REG - Georgia Capital PLC - Half-year Report
Wed 07:00
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RNS Number : 1123U Georgia Capital PLC 06 August 2025
FINANCIAL PERFORMANCE HIGHLIGHTS (IFRS) 1 (#_ftn1)
GEL '000, unless otherwise noted (unaudited) Jun-25 Mar-25 Change Dec-24 Change
Georgia Capital NAV overview
NAV per share, GEL 125.63 106.73 17.7% 95.95 30.9%
NAV per share, GBP 33.61 29.80 12.8% 27.14 23.8%
Net Asset Value (NAV) 4,463,211 3,857,578 15.7% 3,609,013 23.7%
Shares outstanding 2 (#_ftn2) 35,525,800 36,142,305 -1.7% 37,612,488 -5.5%
Cash and liquid funds 342,492 3 (#_ftn3) 161,853 NMF 278,237 23.1%
NCC ratio(2) 7.0% 13.5% -6.5 ppts 12.8% -5.8 ppts
Georgia Capital Performance 2Q25 2Q24 Change 1H25 1H24 Change
Total portfolio value creation 670,866 (447,522) NMF 1,014,360 (140,578) NMF
of which, listed and observable businesses 590,501 (258,645) NMF 838,450 65,899 NMF
of which, private businesses 80,365 (188,877) NMF 175,910 (206,477) NMF
Investments 990 3,068 -67.7% 12,692 6,068 NMF
Divestments (191,744) - NMF (191,744) - NMF
Buybacks 4 (#_ftn4) 55,969 27,341 NMF 143,845 50,010 NMF
Dividend income 5 (#_ftn5) 49,697 36,507 36.1% 57,705 50,307 14.7%
Net income/(loss) 654,546 (483,060) NMF 988,747 (195,458) NMF
Private portfolio companies' performance(1, 6 (#_ftn6) ) 2Q25 2Q24 Change 1H25 1H24 Change
Large portfolio companies
Revenue 439,273 384,089 14.4% 869,842 739,464 17.6%
EBITDA 62,256 48,292 28.9% 119,438 87,508 36.5%
Net operating cash flow 53,896 37,163 45.0% 96,992 71,573 35.5%
Total portfolio 7 (#_ftn7)
Revenue 552,857 498,728 10.9% 1,076,457 977,862 10.1%
EBITDA 87,339 72,090 21.2% 164,975 135,272 22.0%
Net operating cash flow 76,377 57,747 32.3% 144,377 103,206 39.9%
KEY POINTS
Ø NAV per share (GEL) increased 17.7% in 2Q25, driven by both the robust
operating growth of our private large portfolio companies and the continued
growth in Lion Finance Group PLC's ("LFG") share price
Ø Outstanding quarterly results across our private large portfolio companies
with 14.4% and 28.9% y-o-y increases in aggregated revenues and EBITDA in
2Q25, respectively, leading to a 45.0% y-o-y increase in net operating cash
flow
Ø Completion of the water utility put option exercise and receipt of US$ 70.4
million cash proceeds in Jul-25, further enhancing GCAP's liquidity position
and contributing to a 6.5 ppt q-o-q improvement in the NCC ratio to 7.0% in
2Q25
Ø NCC ratio over the cycle target reduced to 10% from previous 15%, in line
with our deleveraging strategy
Ø US$ 18 million increase to the existing share buyback and cancellation
programme was announced in Jul-2025, which will complete the GEL 300 million
capital return package, significantly earlier than the originally announced
end-2026 timeline
Ø Launch of new GEL 700 million capital return programme 8 (#_ftn8) to be
executed through end-2027, commencing with:
o An initial US$ 50 million share buyback programme following the completion
of the current programme in Aug-2025, and
o At least US$ 50 million partial redemption of the US$ 150 million local
Holding Company bonds in Sep-2025
Ø 1.3 million shares repurchased during 2Q25 and so far in 3Q25 (total bought
back since demerger now 14.1 million shares (US$ 187 million cost),
representing 29.4(( 9 (#_ftn9) ))% of GCAP's peak issued share capital)
Conference call: An investor/analyst conference call will be held on
6-AUG-2025, at 14:00 UK / 15:00 CET / 9:00 US Eastern Time. Please register at
the Registration Link
(https://gcap-ge.zoom.us/webinar/register/WN_lV1l_UI3TJee7RK9JpCXMA) to attend
the event. Further details are available on the Group's webpage
(https://georgiacapital.ge/) .
CHAIRMAN AND CEO'S STATEMENT
I am pleased to present another strong performance in the second quarter of
2025, which demonstrates the recent significant strategic, financial, and
operational progress of Georgia Capital.
NAV per share (GEL) increased by 17.7% to GEL 125.63 in 2Q25. The increase in
NAV per share (GEL) in 2Q25 reflects excellent underlying operating
performances across the portfolio, reinforcing GCAP's long-term value growth
proposition for our shareholders. Value creation in our listed and observable
portfolio amounted to GEL 590.5 million (15.3 ppts positive impact on the NAV
per share), driven by a 29.7% increase in Lion Finance Group PLC's share price
during the quarter. The private portfolio companies delivered GEL 80.4 million
value creation (+2.1 ppts impact), underpinned by the strong performance of
our high-quality, resilient large businesses, as detailed below. The NAV per
share growth was further supported by our ongoing share buyback and
cancellation programme (+1.1 ppts impact), partially offset by management
platform-related costs and net interest expense (-0.4 ppts impact in total).
In GBP terms, the NAV per share in 2Q25 increased by 12.8%, reflecting GBP's
4.4% appreciation against GEL during the quarter. Since 2018, the NAV per
share (GEL) has grown at a 17.4% CAGR.
Our private large portfolio companies continue to deliver superior operating
performance. In 2Q25, the aggregated revenue of our private large portfolio
companies increased by 14.4% y-o-y to GEL 439.3 million, while EBITDA
increased by 28.9% y-o-y to GEL 62.3 million. This resulted in quarterly
aggregated net operating cash flows from these businesses of GEL 53.9 million,
up 45.0% y-o-y.
· Our retail (pharmacy) business had a very strong quarter. Successful
sales initiatives that drove 6.6% same-store revenue growth and a 10.3%
increase in average bill size, along with the addition of 14 new pharmacy
stores in 2Q25, led to a 24.6% y-o-y increase in EBITDA in 2Q25. This
performance also reflects the positive outcome of negotiations to improve
trading terms with key suppliers which, together with strong top-line growth,
translated into a 2.2 ppts y-o-y improvement in the 2Q25 gross profit margin
(1.5 ppts improvement in EBITDA margin in 2Q25).
· Our insurance business posted 17.5% y-o-y growth in pre-tax profit in
2Q25, reflecting positive developments in both the P&C and medical
insurance segments, the latter also boosted by the acquisition of the Ardi
insurance portfolio in April 2024.
· Within our healthcare services business, increased demand for high
revenue-generating outpatient services at our large and specialty hospitals,
ongoing facility optimisation, and a shift in the sales mix toward
higher-margin services at regional and community hospitals, combined with
solid performance from our clinics and diagnostics, led to a 36.4% y-o-y
EBITDA growth in 2Q25.
Completion of the water utility put option exercise and receipt of cash
proceeds. In June 2025, we exercised the option to put our 20% minority stake
in the water utility business. Full proceeds of US$ 70.4 million were received
on 29 July 2025. Over the last few years, the value of GCAP's 20% stake
appreciated significantly, from US$ 45.0 million at the time of the disposal
of an 80% stake in 2021, to US$ 70.4 million, translating into 2.9x MOIC in
US$ (3.8x MOIC in GEL) and 19.1% IRR in US$ (25.3% IRR in GEL) for 100% stake.
