments. Similarly, the gross
profit was up by 19.6% to GEL 6.8 million in 4Q24 and up 12.8% to GEL 18.4
million in FY24, y-o-y. In 4Q24, operating expenses increased by 14.8% y-o-y
(up 19.5% y-o-y in FY24), reflecting the business growth. As a result, the
business posted a GEL 2.4 million EBITDA in 4Q24, up 29.2% y-o-y (GEL 4.0
million in FY24, down 6.1% y-o-y).
Ø Beverages | The beverages business combines beer and distribution and wine
business. At the end of 2024, GCAP sold 80% of its holding in its beer and
distribution business to Royal Swinkels, an international strategic investor,
for net cash proceeds of c.US$ 63 million. Completion of the transaction and
the receipt of full sales proceeds occurred on 23 December 2024. Net revenue
of the wine business remained largely flat, down 0.2% to GEL 14.9 million in
4Q24 (down by 2.5% y-o-y to GEL 56.7 million in FY24), reflecting higher loss
recorded from the revaluation of grapes in 4Q24 compared to 4Q23. Operating
expenses decreased by 9.8% y-o-y in 4Q24 (down by 7.7% y-o-y in FY24) due to
the business' cost-saving initiatives. Consequently, EBITDA was down by 63.8%
to GEL 0.5 million in 4Q24 (up by 15.0% to GEL 5.0 million in FY24).
Ø Real estate businesses | The combined EBITDA of the real estate businesses
increased by GEL 7.6 million y-o-y to GEL 3.9 million in 4Q24 (up by GEL 20.7
million to GEL 13.5 million in FY24), mainly resulting from the reassessment
of the construction progress for ongoing residential projects at our housing
development business and strong operating performance of the hospitality
business.
RECONCILIATION OF ADJUSTED INCOME STATEMENT TO IFRS INCOME STATEMENT
The table below reconciles the adjusted income statement to the IFRS income
statement. Adjustments to reconcile adjusted income statement with IFRS income
statement mainly relate to eliminations of income, expense and certain equity
movement items recognised at JSC Georgia Capital, which are subsumed within
gross investment income/(loss) in IFRS income statement of Georgia Capital
PLC.
4Q24, unaudited FY24, unaudited
GEL '000, unless otherwise noted Adjusted IFRS income statement Adjustment IFRS income statement Adjusted IFRS income statement Adjustment IFRS income statement
(Unaudited)
Dividend income 9,826 20,083 29,909 201,752 (76,643) 125,109
Interest income 2,076 (2,076) - 7,477 (7,477) -
Realised/unrealised gain/(loss) on liquid funds 6 (6) - (796) 796 -
Interest expense (9,101) 9,101 - (35,589) 35,589 -
Gross operating income 2,807 27,102 29,909 172,844 (47,735) 125,109
Operating expenses (administrative, salaries and other employee benefits) (8,345) 8,345 - (35,280) 35,280 -
GCAP net operating (loss)/income (5,538) 35,447 29,909 137,564 (12,455) 125,109
Total investment return/gain on investments at fair value 451,023 (39,363) 411,660 233,570 9,419 242,989
Administrative expenses, salaries and other employee benefits - (1,370) (1,370) - (5,749) (5,749)
Income before foreign exchange movements and non-recurring expenses 445,485 (5,286) 440,199 371,134 (8,785) 362,349
Net foreign currency (loss)/gain (9,417) 9,204 (213) (18,662) 18,699 37
Non-recurring expenses (480) 480 - (2,148) 2,148 -
Net losses from investments measured at FVPL - - - - (112) (112)
Net income 435,588 4,398 439,986 350,324 11,950 362,274
DETAILED FINANCIAL INFORMATION
IFRS STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
GEL '000, unless otherwise noted 2024, unaudited 2023, audited
Gains on investments at fair value 242,989 568,351
Dividend income 125,109 47,659
Gross investment profit 368,098 616,010
General and administrative expenses (3,958) (4,476)
Salaries and other employee benefits (1,791) (2,087)
Profit before foreign exchange and non-recurring items 362,349 609,447
Net foreign currency gain/(loss) 37 (955)
Net (losses)/gains from investment securities measured at FVPL (112) 125
Profit before income taxes 362,274 608,617
Income tax - -
Profit for the year 362,274 608,617
Other comprehensive income - -
Total comprehensive income for the year 362,274 608,617
Earnings per share (GEL):
- basic 9.7017 15.4102
- diluted 9.2987 14.9311
IFRS STATEMENT OF FINANCIAL POSITION OF GEORGIA CAPITAL PLC
GEL '000, unless otherwise noted 31 December 2024 Unaudited 31 December 2023 Audited
Assets
Cash and cash equivalents(( 48 )) 3,521 12,319
Investment in redeemable securities - 3,517
Prepayments 1,396 976
Equity investments at fair value 3,606,400 3,363,411
Total assets 3,611,317 3,380,223
Liabilities
Other liabilities 2,304 1,711
Total liabilities 2,304 1,711
Equity
Share capital 1,300 1,420
Additional paid-in capital and merger reserve 238,311 238,311
Treasury shares (2) (2)
Retained earnings 3,369,404 3,138,783
Total equity 3,609,013 3,378,512
Total liabilities and equity 3,611,317 3,380,223
IFRS STATEMENT OF CASH FLOWS OF GEORGIA CAPITAL PLC
GEL '000, unless otherwise noted 2024 2023
Unaudited Audited
Cash flows from operating activities
Salaries and other employee benefits paid (1,334) (1,546)
General, administrative and operating expenses paid (5,066) (4,685)
Net cash flows used in operating activities before income tax (6,400) (6,231)
Income tax paid - -
Net Cash flow used in operating activities (6,400) (6,231)
Cash flows from investing activities
Purchase of redeemable securities - (3,382)
Proceeds from redemption of redeemable securities 3,379 -
Dividends received 125,109 47,659
Cash flows from investing activities 128,488 44,277
Cash flows from financing activities
Other purchases of treasury shares (130,821) (47,834)
Acquisition of treasury shares under share-based payment plan (304) (203)
Net cash used in financing activities (131,125) (48,037)
Effect of exchange rates changes on cash and cash equivalents 239 (1,051)
Net decrease in cash and cash equivalents (8,798) (11,042)
Cash and cash equivalents, beginning of the year 12,319 23,361
Cash and cash equivalents, end of the year 3,521 12,319
IFRS STATEMENT OF CHANGES IN EQUITY OF GEORGIA CAPITAL PLC
Unaudited, GEL '000, unless otherwise noted Share capital Additional paid-in capital and merger reserve Treasury Retained earnings Total
shares