We are completing the GEL 300 million capital return programme well ahead of
the initially announced timeline. In May 2024, we announced our Board's
intention to make available at least GEL 300 million for share buybacks and
dividends through the end of 2026, aiming to capitalise on the attractive
opportunity presented by the NAV per share discount levels. As part of this
package, in July 2025, we increased the ongoing buyback programme with a final
tranche of US$ 18 million, which is expected to be fully utilised in August
2025. Upon completion, under the GEL 300 million capital return package, we
will have repurchased c.6.5 million shares, representing c.13.5% of GCAP's
peak issued share capital. Notwithstanding the scale of these capital returns,
GCAP's liquidity remains solid, in excess of GEL 340 million.
Launch of new GEL 700 million capital return programme until end-2027. Today,
we are announcing the launch of a new GEL 700 million capital return
programme, which we plan to implement through the end of 2027. The programme
covers capital returns through share buybacks, dividends and potential early
paydowns of up to US$ 150 million of GCAP's existing sustainability-linked
local bonds (which otherwise mature in 2028). The programme, supported by
significant improvement in the NCC ratio to a record-low level of 7.0% in
2Q25, is expected to be funded by a combination of the existing strong liquid
funds and robust free cash flow generation at GCAP (together expected to
exceed GEL 700 million over the programme period). The new programme will
commence following the completion of the current share buyback programme in
August 2025, starting with an initial US$ 50 million share buyback programme.
Additionally, in September 2025, GCAP expects to exercise a call option to
redeem at least US$ 50 million of its existing US$ 150 million local Holding
Company bonds.
Update on Passive Foreign Investment Company ("PFIC"). The Company believes
that it was not a PFIC for its taxable year ending on December 31, 2024, and
does not expect to be a PFIC for the current taxable year or the foreseeable
future 10 (#_ftn10) . If the Company was a PFIC for any taxable year during
which a U.S. person held our shares, the U.S. person holder would be subject
to adverse U.S. federal income tax consequences. To mitigate the potential
negative tax implications for U.S. shareholders, the Board is committed to
taking action where appropriate to prevent the Company from becoming a PFIC.
The Board continues to monitor the Company's income and consolidated assets
for PFIC purposes. Changes to the composition and value of the Company's
assets in recent years, including the significant rise in the value of the
Company's equity stake in Lion Finance Group PLC ("LFG") (which represents
nearly 90% of GCAP's current "passive" assets) over recent years, combined
with completed exits and other business changes, have increased the Company's
proportion of "passive" assets (less than 25% equity holdings) within Georgia
Capital's consolidated total assets. The increase has been substantial, from
26% as at 31 December 2021 to approximately 45% as of 30 June 2025, however,
the Company's passive assets remain meaningfully below the 50% threshold set
by the PFIC regulations (determined annually based on average quarterly
balances).
Georgia Capital is a long-term investor in LFG. We see significant opportunity
for further value accretion - and expect to hold a material stake - for years
to come. Since the end of 2Q25, with our PFIC status in mind, we have reduced
our stake in LFG to 18.1% through on-market sales. The sales have represented
approximately 10% of LFG's average daily trading volume for the same period.
While we are comfortable with our current position and there is no immediate
requirement to take further action, we will continue to monitor the Company's
PFIC status. In order to reduce the risk of becoming a PFIC, particularly in
circumstances such as a significant increase in the value of LFG or further
business changes at GCAP, we would consider further diluting our shareholding
in LFG, to be undertaken in an orderly manner, while continuing to hold a
material stake in LFG.
From a macroeconomic perspective, Georgia's economy remained strong in 1H25,
with preliminary data showing 8.3% y-o-y real GDP growth in 1H25. Despite
regional geopolitical volatility, activity was supported by robust FX inflows,
banking sector credit growth, rising wages, and declining unemployment.
Inflation re-emerged, reaching 4.3% in July, above the NBG's 3% target, driven
by both domestic and imported pressures. GEL has appreciated 4.1% YTD against
the US$ but weakened 6.3% against the EUR amid shifting geopolitical and trade
dynamics. FX inflows remained robust, supported by a 21.0% increase in goods
exports and 10.0% growth in remittances during the quarter. International
reserves began recovering, rising to US$ 4.7 billion in June (+2.3% y-o-y),
supported by central bank FX purchases totalling US$ 879 million since March.
Monetary policy remains tight, with the policy rate at 8% since May 2024.
Fiscal conditions improved, with government debt declining to 36% of GDP, the
lowest since 2014, on the back of recent economic growth and continued
deleveraging.
Outlook. The strong performance of our portfolio companies, combined with our
ongoing commitment to capital returns, was instrumental in delivering our
excellent 2Q25 results, also reflected in the narrowing of the NAV per share
discount to its lowest level since COVID-19. This performance was supported by
the resilience of the Georgian economy, which has continued to demonstrate
solid and sustained growth despite ongoing geopolitical challenges. In this
context, I am confident that Georgia Capital is well-positioned to continue
delivering on its value growth story through consistent NAV per share growth
and sustainable EBITDA growth across our large portfolio companies over the
medium to long term. At the same time, we remain committed to returning
capital through the launch of our new GEL 700 million capital return
programme, while advancing towards our aspiration to carry no leverage at the
GCAP Holdco level in the medium to long term. As a result, the over the cycle
NCC ratio target has been reduced to 10% from the previous 15% target.
Irakli Gilauri, Chairman and CEO
Statement from Neil Janin, Chairman of the Remuneration Committee
Over time, Irakli Gilauri has accumulated a significant shareholding in
Georgia Capital, while not receiving any cash compensation for the last seven
years. The Remuneration Committee has therefore encouraged Irakli to sell some
of his holdings in Georgia Capital. Irakli has confirmed today that he intends
to sell up to 625,000 Georgia Capital shares over time, for financial
diversification purposes. This will be his first sale of Georgia Capital
shares since the establishment of the Company in May 2018.
Irakli currently holds a total of 3,126,503 shares, of
which 2,131,709 shares are held directly and 994,794 shares remain
unvested (and held in the form of Nil cost options) and will vest over the
next few years according to the Remuneration Policy vesting schedules. He has
accumulated his shareholding over his 20-year tenure with Georgia Capital and,
previously Bank of Georgia, from a combination of cash purchases (213,523
shares), deferred salary shares (nil cost options), and share-based bonus
payments from, initially, Bank of Georgia and then Georgia Capital. After the
sale, and following the award of 2025 salary shares, Irakli will continue to
hold approximately 2.7 million shares.
Irakli remains extremely confident in the strong prospects of both Georgia
Capital and the Georgian economy, and he will remain a significant shareholder
in the Company. For family estate planning purposes, Irakli has informed the
Company that he also intends to move his remaining holding into a separate
entity.
DISCUSSION OF GROUP RESULTS
The discussion below analyses the Group's unaudited net asset value at
30-Jun-25 and its income for the second quarter and first half period then
ended on an IFRS basis (see "Basis of Presentation" on page 18 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 second quarter (31-Mar-25 and 30-Jun-25). 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
first half of 2025 see page 17.
NAV STATEMENT 2Q25
GEL '000, unless otherwise noted Mar-25 1. Value creation(( 11 (#_ftn11) )) 2a. 2b. 2c. Dividends 3. Operating expenses 4. Liquidity/ FX/Other Jun-25 Change
(Unaudited) Investment and Divestments Buyback %
Listed and observable portfolio companies
Lion Finance Group 1,668,984 586,757 - - (32,916) - - 2,222,825 33.2%
Water utility 188,000 3,744 (191,744) - - - - - NMF
Total listed and observable portfolio value 1,856,984 590,501 (191,744) - (32,916) - - 2,222,825 19.7%
Listed and observable portfolio value change % 31.8% -10.3% 0.0% -1.8% 0.0% 0.0% 19.7%
Private portfolio companies
Large portfolio companies 1,687,399 91,573 - - (16,781) - 943 1,763,134 4.5%
Retail (pharmacy) 783,008 41,966 - - (9,960) - 567 815,581 4.2%
Insurance (P&C and medical) 441,055 29,330 - - (6,821) - 105 463,669 5.1%
Healthcare services 463,336 20,277 - - - - 271 483,884 4.4%
Emerging and other companies 566,210 (11,208) 990 - - - 301 556,293 -1.8%
Total private portfolio value 2,253,609 80,365 990 - (16,781) - 1,244 2,319,427 2.9%
Private portfolio value change % 3.6% 0.0% 0.0% -0.7% 0.0% 0.1% 2.9%
Total portfolio value (1) 4,110,593 670,866 (190,754) - (49,697) - 1,244 4,542,252 10.5%
Total portfolio value change % 16.3% -4.6% 0.0% -1.2% 0.0% 0.0% 10.5%
Net debt (2) (255,828) - 190,754 (56,029) 49,697 (5,821) 350 (76,877) -69.9%
of which, cash and liquid funds 161,853 - (990) (56,029) 49,697 (5,821) 2,038 150,748 -6.9%
of which, loans issued - - - - - - 513 513 NMF
of which, receivable on put option exercise - - 191,744 - - - - 191,744 NMF
of which, gross debt (417,681) - - - - - (2,201) (419,882) 0.5%
Net other assets/(liabilities) (3) 2,813 - - 60 - (3,374) (1,663) (2,164) NMF
of which, share-based comp. - - - - - (3,374) 3,374 - NMF
Net asset value (1)+(2)+(3) 3,857,578 670,866 - (55,969) - (9,195) (69) 4,463,211 15.7%
NAV change % 17.4% 0.0% -1.5% 0.0% -0.2% 0.0% 15.7%
Shares outstanding(11) 36,142,305 - - (908,062) - - 291,557 35,525,800 -1.7%
Net asset value per share, GEL 106.73 18.56 0.00 1.17 0.00 (0.25) (0.59) 125.63 17.7%
NAV per share, GEL change % 17.4% 0.0% 1.1% 0.0% -0.2% -0.6% 17.7%
NAV per share (GEL) was up 17.7% q-o-q in 2Q25, reflecting a GEL 670.9 million
value creation across our portfolio companies with a positive 17.4 ppts impact
and share buybacks (+1.1 ppts impact). The NAV per share (GEL) growth was
slightly offset by management platform-related costs and net interest expense
(-0.4 ppts impact in total).
Portfolio overview
Total portfolio value amounted to GEL 4.5 billion in 2Q25, up by GEL 431.7
million (up 10.5%) q-o-q:
· The value of the listed and observable portfolio increased by GEL
365.8 million (up 19.7%) in 2Q25. This reflects the net impact of a) the
continued growth in Lion Finance Group's share price and b) a GEL 188.0
million decrease related to the exercise of the put option on GCAP's 20%
minority stake, with transaction proceeds of US$ 70.4 million (GEL 191.7
million) recorded as a receivable as of 30-Jun-25, as presented in the NAV
statement above.
· The value of the private portfolio increased by GEL 65.8 million
(up 2.9%), mainly resulting from a) GEL 80.4 million value creation, b)
investments of GEL 1.0 million and c) a decrease of GEL 16.8 million due to
dividends paid to GCAP.
Consequently, as of 30-Jun-25, the private portfolio value amounted to GEL 2.3
billion (51.1% of the total), and the listed portfolio value totalled GEL 2.2
billion (48.9% of the total portfolio value).
1) Value creation
· Value creation from the listed and observable portfolio amounted
to GEL 590.5 million in 2Q25, primarily driven by:
o GEL 586.8 million value creation in Lion Finance Group, reflecting a
combination of a 29.7% increase in its share price and a 4.4% appreciation of
GBP against GEL in 2Q25.
o GEL 3.7 million value creation in the water utility business.
· Value creation across our private portfolio companies amounted to
GEL 80.4 million in 2Q25, reflecting:
o GEL 91.6 million value creation from our private large portfolio
companies, which delivered substantial growth in aggregated revenues (up 14.4%
y-o-y) and EBITDA (up 28.9% y-o-y) in 2Q25, translating into a GEL 113.5
million operating performance-related value creation. This was partially
offset by a GEL 21.9 million negative net impact from changes in implied
valuation multiples and FX rates.
o GEL 11.2 million negative value creation from our emerging and other
businesses.
As a result, the total portfolio value creation amounted to GEL 670.9 million
in 2Q25.
The table below summarises value creation drivers in our businesses in 2Q25:
Portfolio Businesses Operating Performance(( 12 (#_ftn12) )) Multiple Change Value Creation
and FX(( 13 (#_ftn13) ))
GEL '000, unless otherwise noted (unaudited) (1) (2) (1)+(2)
Listed and observable portfolio 590,501
Lion Finance Group 586,757
Water utility 3,744
Private portfolio 221,978 (141,613) 80,365
Large portfolio companies 113,471 (21,898) 91,573
Retail (pharmacy) 35,201 6,765 41,966
Insurance (P&C and medical) 28,057 1,273 29,330
Healthcare services 50,213 (29,936) 20,277
Emerging and other businesses 108,507 (119,715) (11,208)
Total portfolio 221,978 (141,613) 670,866
Valuation overview 14 (#_ftn14)
In 2Q25, valuation assessments of our retail (pharmacy), insurance, healthcare
services, renewable energy, and education businesses were performed by a
third-party independent valuation firm Kroll, in line with International
Private Equity Valuation ("IPEV") guidelines, as part of the semi-annual
independent valuation cycle for these businesses. The independent valuation
assessments, which serve as an input for Georgia Capital's estimate of fair
value, were performed by applying an income approach (DCF), cross-checked with
market approach (listed peer multiples and, in some cases, precedent
transactions). 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 2Q25 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.235 million, or 5%,
change in the fair value of equity investments.