1 January 2024 1,420 238,311 (2) 3,138,783 3,378,512
Profit for the year - - - 362,274 362,274
Total comprehensive income for the year - - - 362,274 362,274
Increase in equity arising from share-based payments - - - 457 457
Cancellation of shares (120) - 120 - -
Purchase of treasury shares - - (120) (132,110) (132,230)
31 December 2024 1,300 238,311 (2) 3,369,404 3,609,013
SEGMENT INFORMATION - RECONCILIATION TO IFRS FINANCIAL STATEMENTS (2024)
Unaudited, GEL '000, Georgia Capital PLC Aggregation with JSC Georgia Capital Elimination of double effect on investments Aggregated Holding Company Reclassifications (#_ftn49) NAV
unless otherwise noted Statement
Cash and cash equivalents 3,521 167,801 - 171,322 (171,322) -
Amounts due from credit institutions - 98,844 - 98,844 (98,844) -
Marketable securities - 7,869 - 7,869 (7,869) -
Prepayments 1,396 - - 1,396 (1,396) -
Other assets, net - 5,017 - 5,017 (5,017) -
Equity investments at fair value 3,606,400 3,720,071 (3,564,981) 3,761,490 - 3,761,490
Total assets 3,611,317 3,999,602 (3,564,981) 4,045,938 (284,448) 3,761,490
Debt securities issued - 432,460 - 432,460 (432,460) -
Other liabilities 2,304 2,161 - 4,465 (4,465) -
Total liabilities 2,304 434,621 - 436,925 (436,925) -
Net Debt - - - - (154,425) (154,425)
of which, Cash and liquid funds - - - - 278,237 278,237
of which, Gross Debt - - - - (432,662) (432,662)
Net other assets/ (liabilities) - - - - 1,948 1,948
Total Equity/NAV 3,609,013 3,564,981 (3,564,981) 3,609,013 - 3,609,013
SELECTED EXPLANATORY NOTES TO THE IFRS FINANCIAL STATEMENTS OF GEORGIA CAPITAL
PLC (UNAUDITED).
Numbers are presented in GEL thousands, unless noted otherwise.
GOING CONCERN
The Board of Directors of Georgia Capital has made an assessment of the
Company's ability to continue as a going concern and is satisfied that it has
the resources to continue in business for a period of at least 12 months from
the date of approval of the financial statements, i.e. the period ending 31
March 2026. Furthermore, management is not aware of any material uncertainties
that may cast significant doubt upon the Company's ability to continue as a
going concern for the foreseeable future. Therefore, the financial statements
continue to be prepared on a going concern basis.
The Directors have made an assessment of the appropriateness of the going
concern basis of preparation and reviewed Georgia Capital's liquidity outlook
for the period ending 31 March 2026.
The main source of cash inflow for GCAP PLC is capital redemption and dividend
income from JSC GCAP, which holds the liquid assets to support the liquidity
needs of the Company as well. As at 31 December 2024, JSC GCAP holds cash in
the amount of GEL 167,801, amounts due from credit institutions in the amount
of GEL 98,844 and marketable debt securities in the amount of GEL 7,869.
Securities are considered to be highly liquid, as they are debt instruments
listed on international and local markets.
The liquidity needs of the Group during the Going Concern review period mainly
consist of the coupon payments on JSC GCAP sustainability-linked bonds and the
operating costs of running the holding companies and capital allocations to
its portfolio companies. The liquidity outlook also assumes dividend income
from the private portfolio companies (retail (pharmacy), healthcare, renewable
energy, insurance businesses and auto service) and Lion Finance Group PLC.
Capital allocations are assumed in relation to investment stage companies
(Renewable Energy and Education).
On August 3, 2023, JSC GCAP issued US$ 150 million sustainability-linked local
bonds in Georgia, with an 8.5% coupon rate, payable in August 2028. The
proceeds from the transaction, together with GCAP's existing liquid funds,
were fully used to redeem GCAP's US$ 300 million Eurobonds. Following these
transactions, GCAP's gross debt balance decreased from US$ 300 million to US$
150 million. The Directors remain confident that, given the strong liquidity
and the Group's track record of proven access to capital, GCAP will
successfully continue to service its existing bonds.
The Company has been increasingly assessing climate related risk and
opportunities that may be present to the Group. During the going concern
period no significant risk has been associated to the Group and portfolio
companies that would materially impact their ability to generate sufficient
cash and continue as a going concern.
Based on the considerations outlined above, management of Georgia Capital
concluded that the going concern basis of preparation remains appropriate for
these financial statements.
The Group performed stress testing for the assessment period, which involved
modelling the impact of a combination of severe and plausible risks. Based on
the results of the stress tests, the directors concluded that the Group
remains solvent with solid financial position and has sufficient cash and
liquid investment securities to withstand the distressed scenario.
FAIR VALUE MEASUREMENTS
VALUATION TECHNIQUES
The following is a description of the determination of fair value for
financial instruments which are recorded at fair value using valuation
techniques. These incorporate the Company's estimate of assumptions that a
market participant would make when valuing the instruments.
Assets for which fair value approximates carrying value
For financial assets and financial liabilities that are liquid or have a
short-term maturity (less than three months), it is assumed that the carrying
amounts approximate to their fair value. This assumption is also applied to
demand deposits, savings accounts without a specific maturity and variable
rate financial instruments.
Fixed rate financial instruments
The fair value of fixed rate financial assets and liabilities carried at
amortised cost are estimated by comparing market interest rates when they were
first recognised with current market rates offered for similar financial
instruments. The estimated fair value of fixed interest-bearing deposits is
based on discounted cash flows using prevailing money-market interest rates
for debts with similar credit risk and maturity.