The enterprise value ("EV") and equity value development of our businesses in
2Q25 is summarised in the following table:
Enterprise Value (EV) Equity Value
GEL '000, unless otherwise noted (Unaudited) 30-Jun-25 31-Mar-25 Change % 30-Jun-25 31-Mar-25 Change % % share in total portfolio
Listed and observable portfolio 2,222,825 1,856,984 19.7% 48.9%
Lion Finance Group 2,222,825 1,668,984 33.2% 48.9%
Water utility - 188,000 NMF 0.0%
Private portfolio 3,448,533 3,371,214 2.3% 2,319,427 2,253,609 2.9% 51.1%
Large portfolio companies 2,500,000 2,393,949 4.4% 1,763,134 1,687,399 4.5% 38.8%
Retail (pharmacy) 1,109,500 1,067,124 4.0% 815,581 783,008 4.2% 18.0%
Insurance (P&C and medical) 506,000 482,111 5.0% 463,669 441,055 5.1% 10.2%
Healthcare services 884,500 844,714 4.7% 483,884 463,336 4.4% 10.7%
Emerging and other businesses 948,533 977,265 -2.9% 556,293 566,210 -1.8% 12.2%
Total portfolio 4,542,252 4,110,593 10.5% 100.0%
Private large portfolio companies (38.8% of total portfolio value)
Retail (Pharmacy) (18.0% of total portfolio value) - The EV of Retail
(Pharmacy) was up by 4.0% to GEL 1,109.5 million in 2Q25, reflecting the
strong operating performance of the business. Retail revenues increased by
6.4% y-o-y in 2Q25, reflecting successful sales initiatives that drove 6.6%
same-store revenue growth and a 10.3% increase in average bill size. The
performance was further boosted by the addition of 14 new pharmacy stores in
2Q25. Wholesale revenues were up by 13.9% y-o-y in 2Q25 on the back of higher
revenues from state healthcare programmes, contributing to an 8.0% y-o-y
increase in the total revenue of the business. Gross profit margin improved by
2.2 ppts y-o-y to 32.7% in 2Q25, further supported by the positive outcome of
improved trading terms with key suppliers across all major categories and
overall shift in the sales mix towards higher-margin non-prescription
medicines. Operating expenses (excl. IFRS 16) were up 11.9% y-o-y in 2Q25,
primarily driven by higher salary expenses associated with business growth.
Consequently, the 2Q25 EBITDA (excl. IFRS 16) increased by 24.6% y-o-y to GEL
24.4 million. See page 11 for details. LTM EBITDA (incl. IFRS 16) was up 3.4%
to GEL 134.6 million in 2Q25. Net debt (incl. IFRS 16) increased by 3.3% to
GEL 286.4 million as at 30-Jun-25, mainly resulting from a GEL 10.0 million
dividend payment to GCAP in 2Q25. As a result, the fair value of GCAP's 98.0%
holding increased by 4.2% to GEL 815.6 million in 2Q25. The implied LTM
EV/EBITDA valuation multiple (incl. IFRS 16) remained unchanged q-o-q at 8.2x
as of 30-Jun-25 (down from 8.8x y-o-y as of 30-Jun-24).
Insurance (P&C and Medical) (10.2% of total portfolio value) - The
insurance business combines: a) P&C Insurance and b) Medical Insurance.
P&C Insurance revenues were up 21.6% y-o-y to GEL 44.2 million in 2Q25,
driven by growth in the motor and credit life insurance lines. The revenue of
the medical insurance business increased by 31.6% y-o-y and amounted to GEL
52.8 million in 2Q25, reflecting organic portfolio growth, a mid-teen
percentage increase in insurance policy prices and the positive impact of the
acquisition of the Ardi insurance portfolio in April 2024. The combined ratio
for P&C insurance improved by 4.0 ppts y-o-y in 2Q25, mainly reflecting
the positive outcome of revised price segmentation initiatives. The combined
ratio for medical insurance increased by 2.2 ppts y-o-y in 2Q25, reflecting
the low base related to the acquisition of Ardi, as the comparative 2024
figures only partially account for Ardi's claims activity. Adjusted for the
acquisition impact, the combined ratio of medical insurance was broadly
stable, up 1.0 ppts y-o-y in 2Q25. As a result, the pre-tax profit of the
combined insurance business increased by 17.5% y-o-y to GEL 13.4 million in
2Q25. See page 12 for details. The equity value of the business was up 5.1%
q-o-q to GEL 463.7 million in 2Q25. The implied LTM P/E valuation multiple 15
(#_ftn15) stood at 9.8x as of 30-Jun-25 (9.8x as of 31-Mar-25 and 9.7x as of
31-Dec-24). This valuation assessment also incorporates the first-time
revaluation of Ardi using the market approach, which had previously been
carried at the price of recent investment. The insurance business is also
subject to ongoing litigation, as further detailed on page 23.
Healthcare services (10.7% of total portfolio value) - Healthcare services EV
increased by 4.7% to GEL 884.5 million in 2Q25, resulting from the strong
operating performance of the business. Total revenue increased by 18.0% y-o-y
in 2Q25, reflecting a) increased demand for high revenue-generating outpatient
services at our large and specialty hospitals, b) optimisation of the
facilities and significant improvement in sales mix at our regional and
community hospitals, and c) robust performance of the clinics and diagnostics
business, driven by a growing customer base in alignment with enhanced service
offerings. Operating expenses (excl. IFRS 16) were up by 17.4% y-o-y in 2Q25,
primarily due to higher salary and rent expenses associated with the business
expansion. This translated into 36.4% y-o-y EBITDA (excl. IFRS 16) growth in
2Q25. See page 14 for details. Consequently, LTM EBITDA (incl. IFRS 16) was up
by 8.9% to GEL 89.4 million in 2Q25. Net debt (incl. IFRS 16) increased by
3.7% q-o-q to GEL 361.5 million as at 30-Jun-25, reflecting capex investments
for expansion of service offerings and upgrading the medical equipment
primarily in the outpatient direction. As a result, the equity value of the
healthcare services business was assessed at GEL 483.9 million in 2Q25 (up
4.4% q-o-q), translating into an implied LTM EV/EBITDA multiple (incl. IFRS
16) of 9.9x at 30-Jun-25, down from 10.3x at 31-Mar-25 (down from 11.6x at
30-Jun-24).
Emerging and other businesses (12.2% of total portfolio value) - Of the
emerging and other private portfolio businesses, renewable energy, education
and auto service are valued based on LTM EV/EBITDA. Wine, housing development
and hospitality businesses are valued based on DCF. Following the disposal of
an 80% stake in the beer and distribution business, its remaining value is
assessed using the put option valuation, reflecting GCAP's clear exit path
through a put and call structure at pre-agreed EBITDA multiples. The portfolio
value of emerging and other businesses decreased by 1.8% to GEL 556.3 million
in 2Q25, mainly reflecting GEL 11.2 million negative value creation. See
performance highlights of these businesses on page 16.
Listed portfolio (48.9% of total portfolio value)
Lion Finance Group (48.9% of total portfolio value) - In 1Q25, Lion Finance
Group delivered an annualised ROAE of 28.7% and a q-o-q loan book growth of
2.3% in Georgia and 1.3% in Armenia on a constant currency basis. In 2Q25, the
market value of GCAP's equity stake in Lion Finance Group increased by 33.2%
to GEL 2.2 billion, reflecting a combination of a 29.7% increase in LFG's
share price, a 4.4% appreciation of GBP against GEL, and the collection of GEL
32.9 million in buyback dividends during the quarter. The LTM P/E valuation
multiple was at 5.9x as of 30-Jun-25 (4.4x as of 31-Mar-25). Subsequent to
2Q25, GCAP collected GEL 47.2 million final cash from the LFG. Lion Finance
Group's public announcement of their 2Q25 results, when published, will be
available on Lion Finance Group's website
(https://bankofgeorgiagroup.com/results/earnings) .
2) Investments 16 (#_ftn16)
In 2Q25, GCAP invested GEL 1.0 million in the education business.
3) Share buybacks
During 2Q25, 908,062 shares with a total value of US$ 20.3 million (GEL 56.0
million) were bought back under GCAP's share buyback and cancellation
programme. Subsequent to 2Q25, additional 385,000 shares with a value of US$
10.8 million (GEL 29.4 million) have been repurchased under the ongoing share
buyback programme as at 5 August 2025.
4) Dividends
In 2Q25, GCAP recorded GEL 49.7 million dividend income from its portfolio
companies:
· GEL 32.9 million was received from participation in Lion Finance
Group's buyback programme.
· GEL 10.0 million dividend was collected from the retail
(pharmacy) business.
· GEL 6.8 million dividend was received from the insurance
business, of which GEL 5.3 million was collected from P&C insurance and
GEL 1.5 million from medical insurance.
1H25 NAV STATEMENT HIGHLIGHTS
GEL '000, unless otherwise noted Dec-24 1. Value creation(( 17 (#_ftn17) )) 2a. 2b. 2c. Dividends 3. Operating expenses 4. Liquidity/ FX/Other Jun-25 Change
(Unaudited) Investment and Divestments Buyback %
Total listed and observable portfolio value 1,609,035 838,450 (191,744) - (32,916) - - 2,222,825 38.1%
Listed and observable portfolio value change % 52.1% -11.9% 0.0% -2.0% 0.0% 0.0% 38.1%
Total private portfolio companies 2,152,455 175,910 12,692 - (24,789) - 3,159 2,319,427 7.8%
of which, large portfolio companies 1,557,951 227,126 - - (23,816) - 1,873 1,763,134 13.2%
of which, emerging and other companies 594,504 (51,216) 12,692 - (973) - 1,286 556,293 -6.4%
Private portfolio value change % 8.2% 0.6% 0.0% -1.2% 0.0% 0.1% 7.8%
Total portfolio value 3,761,490 1,014,360 (179,052) - (57,705) - 3,159 4,542,252 20.8%
Total portfolio value change % 27.0% -4.8% 0.0% -1.5% 0.0% 0.1% 20.8%
Net debt (154,425) - 179,052 (143,229) 57,705 (11,340) (4,640) (76,877) -50.2%
Net asset value 3,609,013 1,014,360 - (143,845) - (18,980) 2,663 4,463,211 23.7%
NAV change % 28.1% 0.0% -4.0% 0.0% -0.5% 0.1% 23.7%
Shares outstanding(17) 37,612,488 - - (2,776,848) - - 690,160 35,525,800 -5.5%
Net asset value per share, GEL 95.95 26.97 0.00 3.52 0.00 (0.50) (0.32) 125.63 30.9%
NAV per share, GEL change % 28.1% 0.0% 3.7% 0.0% -0.5% -0.3% 30.9%
NAV per share (GEL) was up 30.9% in 1H25, mainly reflecting a GEL 1.0 billion
value creation across our portfolio companies with a positive 28.1 ppts impact
and share buybacks (+3.7 ppts impact). The NAV per share (GEL) growth was
slightly offset by management platform-related costs and net interest expense
(-0.9 ppts impact in total).
Portfolio overview
The portfolio value increased by GEL 780.8 million (up 20.8%) in 1H25:
· The value of the listed and observable portfolio increased by GEL
613.8 million (up 38.1%), reflecting the net impact of the strong performance
of Lion Finance Group's share price and the exercise of the put option on
GCAP's 20% minority stake in the water utility business, as detailed above.
· The value of the private portfolio increased by GEL 167.0 million
(up 7.8%), mainly resulting from a) GEL 175.9 million value creation, b)
investments of GEL 12.7 million and c) a decrease of GEL 24.8 million due to
dividends paid to GCAP.
Value creation
Total portfolio value creation amounted to GEL 1.0 billion in 1H25.
· A 50.3% increase in Lion Finance Group's share price, supported
by a 5.7% appreciation of GBP against GEL in 1H25, led to a GEL 834.7 million
value creation
· Value creation across our private portfolio companies amounted to
GEL 175.9 million in 1H25, reflecting:
o GEL 346.4 million operating performance-related increase in the value of
our private assets.
o GEL 170.5 million negative net impact from changes in implied valuation
multiples and FX rates.
As a result, the total portfolio value creation amounted to GEL 1.0 billion in
1H25.
The table below summarises value creation drivers in our businesses in 1H25:
Portfolio Businesses Operating Performance(( 18 (#_ftn18) )) Multiple Change Value Creation
and FX(( 19 (#_ftn19) ))
GEL '000, unless otherwise noted (unaudited) (1) (2) (1)+(2)
Listed and observable portfolio 838,450
Lion Finance Group 834,706
Water utility 3,744
Private portfolio 346,387 (170,477) 175,910
Large portfolio companies 284,864 (57,738) 227,126
Retail (pharmacy) 133,009 (24,724) 108,285
Insurance (P&C and medical) 44,947 4,426 49,373
Healthcare services 106,908 (37,440) 69,468
Emerging and other businesses 61,523 (112,739) (51,216)
Total portfolio 346,387 (170,477) 1,014,360
The enterprise value ("EV") and equity value development of our businesses in
1H25 is summarised in the following table:
Enterprise Value (EV) Equity Value
GEL '000, unless otherwise noted (Unaudited) 30-Jun-25 31-Dec-24 Change % 30-Jun-25 31-Dec-24 Change % % share in total portfolio
Listed and observable portfolio 2,222,825 1,609,035 38.1% 48.9%
Lion Finance Group 2,222,825 1,421,035 56.4% 48.9%
Water utility - 188,000 NMF 0.0%
Private portfolio 3,448,533 3,287,665 4.9% 2,319,427 2,152,455 7.8% 51.1%
Large portfolio companies 2,500,000 2,262,744 10.5% 1,763,134 1,557,951 13.2% 38.8%
Retail (pharmacy) 1,109,500 1,021,000 8.7% 815,581 716,130 13.9% 18.0%
Insurance (P&C and medical) 506,000 463,144 9.3% 463,669 427,945 8.3% 10.2%
Healthcare services 884,500 778,600 13.6% 483,884 413,876 16.9% 10.7%
Emerging and other businesses 948,533 1,024,921 -7.5% 556,293 594,504 -6.4% 12.2%
Total portfolio 4,542,252 3,761,490 20.8% 100.0%
2) Investments 20 (#_ftn20)
In 1H25, GCAP invested GEL 12.7 million in its private portfolio companies,
including GEL 7.9 million in the education business and GEL 4.4 million in the
renewable energy business.
3) Share buybacks
During 1H25, 2,776,848 shares were bought back for a total consideration of
GEL 143.8 million.
· 2,645,394 shares with a total value of US$ 49.0 million (GEL
137.1 million) were bought back under GCAP's share buyback and cancellation
programme.
· 131,454 shares (GEL 6.7 million in value) represent the
tax-related statutory buyback for the management trust, where the average cost
of unawarded shares is GBP 8.6 as of 30 June 2025.
4) Dividends
In 1H25, GCAP recorded GEL 57.7 million dividend income from its portfolio
companies:
· GEL 32.9 million was received from participation in Lion Finance
Group's buyback programme
· GEL 13.9 million dividend was received from the insurance
business, of which GEL 11.1 million was collected from P&C insurance and
GEL 2.8 million from medical insurance.
· GEL 10.0 million dividend was collected from the retail
(pharmacy) business.
· GEL 1.0 million dividend was collected from the auto service
business.