Investment in subsidiaries
Equity investments at fair value include investments in subsidiaries at fair
value through profit or loss representing 100% interest of JSC Georgia Capital
and 92% in Georgian Beverages Holding Limited. Georgia Capital PLC holds an
investment in JSC Georgia Capital (an investment entity on its own), which
holds a portfolio of investments, both meet the definition of investment
entity and Georgia Capital PLC measures its investment in JSC Georgia Capital
at fair value through profit or loss. Investments in investment entity
subsidiaries and loans issued are accounted for as financial instruments at
fair value through profit and loss in accordance with IFRS 9. Debt securities
owned are measured at fair value. In the ordinary course of business, the net
asset value of investment entity subsidiaries is considered to be the most
appropriate to determine fair value. Starting from December 2024, Georgia
Capital PLC also holds an investment in Georgian Beverages Holding Limited
which is measured at fair value through profit or loss. Through this entity,
Georgia Capital PLC holds its minority interest in the beer and distribution
business. JSC Georgia Capital's net asset value as of 31 December 2024 and 31
December 2023 is determined as follows:
31 December 2024 31 December 2023
Assets
Cash and cash equivalents 167,801 51,138
Amounts due from credit institutions 98,844 8,678
Marketable securities 7,869 18,203
Investment in redeemable securities - 14,068
Equity investments at fair value 3,720,071 3,671,945
Of which listed and observable investments 1,609,035 1,384,847
Lion Finance Group 1,421,035 1,225,847
Water Utility 188,000 159,000
Of which private investments: 2,111,036 2,287,098
Large portfolio companies 1,434,749 1,436,231
Retail (Pharmacy) 716,130 714,001
P&C insurance 313,140 285,566
Medical insurance 114,805 92,308
Hospitals 290,674 344,356
Investment stage portfolio companies 557,392 566,614
Renewable energy 252,606 266,627
Education 181,584 189,226
Clinics and diagnostics 123,202 110,761
Other portfolio companies 118,895 284,253
Loans issued - 9,212
Other assets 5,017 5,060
Total assets 3,999,602 3,778,304
Liabilities
Debt securities issued 432,460 413,930
Other liabilities 2,161 963
Total liabilities 434,621 414,893
Net Asset Value 3,564,981 3,363,411
In measuring fair values of JSC Georgia Capital's investments, following
valuation methodology is applied:
Equity Investments in Listed and Observable Portfolio Companies
Equity instruments listed on an active market are valued at the price within
the bid/ask spread, that is most representative of fair value at the reporting
date, which usually represents the closing bid price. The instruments are
included within Level 1 of the hierarchy in JSC GCAP financial statements.
Listed and observable portfolio also includes instruments for which there is a
clear exit path from the business, e.g. through a put and/or call options at
pre-agreed multiples. In such cases, pre-agreed terms are used for valuing the
company.
Equity Investments in Private Portfolio Companies
Large portfolio companies - An independent third-party valuation firm is
engaged to assess fair value ranges of large private portfolio companies at
the reporting date starting from 31 December 2020. The independent valuation
company has extensive relevant industry and emerging markets experience.
Valuation is performed by applying several valuation methods including an
income approach based mainly on discounted cash flow and a market approach
based mainly on listed peer multiples (the DCF and listed peer multiples
approaches applied are described below for the other portfolio companies). The
different valuation approaches are weighted to derive a fair value range, with
the income approach being more heavily weighted than the market approach.
Management selects what is considered to be the most appropriate point in the
provided fair value range at the reporting date.
Investment stage portfolio companies - An independent third-party valuation
firm is engaged to assess fair value ranges of investment stage private
portfolio companies at the reporting date starting from 30 June 2022. The
independent valuation company has extensive relevant industry and emerging
markets experience. Valuation is performed by applying several valuation
methods including an income approach based mainly on discounted cash flow and
a market approach based mainly on listed peer multiples (the DCF and listed
peer multiples approaches applied are substantially identical to those
described below for the other portfolio companies). The different valuation
approaches are weighted to derive a fair value range, with the income approach
being more heavily weighted than the market approach. Management selects what
is considered to be the most appropriate point in the provided fair value
range at the reporting date.
Other portfolio companies - fair value assessment is performed internally as
described below.
Equity investments in private portfolio companies are valued by applying an
appropriate valuation method, which makes maximum use of market-based public
information, is consistent with valuation methods generally used by market
participants and is applied consistently from period to period, unless a
change in valuation technique would result in a more reliable estimation of
fair value.
The value of an unquoted equity investment is generally crystallised through
the sale or flotation of the entire business. Therefore, the estimation of
fair value is based on the assumed realisation of the entire enterprise at the
reporting date. Recognition is given to the uncertainties inherent in
estimating the fair value of unquoted companies and appropriate caution is
applied in exercising judgments and in making the necessary estimates.
The fair value of equity investments is determined using one of the valuation
methods described below:
Listed Peer Group Multiples
This methodology involves the application of a listed peer group earnings
multiple to the earnings of the business and is appropriate for investments in
established businesses and for which the Company can determine a group of
listed companies with similar characteristics.
The earnings multiple used in valuation is determined by reference to listed
peer group multiples appropriate for the period of earnings calculation for
the investment being valued.
The Company identifies a peer group for each equity investment taking into
consideration points of similarity with the investment such as industry,
business model, size of the company, economic and regulatory factors, growth
prospects (higher growth rate) and risk profiles. Some peer-group companies'
multiples may be more heavily weighted during valuation if their
characteristics are closer to those of the company being valued than others.
As a rule of thumb, last 12-month earnings will be used for the purposes of
valuation as a generally accepted method. Earnings are adjusted where
appropriate for exceptional, one-off or non-recurring items.
a. Valuation based on enterprise value
Fair value of equity investments in private companies can be determined as
their enterprise value less net financial debt (gross face value of debt less
cash) appearing in the most recent Financial Statements.
Enterprise value is obtained by multiplying measures of a company's earnings
by listed peer group multiple (EV/EBITDA) for the appropriate period. The
measures of earnings generally used in the calculation is recurring EBITDA for
the last 12 months (LTM EBITDA). In exceptional cases, where EBITDA is
negative, peer EV/Sales (enterprise value to sales) multiple can be applied to
last 12-month recurring/adjusted sales revenue of the business (LTM sales) to
estimate enterprise value.
Once the enterprise value is estimated, the following steps are taken:
Net financial debt appearing in the most recent financial
statements is subtracted from the enterprise value. If net debt exceeds
enterprise value, the value of shareholders' equity remains at zero (assuming
the debt is without recourse to Georgia Capital).
The resulting fair value of equity is apportioned between
Georgia Capital and other shareholders of the company being valued, if
applicable.
Valuation based on enterprise value using peer multiples is used
for businesses within non-financial industries.
b. Equity fair value valuation
Fair value of equity investment in companies can also be determined as using
price to earnings (P/E) multiple of similar listed companies.
The measure of earnings used in the calculation is recurring adjusted net
income (net income adjusted for non-recurring items and forex gains/ losses)
for the last 12 months (LTM net income). The resulting fair value of equity is
allocated between Georgia Capital and other shareholders of the portfolio
company, if any. Fair valuation of equity using peer multiples can be used for
businesses within financial sector (e.g. insurance companies).
Discounted cash flow
Under the discounted cash flow (DCF) valuation method, fair value is estimated
by deriving the present value of the business using reasonable assumptions of
expected future cash flows and the terminal value, and the appropriate
risk-adjusted discount rate that quantifies the risk inherent to the business.
The discount rate is estimated with reference to the market risk-free rate, a
risk adjusted premium and information specific to the business or market
sector. Under the discounted cash flow analysis unobservable inputs are used,
such as estimates of probable future cash flows and an internally-developed
discounting rate of return.
Net Asset Value
The net assets methodology involves estimating fair value of an equity
investment in a private portfolio company based on its book value at reporting
date. This method is appropriate for businesses (such as real estate) whose
value derives mainly from the underlying value of its assets and where such
assets are already carried at their fair values (fair values determined by
professional third-party valuation companies) on the balance sheet.
Price of recent investment
The price of a recent investment resulting from an orderly transaction,
generally represents fair value as of the transaction date. At subsequent
measurement dates, the price of a recent investment may be an appropriate
starting point for estimating fair value. However, adequate consideration is
given to the current facts and circumstances to assess at each measurement
date whether changes or events subsequent to the relevant transaction imply a
change in the investment's fair value.
Exit price
Fair value of a private portfolio company in a sales process, where the price
has been agreed but the transaction has not yet settled, is measured at the
best estimate of expected proceeds from the transaction, adjusted pro-rata to
the proportion of shareholding sold.
Validation
Fair value of investments estimated using one of the valuation methods
described above is cross-checked using several other valuation methods as
follows:
Listed peer group multiples - peer multiples such as P/E, P/B
(price to book) and dividend yield are applied to the respective metrics of
the investment being valued depending on the industry of the company. The
Company develops fair value range based on these techniques and analyses
whether fair value estimated above falls within this range.
Discounted cash flow (DCF) - The discounted cash flow valuation
method is used to determine fair value of equity investment. Based on DCF, the
Company might make upward or downward adjustment to the value of valuation
target as derived from primary valuation method. If fair value estimated using
discounted cash flow analysis significantly differs from the fair value
estimate derived using primary valuation method, the difference is examined
thoroughly, and judgement is applied in estimating fair value at the
measurement date.
In line with our strategy, from time to time, we may receive
offers from interested buyers for our private portfolio companies, which would
be considered in the overall valuation assessment, where appropriate.
Valuation process for Level 3 valuations
Georgia Capital hired third-party valuation professionals to assess fair value
of the large private portfolio companies as at 31 December 2021. Starting from
2022 third-party valuation professionals are hired to assess fair value of the
investment stage private portfolio companies as well. As of 31 December 2024,
such businesses include Hospitals (Large and Specialty & Regional and
Community Hospitals), Insurance (consisting of a. P&C insurance and b.
Medical insurance), Retail (Pharmacy), Clinics & Diagnostics, Renewable
energy and Education. The valuation is performed by applying several valuation
methods that are weighted to derive fair value range, with the income approach
being more heavily weighted than market approach. Management selects most
appropriate point in the provided fair value range at the reporting date. Fair
values of investments in other private portfolio companies are assessed
internally in accordance with Georgia Capital's valuation methodology by the
Valuation Workgroup.
Georgia Capital's Management Board proposes fair value to be placed at each
reporting date to the Audit and Valuation Committee. The Audit and Valuation
Committee is responsible for the review and approval of fair values of
investments at the end of each reporting period.
Description of significant unobservable inputs to level 3 valuations
The approach to valuations as of 31 December 2024 was consistent with the
Company's valuation process and policy.
Management analyses the impact of climate change on the valuations, such as by
incorporation of known effects of climate risks to the future cash flow
forecasts or through adjusting peer multiples the known differences in the
climate risk exposure as compared to the investment being fair valued. As at
31 December 2024, the management concluded that the effects of the climate
risks are reflected in the peer multiples and discount rates used in the
valuations and that no specific adjustments are required in relation of the
Group's investment portfolio measurement and respective fair value sensitivity
disclosures.
The following table show descriptions of significant unobservable inputs to
level 3 valuations of equity investments:
31 December 2024
Description Valuation technique Unobservable input Range*[implied multiple**] Fair value
Loans Issued DCF Discount rate - -
Equity investments at fair value
Large portfolio 1,434,749
Retail (Pharmacy) DCF, EV/EBITDA EV/EBITDA multiple 5.4x-15.6x 716,130
8.4x
P&C insurance DCF, P/E P/E multiple 5.6x-12.0x 313,140
10.7x
Medical insurance DCF, P/E P/E multiple 9.4x-14.1x 114,805
12.3x
Hospitals DCF, EV/EBITDA EV/EBITDA multiple 6.4x-12.9x 290,674
10.5x
Investment stage 557,392
Renewable energy DCF, EV/EBITDA EV/EBITDA multiple 4.3x-17.5x 252,606
11.3x
Education DCF, EV/EBITDA EV/EBITDA multiple 4.9x-25.4x 181,584
12.8x
Clinics and diagnostics DCF, EV/EBITDA EV/EBITDA multiple 4.8x-12.9x 123,202
10.6x
Other Sum of the parts EV/EBITDA multiples 5.5x-24.9x 160,314
8.0x-12.2x
8.0x-12.2x
Cashflow probability 90%-100%
NAV multiple 0.85x
*For equity investments at fair value the range refers to LTM multiples of
listed peer group companies, prior to any adjustments.
**Implied multiples are derived by dividing selected value of the company by
respective LTM earnings measure.
Georgia Capital hired third-party valuation professionals to assess fair value
of the large and investment stage private portfolio companies as at 31
December 2024 and 31 December 2023 including Insurance (consisting of a.
P&C insurance and b. Medical insurance), Hospitals (Large and Specialty
& Regional and Community Hospitals), Retail (Pharmacy) and Clinics and
Diagnostics. Starting from 30 June 2022, fair value assessment for Renewable
Energy and Education businesses are performed by third-party valuation
professionals as well. The valuation is performed by applying several
valuation methods that are weighted to derive fair value range, with the
income approach being more heavily weighted than market approach. Management
selects most appropriate point in the provided fair value range at the
reporting date.