Net Capital Commitment (NCC) overview
Below we describe the components of Net Capital Commitment (NCC) as of 30 June
2025, 31 March 2025 and 31 December 2024. 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 30-Jun-25 31-Mar-25 Change 31-Dec-24 Change
GEL '000, unless otherwise noted (unaudited)
Total cash and liquid funds 150,748 161,853 -6.9% 278,237 -45.8%
Loans 513 - NMF - NMF
(file:///C%3A/Users/AnanoAkhobadze/AppData/Local/Microsoft/Windows/INetCache/Content.MSO/DFF638F8.xlsx#RANGE!_ftn1)
issued
Receivable on put option exercise 191,744 - NMF - NMF
Gross debt (419,882) (417,681) 0.5% (432,662) -3.0%
Net debt (1) (76,877) (255,828) -69.9% (154,425) -50.2%
Guarantees issued (2) - - NMF - NMF
Net debt and guarantees issued (3)=(1)+(2) (76,877) (255,828) -69.9% (154,425) -50.2%
Planned investments (4) (102,864) (105,516) -2.5% (118,480) -13.2%
of which, planned investments in renewable energy (63,098) (64,110) -1.6% (69,518) -9.2%
of which, planned investments in education (39,766) (41,406) -4.0% (48,962) -18.8%
Announced buybacks (5) (187) (56,363) -99.7% (67,421) -99.7%
Contingency/liquidity buffer (6) (136,180) (138,365) -1.6% (140,340) -3.0%
Total planned investments, announced buybacks and contingency/liquidity buffer (239,231) (300,244) -20.3% (326,241) -26.7%
(7)=(4)+(5)+(6)
Net capital commitment (3)+(7) (316,108) (556,072) -43.2% (480,666) -34.2%
Portfolio value 4,542,252 4,110,593 10.5% 3,761,490 20.8%
NCC ratio 7.0% 13.5% -6.5 ppts 12.8% -5.8 ppts
Cash and liquid funds. Total cash and liquid funds' balance decreased by 6.9%
q-o-q to GEL 150.7 million in 2Q25 (down 45.8% in 1H25), mainly reflecting
cash outflows for share buybacks during the quarter, partially offset by the
collection of dividends as described above.
Loans issued. Issued loans' balance primarily refers to loans issued to our
private portfolio companies and are lent at market terms. The balance was up
by GEL 0.5 million in 2Q25, reflecting a new loan issued to our auto service
business during the quarter.
Receivable on put option exercise. The balance as at 30-Jun-25 reflects US$
70.4 million (GEL 191.7 million) proceeds related to the exercise of the put
option on GCAP's 20% stake in the water utility business. These proceeds were
collected on 29 July 2025.
Gross debt. In US$ terms, the balance was up 2.1% q-o-q in 2Q25, reflecting
the interest accrual on the US$ 150 million sustainability-linked bonds. In
GEL terms, the balance remained largely flat, up 0.5% in 2Q25, further
reflecting the foreign exchange rate movements during the quarter. The gross
debt balance in US$ terms remained flat in 1H25 and was down by 3.0% in GEL
terms, primarily driven by GEL's appreciation against US$ in 1H25.
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 0.9% and 10.5% in 2Q25 and 1H25,
respectively, reflecting cash outflows for the investment projects as
described above.
Announced buybacks. The balance of the announced buybacks at 30-Jun-25
reflects the unutilised share buybacks under GCAP's then ongoing US$ 50
million share buyback and cancellation programme, which was increased to US$
68 million in July 2025. The new US$ 50 million share buyback and cancellation
programme planned to be announced later in August 2025 will be reflected in
the 3Q25 NCC table.
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 30-Jun-25.
As a result of the movements outlined above, the NCC ratio improved by 6.5
ppts q-o-q to 7.0% as of 30 June 2025 (5.8 ppts improvement in 1H25).
INCOME STATEMENT (ADJUSTED IFRS/APM)
Net income under IFRS was GEL 661.5 million in 2Q25 (GEL 477.6 million net
loss in 2Q24) and GEL 991.7 million in 1H25 (GEL 192.3 million net loss in
1H24). 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 June 30 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 2024 Annual report.
INCOME STATEMENT (Adjusted IFRS/APM)
GEL '000, unless otherwise noted (unaudited) 2Q25 2Q24 Change 1H25 1H24 Change
Dividend income 49,697 36,507 36.1% 57,705 50,307 14.7%
Interest income 1,847 1,681 9.9% 4,637 3,320 39.7%
Realised/unrealised gain/(loss) on liquid funds 23 (409) NMF 73 (961) NMF
Interest expense (8,922) (8,970) -0.5% (18,026) (17,579) 2.5%
Gross operating income 42,645 28,809 48.0% 44,389 35,087 26.5%
Operating expenses (9,195) (9,332) -1.5% (18,979) (18,672) 1.6%
GCAP net operating income 33,450 19,477 71.7% 25,410 16,415 54.8%
Fair value changes of portfolio companies
Listed and observable portfolio companies 557,585 (280,238) NMF 805,534 39,967 NMF
of which, Lion Finance Group PLC 553,841 (273,238) NMF 801,790 43,967 NMF
of which, Water utility 3,744 (7,000) NMF 3,744 (4,000) NMF
Private portfolio companies 63,584 (203,791) NMF 151,121 (230,852) NMF
Large portfolio companies 74,792 (148,344) NMF 203,310 (189,573) NMF
of which, retail (pharmacy) 32,006 (75,400) NMF 98,325 (95,399) NMF
of which, insurance (P&C and medical) 22,509 13,491 66.8% 35,517 12,968 NMF
of which, healthcare services 20,277 (86,435) NMF 69,468 (107,142) NMF
Emerging and other businesses (11,208) (55,447) -79.8% (52,189) (41,279) 26.4%
Total investment return 621,169 (484,029) NMF 956,655 (190,885) NMF
Income/(loss) before foreign exchange rate movements and non-recurring 654,619 (464,552) NMF 982,065 (174,470) NMF
expenses
Net foreign currency gain/(loss)/impairment 4,418 (18,162) NMF 11,431 (19,320) NMF
Non-recurring expenses (4,491) (346) NMF (4,749) (1,668) NMF
Net income/(loss) 654,546 (483,060) NMF 988,747 (195,458) NMF
The gross operating income stood at GEL 42.6 million in 2Q25, up 48.0% y-o-y
(up 26.5% y-o-y in 1H25), reflecting robust dividend income during the period.
GCAP Operating Expenses Components
GEL '000, unless otherwise noted (unaudited) 2Q25 2Q24 Change 1H25 1H24 Change
Administrative expenses(( 21 (#_ftn21) )) (3,225) (2,897) 11.3% (6,004) (5,757) 4.3%
Management expenses - cash-based(( 22 (#_ftn22) )) (2,596) (3,028) -14.3% (5,335) (5,828) -8.5%
Management expenses - share-based(( 23 (#_ftn23) )) (3,374) (3,407) -1.0% (7,640) (7,087) 7.8%
Total operating expenses (9,195) (9,332) -1.5% (18,979) (18,672) 1.6%
of which, fund type expense(( 24 (#_ftn24) )) (2,280) (2,287) -0.3% (4,509) (4,788) -5.8%
of which, management fee type expenses(( 25 (#_ftn25) )) (6,915) (7,045) -1.8% (14,470) (13,884) 4.2%
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 0.64%
at 30-Jun-25 (0.85% as of 30-Jun-24).
Total investment return represents the increase (decrease) in the fair value
of our portfolio. Total investment return was GEL 621.2 million in 2Q25 and
GEL 956.7 million in 1H25, reflecting the changes in the value of our
portfolio companies. We discuss valuation drivers for our businesses on pages
5-6. The performance of each of our private large portfolio companies is
discussed on pages 11-15.
As a result of the movements described above, GCAP's adjusted IFRS net income
was GEL 654.5 million in 2Q25 and GEL 988.7 million in 1H25.
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, where the
2Q25, 1H25, 2Q24 and 1H24 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 investments is determined using an income approach (DCF),
cross-checked with 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 18 for more background.
Discussion of Retail (Pharmacy) Business Results
The retail (pharmacy) business, where GCAP owns a 98.0% 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 Pharmadepot) and a wholesale business that sells pharmaceuticals and
medical supplies to hospitals and other pharmacies. The business operates a
total of 430 pharmacies (of which 415 are in Georgia and 15 in Armenia) and 19
franchise stores (of which, 12 are in Georgia, 2 in Armenia and 5 in
Azerbaijan).
2Q25 and 1H25 performance (GEL '000), Retail (pharmacy)(( 26 (#_ftn26) ))
INCOME STATEMENT HIGHLIGHTS 2Q25 2Q24 Change 1H25 1H24 Change
Revenue, net 224,007 207,419 8.0% 449,631 411,130 9.4%
of which, retail 173,765 163,307 6.4% 349,116 331,252 5.4%
of which, wholesale 50,242 44,112 13.9% 100,515 79,878 25.8%
Gross Profit 73,313 63,286 15.8% 146,202 123,101 18.8%
Gross profit margin 32.7% 30.5% 2.2 ppts 32.5% 29.9% 2.6 ppts
Operating expenses (ex. IFRS 16) (48,962) (43,746) 11.9% (97,676) (88,019) 11.0%
EBITDA (excl. IFRS 16) 24,351 19,540 24.6% 48,526 35,082 38.3%
EBITDA margin (ex. IFRS 16) 10.9% 9.4% 1.5 ppts 10.8% 8.5% 2.3 ppts
Net profit (excl. IFRS 16) 14,163 4,444 NMF 30,973 11,194 NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16) 15,527 14,563 6.6% 43,333 34,127 27.0%
EBITDA to cash conversion 63.8% 74.5% -10.7 ppts 89.3% 97.3% -8.0 ppts
Cash flow used in investing activities(( 27 (#_ftn27) )) (6,390) (19,512) -67.3% (10,042) (24,739) -59.4%
Free cash flow (ex. IFRS 16)(( 28 (#_ftn28) )) 8,988 8,751 2.7% 32,980 22,074 49.4%
Cash flow used in financing activities (ex. IFRS 16) (23,068) (20,486) 12.6% (20,546) (45,995) -55.3%
BALANCE SHEET HIGHLIGHTS 30-Jun-25 31-Mar-25 Change 31-Dec-24 Change
Total assets 641,499 625,578 2.5% 608,576 5.4%
of which, cash and bank deposits 32,341 45,890 -29.5% 19,154 68.8%
of which, securities and loans issued 16,781 18,080 -7.2% 19,087 -12.1%
Total liabilities 531,717 520,400 2.2% 521,341 2.0%
of which, borrowings 178,645 187,768 -4.9% 181,833 -1.8%
of which, lease liabilities 151,896 148,388 2.4% 149,348 1.7%
Total equity 109,782 105,178 4.4% 87,235 25.8%
INCOME STATEMENT HIGHLIGHTS
Ø Y-o-y growth in retail revenues in 2Q25 and 1H25 reflects the business's
proactive approach to sales enhancement, resulting in a 6.6% same-store
revenue growth in 2Q25 (4.7% in 1H25) and a 10.3% y-o-y increase in average
bill size in 2Q25 (up 10.0% y-o-y in 1H25). Retail revenue growth was further
supported by the recent expansion of the retail chain (14 new pharmacy stores
added in 2Q25).
Ø Y-o-y growth in wholesale revenues in 2Q25 and 1H25 was primarily driven by
higher revenue from state healthcare programmes.
Ø Gross profit margin improvement in 2Q25 and 1H25 was underpinned by
improved trading terms with key suppliers across all major categories, as well
as a shift in the sales mix toward higher-margin non-prescription medicines.
Ø The y-o-y increase in operating expenses (excl. IFRS 16) in 2Q25 and 1H25
was mainly driven by higher salary costs, up 18.4% and 15.5% y-o-y in 2Q25 and
1H25, respectively. This reflects increased staff compensation aligned with
market trends, the introduction of new sales incentive schemes aimed at
enhancing overall gross profit margin, and the continued growth of the
business.
Ø As a result, the business achieved y-o-y EBITDA growth (excl. IFRS 16) of
24.6% in 2Q25 (up 38.3% in 1H25), with an EBITDA margin of 10.9% in 2Q25
(10.8% in 1H25).
Ø Net interest expense (excl. IFRS 16) was down by 37.5% y-o-y in 2Q25 (down
30.8% y-o-y in 1H25), reflecting lower average net debt balance.
Ø The developments described above translated into a GEL 9.7 million y-o-y
increase in net profit (excl. IFRS 16) in 2Q25 (up by GEL 19.8 million y-o-y
in 1H25).
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø The net debt balance was GEL 129.5 million as of 30-Jun-25, up 4.6% from
31-Mar-25 and down 9.8% from 31-Dec-24, reflecting the net impact of a GEL
10.0 million dividend payment to GCAP in 2Q25 and robust cash flow generation
throughout 1H25. As a result, the net debt to EBITDA 29 (#_ftn29) leverage
ratio improved to 1.4x as at 30-Jun-25 (down from 1.5x as at 31-Mar-25 and
down from 1.9x as at 31-Dec-24).
Ø The EBITDA to cash conversion stood at 63.8% and 89.3% in 2Q25 and 1H25,
respectively, reflecting the strong business performance outlined above, as
well as timing differences in the collection of receivables.
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø In 2Q25, the retail pharmacy chain expanded by 14 stores, with openings
focused on strategically selected locations. The new stores were developed
using cost-efficient formats, requiring limited capital investments. The
detailed breakdown of pharmacies and franchise stores is provided below:
Jun-25 Mar-25 Change (q-o-q) Jun-24 Change (y-o-y)
Number of pharmacies 430 416 14 418 12
of which, Georgia 415 401 14 402 13
of which, Armenia 15 15 - 16 (1)
Number of franchise stores 19 19 - 22 (3)
of which, Georgia 12 12 - 14 (2)
of which, Armenia 2 2 - 2 -
of which, Azerbaijan 5 5 - 6 (1)
Ø Retail (Pharmacy)'s key operating performance highlights for 2Q25 and 1H25
are noted below:
Key metrics 2Q25 2Q24 Change 1H25 1H24 Change
Same store revenue growth 6.6% -5.9% 12.4ppts 4.7% -2.6% 7.3ppts
Number of bills issued (million) 7.5 7.8 -3.7% 15.2 15.9 -4.5%
Average bill size (GEL) 21.8 19.7 10.3% 21.7 19.7 10.0%
Discussion of insurance (P&C and medical) business results
As at 30-Jun-25, 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 25% market share in property and casualty insurance based on
gross premiums as of 31-Mar-25. 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 33% market share based
on gross insurance premiums as of 31-Mar-25, offering a variety of health
insurance products primarily to corporate and (selectively) to state entities
and to retail clients in Georgia. GCAP owns a 100% equity stake in both
insurance businesses.