On 31 December 2021, Georgia Capital signed SPA to dispose 80% interest in
Water Utility business, which was previously included within the large private
portfolio companies. As at 31 December 2023 the remaining 20% interest in
Water Utility business was valued using the pre-agreed put option multiple in
reference to the signed contract with the buyer as GCAP has a clear exit path
from the business through a put and call structure at pre-agreed EBITDA
multiples.
In April 2024, Georgia Capital signed an agreement to acquire a portfolio of
insurance contracts and the brand name from "Ardi". The acquisition was fully
financed by borrowings within the medical insurance business. As at 31
December 2024, in the valuations of the medical insurance business, Georgia
Capital also included the recently acquired Ardi, which was previously valued
at cost.
In October 2024, Georgia Capital entered into an agreement with a subsidiary
of Royal Swinkels N.V. ("Royal Swinkels") for the disposal of the beer and
distribution business. Following the disposal, the beer and distribution
business is held through a new holding company domiciled in the Netherlands
(the "Dutch Holdco"). GCAP obtained a 20% holding in the Dutch Holdco and
Royal Swinkels 80%. The parties have put in place a put/call structure
relating to the remaining GCAP 20% holding. The put option granted to GCAP can
be exercised at a pre-agreed EV/EBITDA multiple, in each of the twelve-month
periods following the approval of the audited consolidated financial
statements of the Dutch Holdco by shareholders for each of the financial years
ended 31 December in 2028, 2029 and 2030. The transaction has been completed
and net proceeds of c.US$ 63.0 million has been received by 31 December 2024.
As at 31 December 2024, several portfolio companies (Hospitals, Clinics,
P&C Insurance, together "Defendants") were engaged in litigation with the
former shareholders of Insurance Company Imedi L who allege that the they sold
their 66% shares in Imedi L to Defendants under duress at a price below market
value in 2012. Since the outset, Defendants have vigorously defended their
position that the claims are wholly without merit. The initial judgment of the
First Instance Court which was in favour of the Defendants was overruled and
upon reconsideration the First Instance Court partially satisfied the claim
and ruled that US$ 12.7 million principal amount plus an annual 5% interest
charge as lost income (c. US$ 21 million in total) should be paid by the
Defendants. The Defendants appealed the decision of the First Instance Court.
Several hearings have taken place at the Appellate Court and as of 31 December
2024 the case is still at the stage of consideration at the Appellate Court.
No date for the next hearing date has been set.
Defendants are confident that they will prevail and there have not been made a
provision for a potential liability in their financial statements. Management
shares Defendants' assessment of the merits of the case and considers that the
probability of incurring losses on this claim is low, accordingly, fair values
of portfolio companies do not take into account a potential liability in
relation to this litigation.
In December 2023, the Georgian National Competition Agency (the "Agency")
imposed fines on four companies in the Georgian pharmaceutical retailers'
sector, including GCAP's retail (pharmacy) business, for alleged
anti-competitive actions related to price quotations on certain prescription
medicines funded under the state programme. The penalty amount assessed by the
Agency on our retail (pharmacy) business is GEL 20.0 million derived by
utilising the single rate across all the alleged participants. The company has
appealed the Agency's decision in court and plans to vigorously defend its
position. No date of hearing has been set yet.
As at 31 December 2024, Georgia Education Group, LLC ("GEG") was involved in
litigation with the minority partner of the British Georgian Academy, LLC
("BGA"). The minority partner initially was claiming the annulment of the
memorandum of understanding ("MoU") under which Georgia Capital acquired a 70%
shareholding in BGA in 2019, alleging GEG's failure to invest in the
development of BGA. However, the minority partner later withdrew the lawsuit
and submitted a new claim to the court, seeking GEL 300,000 in damages, once
again alleging that GEG failed to invest in BGA's development.
On 6 February 2025, the minority partner filed an amended claim with the
court, seeking damages in the amount of US$ 15.5 million, termination of the
MoU and the SPA, and the consequent return of 70% of BGA's stake in the
minority partner's ownership.
GEG's assessment of the claim is that the claimant's allegations are based on
false factual grounds and are without any legal merit. Management shares GEG's
assessment of the merits of the case and considers that the probability of
incurring losses on this claim is low.
The case is currently pending before the court of first instance, and the date
of the preliminary hearing has not been set yet.
ADDITIONAL FINANCIAL INFORMATION
The FY24 NAV Statement shows the development of NAV since 31-Dec-23:
GEL '000, unless otherwise noted Dec-23 1. Value creation(( 49 )) 2a. 2b. 2c. Dividend 3.Operating expenses 4. Liquidity/ FX/Other Dec-24 Change
Investment and Divestments Buyback %
Listed and Observable Portfolio Companies
Lion Finance Group 1,225,847 339,985 - - (144,797) - - 1,421,035 15.9%
Water Utility 159,000 29,000 - - - - - 188,000 18.2%
Total Listed and Observable Portfolio Value 1,384,847 368,985 - - (144,797) - - 1,609,035 16.2%
Listed and Observable Portfolio value change % 26.6% 0.0% 0.0% -10.5% 0.0% 0.0% 16.2%
Private Portfolio Companies
Large Companies 1,436,231 30,237 - - (35,408) - 3,689 1,434,749 -0.1%
Retail (Pharmacy) 714,001 10,739 - - (10,048) - 1,438 716,130 0.3%
Insurance (P&C and Medical) 377,874 74,617 - - (25,360) - 814 427,945 13.3%
Of which, P&C Insurance 285,566 44,746 - - (17,986) - 814 313,140 9.7%
Of which, Medical Insurance 92,308 29,871 - - (7,374) - - 114,805 24.4%
Hospitals 344,356 (55,119) - - - - 1,437 290,674 -15.6%
Investment Stage Companies 566,614 (10,501) 11,933 - (12,258) - 1,604 557,392 -1.6%
Renewable Energy 266,627 (13,770) 11,333 - (12,258) - 674 252,606 -5.3%
Education 189,226 (8,853) 600 - - - 611 181,584 -4.0%
Clinics and Diagnostics 110,761 12,122 - - - - 319 123,202 11.2%
Other Companies 284,253 46,601 (163,037) - (9,289) - 1,786 160,314 -43.6%
Total Private Portfolio Value 2,287,098 66,337 (151,104) - (56,955) - 7,079 2,152,455 -5.9%
Private Portfolio value change % 2.9% -6.6% 0.0% -2.5% 0.0% 0.3% -5.9%
Total Portfolio Value (1) 3,671,945 435,322 (151,104) - (201,752) - 7,079 3,761,490 2.4%
Total Portfolio value change % 11.9% -4.1% 0.0% -5.5% 0.0% 0.2% 2.4%
Net Debt (2) (296,808) - 148,504 (135,718) 201,752 (21,379) (50,776) (154,425) -48.0%
of which, Cash and liquid funds 107,910 - 157,371 (135,718) 201,752 (21,379) (31,699) 278,237 NMF
of which, Loans issued 9,212 - (8,867) - - - (345) - NMF
of which, Accrued dividend income - - - - - - - - NMF
of which, Gross Debt (413,930) - - - - - (18,732) (432,662) 4.5%
Net other assets/ (liabilities) (3) 3,375 - 2,600 (805) - (13,900) 10,678 1,948 -42.3%
of which, share-based comp. - - - - - (13,900) 13,900 - NMF
Net Asset Value (1)+(2)+(3) 3,378,512 435,322 - (136,523) - (35,279) (33,019) 3,609,013 6.8%
NAV change % 12.9% 0.0% -4.0% 0.0% -1.0% -1.0% 6.8%
Shares outstanding(49) 40,736,528 - - (3,790,417) - - 666,377 37,612,488 -7.7%
Net Asset Value per share, GEL 82.94 10.68 (0.00) 4.81 (0.00) (0.87) (1.60) 95.95 15.7%
NAV per share, GEL change % 12.9% 0.0% 5.8% 0.0% -1.0% -1.9% 15.7%
Basis of presentation
This announcement contains unaudited financial results presented in accordance
UK-adopted international accounting standards ("IFRS"). The financial results
are unaudited and derived from management accounts.
The information in this Announcement in respect of full year 2024 preliminary
results, which was approved by the Board of Directors on 23 February 2025,
does not constitute statutory accounts as defined in Section 435 of the UK
Companies Act 2006. The Group's financial statements for the year ended 31
December 2023 were filed with the Registrar of Companies, and the audit
reports were unqualified and contained no statements in respect of Sections
498 (2) or (3) of the UK Companies Act 2006. The financial statements for the
year ended 31 December 2024 will be included in the Annual Report and Accounts
to be published in March 2025 and filed with the Registrar of Companies in due
course. Under IFRS 10, Georgia Capital PLC meets the "investment entity"
definition and does not consolidate its portfolio companies, instead the
investments are measured at fair value. Our Group level discussion is
therefore based on the IFRS 10 investment entity accounts.
Net Asset Value statement, as included in notes to IFRS financial statements,
summarises the Group's equity value and drivers of related changes between the
reporting periods. Georgia Capital PLC holds an investment in JSC Georgia
Capital (an investment entity on its own), which holds a portfolio of
investments, each measured at fair value. Georgia Capital PLC measures its
investment in JSC Georgia Capital at fair value through profit and loss under
IFRS, estimated with reference to JSC Georgia Capital's own investment
portfolio value as offset against its net debt. NAV is calculated at
stand-alone GCAP level, which represents the aggregation of the stand-alone
assets and liabilities of Georgia Capital PLC and JSC Georgia Capital.
The income statement presents the Group's results of operations for the
reporting period. As we conduct most of our operations through JSC Georgia
Capital, through which we hold our portfolio companies, the IFRS results
provide little transparency on the underlying trends. To enable a
comprehensive view of the combined operations of Georgia Capital PLC and JSC
Georgia Capital (together referred to herein as "GCAP") as if it were one
holding company, we adjust the accounts ("adjusted IFRS 10 Income Statement").
For details on the methodology underlying the preparation of the adjusted
income statement, please refer to page 94 in Georgia Capital PLC 2023 Annual
report. A full reconciliation of the adjusted income statement, to the IFRS
income statement is provided on page 22. Our adjusted IFRS 10 income statement
may be viewed as alternative performance measure (APM).
Additionally, for the majority of our portfolio companies the fair value of
our equity investment is determined by the application of a market approach
(listed peer multiples and precedent transactions) and an income approach
(DCF). Under the market approach, listed peer group earnings multiples are
applied to the trailing twelve month (LTM) stand-alone IFRS earnings of the
relevant business. Under the discounted cash flow (DCF) valuation method, fair
value is estimated by deriving the present value of the business using
reasonable assumptions of expected future cash flows and the terminal value,
and the appropriate risk-adjusted discount rate that quantifies the risk
inherent to the business. As such, the stand-alone IFRS results and
developments behind IFRS earnings of our portfolio companies are key drivers
in their valuations. Following the Group discussion, we therefore also present
IFRS financial statements for material companies and a related brief results
discussion.
Summary of valuation methodology for our investment portfolio
The fair values of the large private portfolio and investment stage companies
at year-end 2024 were assessed by an independent valuation company.
Combination of income approach (DCF) and market approach (listed peer
multiples and in some cases precedent transactions) was applied consistently
under both, internal and external valuation approaches. However, the
independent valuation company's approach is more highly weighted towards DCF.
GLOSSARY
1. APM - Alternative Performance Measure.
2. GCAP refers to the aggregation of stand-alone Georgia Capital PLC
and stand-alone JSC Georgia Capital accounts.
3. Georgia Capital and "the Group" refer to Georgia Capital PLC and
its portfolio companies as a whole.
4. NMF - Not meaningful.
5. NAV - Net Asset Value, represents the net value of an entity and is
calculated as the total value of the entity's assets minus the total value of
its liabilities.
6. LTM - last twelve months.
7. EBITDA - Earnings before interest, taxes, non-recurring items, FX
gain/losses and depreciation and amortisation; The Group has presented these
figures in this document because management uses EBITDA as a tool to measure
the Group's operational performance and the profitability of its operations.
The Group considers EBITDA to be an important indicator of its representative
recurring operations.
8. ROIC - return on invested capital is calculated as EBITDA less
depreciation, divided by the aggregate amount of total equity and borrowed
funds.
9. Loss ratio equals net insurance claims expense divided by net
earned premiums.
10. Expense ratio in P&C Insurance equals sum of acquisition costs and
operating expenses divided by net earned premiums.
11. Combined ratio equals sum of the loss ratio and the expense ratio in the
insurance business.
12. ROAE - Return on average total equity (ROAE) equals profit for the
period attributable to shareholders divided by monthly average equity
attributable to shareholders of the business for the same period.
13. Net investment - gross investments less capital returns (dividends and
sell-downs).
14. EV - enterprise value.
15. Liquid assets & loans issued include cash, marketable debt
securities and issued short-term loans at GCAP level.
16. Total return/value creation - total return/value creation of each
portfolio investment is calculated as follows: we aggregate a) change in
beginning and ending fair values, b) gains from realised sales (if any) and c)
dividend income during period. We then adjust the net result to remove capital
injections (if any) to arrive at the total value creation/investment return.
17. WPP - Wind power plant.
18. HPP - Hydro power plant.
19. PPA - Power purchase agreement.
20. Number of shares outstanding - Number of shares in issue less total
unawarded shares in JSC GCAP's management trust.
21. Market Value Leverage ("MVL"), also Loan to Value ("LTV") -
Interchangeably used across the document and is calculated by dividing net
debt to the total portfolio value.
22. NCC - Net Capital Commitment, represents an aggregated view of all
confirmed, agreed and expected capital outflows at both Georgia Capital PLC
and JSC Georgia Capital levels.
23. NCC Ratio - Equals Net Capital Commitment divided by portfolio value.
ABOUT GEORGIA CAPITAL PLC
Georgia Capital PLC (LSE: CGEO LN) is a platform for buying, building and
developing businesses in Georgia (together with its subsidiaries, "Georgia
Capital" or "the Group"). The Group's primary business is to develop or buy
businesses, help them institutionalise their management and grow them into
mature businesses that can further develop largely on their own, either with
continued oversight or independently. Once Georgia Capital has successfully
developed a business, the Group actively manages its portfolio to determine
each company's optimal owner. Georgia Capital will normally seek to monetise
its investment over a 5-10 year period from initial investment.
Georgia Capital currently has the following portfolio businesses: (1) a retail
(pharmacy) business, (2) an insurance business (P&C and medical
insurance), (3) a hospitals business, (4) a renewable energy business (hydro
and wind assets), (5) an education business; and (6) a clinics and diagnostics
business. Georgia Capital also holds other small private businesses across
different industries in Georgia; a 20.0% equity stake in the water utility
business and a 19.2% equity stake in LSE listed Lion Finance Group PLC ("Lion
Finance Group" or the "Bank"), formerly known as "Bank of Georgia Group PLC",
the holding company of leading universal banks in Georgia and Armenia.
Forward looking statements
This announcement contains forward-looking statements, including, but not
limited to, statements concerning expectations, projections, objectives,
targets, goals, strategies, future events, future revenues or performance,
capital expenditures, financing needs, plans or intentions relating to
acquisitions, competitive strengths and weaknesses, plans or goals relating to
financial position and future operations and development. Although Georgia
Capital PLC believes that the expectations and opinions reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations and opinions will prove to have been correct. By their nature,
these forward-looking statements are subject to a number of known and unknown
risks, uncertainties and contingencies, and actual results and events could
differ materially from those currently being anticipated as reflected in such
statements. Important factors that could cause actual results to differ
materially from those expressed or implied in forward-looking statements,
certain of which are beyond our control, include, among other things: regional
instability; currency fluctuations and risk, including depreciation of the
Georgian Lari, and macroeconomic risk, regulatory risk across a wide range of
industries; investment risk; liquidity risk; portfolio company strategic and
execution risks and other key factors that could adversely affect our business
and financial performance, which are contained elsewhere in this document and
in our past and future filings and reports and also the 'Principal Risks and
Uncertainties' included in 1H24 Results Announcement and in Georgia Capital
PLC's Annual Report and Accounts 2023. No part of this document constitutes,
or shall be taken to constitute, an invitation or inducement to invest in
Georgia Capital PLC or any other entity and must not be relied upon in any way
in connection with any investment decision. Georgia Capital PLC and other
entities undertake no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise, except to
the extent legally required. Nothing in this document should be construed as a
profit forecast.
Disclaimer
Georgia Capital engaged Kroll, a third-party independent valuation firm to
provide a range of fair values of certain subject investments. For the period
ended 31 December 2024, Georgia Capital asked the independent valuation firm
to independently estimate a range of fair value for 100 percent of Georgia
Healthcare Group ("GHG"), A Group ("Insurance"), Georgia Pharmacy Group
("Pharmacy"), Georgian Renewable Power Holding ("GRPH") and Georgia Education
Group ("GEG"). Kroll performed limited procedures and applied their judgement
to estimate fair value range based on the facts and circumstances known to
them as at the valuation date, 31 December 2024. The analysis performed by
Kroll was based upon data and assumptions provided by Georgia Capital and
received from third party sources, which the independent valuation firm relied
upon as being accurate without independent verification. The advice of the
third-party independent valuation firm is one input that the Georgia Capital
considered for determining the fair value of GHG, Insurance, Pharmacy, GRPH
and GEG for which the Company is ultimately and solely responsible. In this
context, Kroll's role as independent valuation service provider did not
constitute an endorsement of Georgia Capital either from a financial or
operational point of view, nor did they provide a transaction, fairness or
solvency opinion. The results of the independent valuation report should not
be relied upon by anyone for any investment or transaction purpose related to
the Company or any underlying investments.
COMPANY INFORMATION
Georgia Capital PLC
Registered Address
Central Square
29 Wellington Street
Leeds, LS1 4DL
United Kingdom
www.georgiacapital.ge (http://www.georgiacapital.ge)
Registered under number 10852406 in England and Wales
Stock Listing
London Stock Exchange PLC's Main Market for listed securities
Ticker: "CGEO.LN"
Contact Information
Georgia Capital PLC Investor Relations
Telephone: +44 (0) 203 178 4034; +995 322 000000
E-mail: ir@gcap.ge (mailto:ir@gcap.ge)
Auditors
PricewaterhouseCoopers LLP ("PwC")
7 More London Riverside,
London SE1 2RT,
United Kingdom
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
Bristol BS13 8AE
United Kingdom
Please note that Investor Centre is a free, secure online service run by our
Registrar, Computershare,
giving you convenient access to information on your shareholdings.
Investor Centre Web Address - www.investorcentre.co.uk
(http://www.investorcentre.co.uk) .
Investor Centre Shareholder Helpline: +44 (0) 370 873 5866
Share price information
Shareholders can access both the latest and historical prices via the website
www.georgiacapital.ge (http://www.georgiacapital.ge)
1 See "Basis of Presentation" for more background on page 30. Private
portfolio companies' performance includes aggregated stand-alone IFRS results
for our portfolio companies, which can be viewed as APMs for Georgia Capital,
since Georgia Capital does not consolidate its subsidiaries and instead
measures them at fair value under IFRS.
2 Please see definition in glossary on page 32.
3 Includes both the buybacks under the share buyback and cancellation
programme and for the management trust.
(( 4 )) Includes regular cash and buyback dividends.
5 Private portfolio companies' performance highlights are presented
excluding the water utility business. Aggregated numbers are presented
like-for-like basis.
6 The results of our four smaller businesses included in other portfolio
companies (described on page 21) are not broken out separately. Performance
totals, however, include the other portfolio companies' results (and are
therefore not the sum of large and investment stage portfolio results).
7 Determined by taking into account the peak number of 47.9 million shares
issued as of 31-Dec-20.
8 Please see definition in glossary on page 32.
(( 9 )) Including GEL 8.2 million attributable to the capital re-allocation to
the wine business for the deleveraging purposes.
10 Change in the fair value attributable to the change in actual or expected
earnings of the business, as well as the change in net debt.
11 Change in the fair value attributable to the change in valuation
multiples and the effect of exchange rate movement on net debt.
12 Please read more about valuation methodology on page 30 in "Basis of
presentation".
13 Enterprise value is presented excluding the non-operational assets, added
to the equity value of the education business at cost.
14 Investments are made at JSC Georgia Capital level, the Georgian holding
company.
15 Please see definition in glossary on page 32.
16 Change in the fair value attributable to the change in actual or expected
earnings of the business, as well as the change in net debt.
17 Change in the fair value attributable to the change in valuation
multiples and the effect of exchange rate movement on net debt.
18 Excluding the non-operational assets, added to the equity value of the
education business at cost.
19 Investments are made and dividends are received at JSC Georgia Capital
level, the Georgian holding company.
20 Dividends are received at JSC Georgia Capital level, the Georgian holding
company.
21 Includes expenses such as external audit fees, legal counsel, corporate
secretary and other similar administrative costs.
22 Cash-based management expenses are cash salary and cash bonuses
paid/accrued for staff and management compensation.
23 Share-based management expenses are share salary and share bonus expenses
of management and staff.
24 Fund type expenses include expenses such as audit and valuation fees,
fees for legal advisors, Board compensation and corporate secretary costs.
25 Management fee is the sum of cash-based and share-based operating
expenses (excluding fund-type costs).
26 The detailed IFRS financial statements are included in supplementary
excel file, available at https://georgiacapital.ge/ir/financial-results
(https://georgiacapital.ge/ir/financial-results) . In 2024, certain
transaction-related expenses, such as POS-terminal charges, courier services,
and other related expenses, have been reclassified from operating expenses to
components of gross profit. The comparative 4Q23 and FY23 periods have been
adjusted retrospectively.
27 Of which - cash outflow on capex of GEL 7.1 million in 4Q24 and GEL 24.7
million in FY24 (GEL 13.5 million in 4Q23 and GEL 33.9 million in FY23);
proceeds from sale of PPE of GEL 2.2 million in FY24 (GEL 14.6 million in
FY23); cash outflow on minority acquisition of GEL 1.0 million in 4Q24 and
FY24 (GEL 89.1 million in FY23).
28 Calculated by deducting capex and minority acquisition from operating
cash flows and adding proceeds from the sale of PPE/IP.
29 The detailed IFRS financial statements are included in supplementary
excel file, available at https://georgiacapital.ge/ir/financial-results
(https://georgiacapital.ge/ir/financial-results) .
30 Calculated based on average equity, adjusted for preferred shares.
31 The numbers were adjusted retrospectively to account for the strategic
reorganisation in the healthcare businesses that occurred in December 2023.
32 The detailed IFRS financial statements are included in supplementary
excel file, available at https://georgiacapital.ge/ir/financial-results
(https://georgiacapital.ge/ir/financial-results) .
33 Net revenue - Gross revenue less corrections and rebates. Margins are
calculated from gross revenue.
34 Of which - capex of GEL 14.8 million and GEL 53.0 million in 4Q24 and
FY24, respectively (GEL 14.1 million and GEL 48.5 million in 4Q23 and FY23
respectively); proceeds from the sale of property of GEL 30.1 million in FY24
(GEL 2.9 million in FY23).
35 Operating cash flows less capex, plus net proceeds from the sale of
Batumi Hospital.
36 The respective costs divided by gross revenues.
37 Adjusted for the sale of Batumi Hospital, the number of admissions in
Regional and Community Hospitals was 211.1 thousand and 879.2 thousand in 4Q23
and FY23, respectively (down 7.2% and 4.5% y-o-y in 4Q24 and FY24,
respectively).
38 The detailed IFRS financial statements (in both US$ and GEL) are included
in supplementary excel file, available at
https://georgiacapital.ge/ir/financial-results
(https://georgiacapital.ge/ir/financial-results) .
39 Please see definition in glossary on page 32.
40 The detailed IFRS financial statements are included in supplementary
excel file, available at https://georgiacapital.ge/ir/financial-results
(https://georgiacapital.ge/ir/financial-results) .
41 The numbers were adjusted retrospectively to account for the recent
strategic reorganisation in the healthcare businesses. The FY23 amounts
reflect the retrospective adjustment for GEL 2.9 million gain recorded from
the sale of one of the polyclinics buildings in 3Q23.
42 The detailed IFRS financial statements are included in supplementary
excel file, available at https://georgiacapital.ge/ir/financial-results
(https://georgiacapital.ge/ir/financial-results) .
43 Net revenue - Gross revenue less corrections and rebates. Margins are
calculated from Gross revenue.
44 Operating cash flows less capex.
45 Of which capex of GEL 2.4 million in 4Q24 and GEL 8.7 million in FY24
(GEL 3.2 million in 4Q23 and GEL 11.2 million in FY23).
46 In 2024, two polyclinics located in rural areas of Georgia were
reclassified under the Regional and Community Hospitals. The comparative 2023
data has been adjusted retrospectively.
47 Net revenue - Gross revenue less corrections and rebates. Margins are
calculated from Gross revenue.
48 As at 31 December 2024 and 31 December 2023 cash and cash equivalents
consist of current accounts with credit institutions.
(#_ftnref49)
49 Please see definition in glossary on page 32.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR PKNBKFBKDFBBRecent news on Georgia Capital
See all newsREG - Georgia Capital PLC - Transaction in Own Shares
AnnouncementREG - Georgia Capital PLC - Transaction in Own Shares
AnnouncementREG - Georgia Capital PLC - Director/PDMR Shareholding
AnnouncementREG - Georgia Capital PLC - Transaction in Own Shares
AnnouncementREG - Georgia Capital PLC - Cancellation of Treasury Shares
Announcement