2Q25 and 1H25 performance (GEL'000), insurance (P&C and medical)(( 30
(#_ftn30) ))
INCOME STATEMENT HIGHLIGHTS 2Q25 2Q24 Change 1H25 1H24 Change
Insurance revenue 96,960 76,434 26.9% 186,622 131,426 42.0%
of which, P&C insurance 44,161 36,304 21.6% 82,272 67,801 21.3%
of which, medical insurance 52,799 40,130 31.6% 104,350 63,625 64.0%
Net underwriting profit 24,684 19,261 28.2% 44,772 33,480 33.7%
Net investment profit 4,072 4,216 -3.4% 8,269 7,538 9.7%
Pre-tax profit 13,395 11,400 17.5% 22,218 19,170 15.9%
of which, P&C insurance 8,944 7,034 27.2% 16,027 13,337 20.2%
of which, medical insurance 4,451 4,366 1.9% 6,191 5,833 6.1%
CASH FLOW HIGHLIGHTS
Net cash flows from operating activities 18,571 16,154 15.0% 22,163 23,771 -6.8%
Free cash flow 15,125 17,721 -14.6% 15,850 24,020 -34.0 %
BALANCE SHEET HIGHLIGHTS 30-Jun-25 31-Mar-25 Change 31-Dec-24 Change
Total assets 379,438 359,063 5.7% 300,510 26.3%
Total equity 136,747 129,986 5.2% 128,614 6.3%
INCOME STATEMENT HIGHLIGHTS
Ø The y-o-y increase in 2Q25 and 1H25 insurance revenue reflects a
combination of factors:
§ The revenue of the P&C insurance business was up by 21.6% y-o-y in
2Q25 (up 21.3% y-o-y in 1H25), resulting from:
o A GEL 4.3 million y-o-y increase in Motor Insurance revenues in 2Q25 (GEL
8.6 million y-o-y increase in 1H25), mainly attributable to the expansion of
the retail client portfolio.
o A GEL 1.6 million y-o-y increase in Credit Life Insurance revenues in 2Q25
(GEL 3.1 million y-o-y increase in 1H25), driven by the growth of partner
banks' portfolios in the mortgage, consumer loan, and other sectors.
o A GEL 2.0 million y-o-y increase in 2Q25 (GEL 2.8 million y-o-y increase
in 1H25) in the revenues from other insurance lines.
§ The revenue of the medical insurance business was up by 31.6% y-o-y in
2Q25 (up 64.0% y-o-y in 1H25), reflecting organic growth of the portfolio, a
mid-teen percentage increase in insurance policy prices, and the positive
impact of the acquisition of Ardi insurance portfolio in April 2024, the
latter contributing GEL 8.7 million y-o-y revenue growth in 2Q25 and GEL 31.1
million in 1H25.
Ø The insurance business' key performance ratios for 2Q25 and 1H25 are noted
below:
Key ratios P&C insurance Medical insurance
2Q25 2Q24 Change 1H25 1H24 Change 2Q25 2Q24 Change 1H25 1H24 Change
Combined ratio 84.5% 88.5% -4.0 ppts 86.0% 87.9% -1.9 ppts 93.3% 91.1% 2.2 ppts 95.8% 93.3% 2.5 ppts
Expense ratio 32.9% 33.6% -0.7 ppts 33.1% 33.6% -0.5 ppts 17.1% 15.8% 1.3 ppts 17.4% 15.9% 1.5 ppts
Loss ratio 50.8% 53.2% -2.4 ppts 52.9% 53.6% -0.7 ppts 76.2% 75.3% 0.9 ppts 78.4% 77.4% 1.0 ppts
FX ratio 0.7% 1.7% -1.0 ppts 0.1% 0.7% -0.6 ppts - - - - - -
ROAE(( 31 (#_ftn31) )) 36.0% 33.1% 2.9 ppts 32.4% 32.2% 0.2 ppts 50.1% 33.8% 16.3 ppts 35.7% 22.7% 13.0 ppts
Ø The combined ratio of the P&C insurance business improved by 4.0 ppts
y-o-y in 2Q25 (1.9 ppts y-o-y improvement in 1H25), primarily driven by an
improved loss ratio in the corporate motor insurance segment, reflecting the
impact of revised price segmentation initiatives. The performance was
partially subdued by an adverse movement in the property insurance loss ratio
due to two large claims, totalling GEL 2.0 million in 1H25, of which GEL 1.4
million was recorded in 2Q25.
Ø The 2.2 ppt y-o-y increase in the combined ratio of the medical insurance
business in 2Q25 (up 2.5 ppts in 1H25) reflects the low base related to the
acquisition of Ardi in April 2024, as the comparative 2024 figures only
partially account for Ardi's claims activity. Adjusted for the acquisition
impact, the combined ratio of medical insurance was broadly stable, up 1.0 ppt
y-o-y in both 2Q25 and 1H25.
Ø Net investment profit was down by 3.4% y-o-y in 2Q25 (up 9.7% y-o-y in
1H25), primarily attributable to the FX movements.
Ø As a result, the pre-tax profit of the insurance business was up 17.5% and
15.9% y-o-y in 2Q25 and 1H25, respectively.
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø The solvency ratio of P&C and medical insurance businesses stood at
170% and 161%, respectively, as of 30-Jun-25, significantly above the required
minimum of 100%.
Ø The net debt to EBITDA leverage ratio stood at 0.4x as at 30-Jun-25 (down
from 0.5x as at 31-Mar-25).
Ø The business distributed GEL 6.8 million dividends to GCAP in 2Q25 (GEL
13.9 million in 1H25).
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø In July 2025, a leading international credit rating agency upgraded the
credit rating of Aldagi to the investment grade level of "bbb- (Stable)" from
"bb+ (Positive)", marking the first time a Georgian insurance company has been
assigned an international investment-grade credit rating. The rating upgrade
reflects AM Best's view that Aldagi is well positioned to maintain resilient
balance sheet strength and sustain its strongest level of risk-adjusted
capitalisation, underpinned by prudent capital and underwriting management.
The detailed rating announcement is available on AM Best's website
(https://news.ambest.com/PR/PressContent.aspx?altsrc=10&RefNum=36194&URatingId=2970370&_gl=1*vysaz4*_ga*MTg0NTkyMTU4OC4xNzQ0Nzk5MjM3*_ga_VNWYD5N5NL*czE3NTIwNDkzOTAkbzgkZzEkdDE3NTIwNjg1NzMkajEyJGwwJGgw)
.
Discussion of healthcare services business results(( 32 (#_ftn32) ))
The healthcare services business, where GCAP owns 100% equity, is the largest
healthcare market participant in Georgia comprising two segments: 1) hospitals
(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), and 2) clinics and
diagnostics (16 polyclinics - providing outpatient diagnostic and treatment
services and diagnostics - operating the largest laboratory in the entire
Caucasus region "Mega Lab").
2Q25 and 1H25 performance (GEL '000), healthcare services 33 (#_ftn33)
INCOME STATEMENT HIGHLIGHTS 2Q25 2Q24 Change 1H25 1H24 Change
Revenue, net 34 (#_ftn34) 118,307 100,235 18.0% 233,588 196,908 18.6%
Gross Profit 46,569 36,858 26.3% 92,398 73,390 25.9%
Gross profit margin 38.8% 36.2% 2.6 ppts 39.1% 36.8% 2.3 ppts
Operating expenses (ex. IFRS 16) (22,901) (19,508) 17.4% (45,386) (40,132) 13.1%
EBITDA (ex. IFRS 16) 23,668 17,350 36.4% 47,012 33,258 41.4%
EBITDA margin (ex. IFRS 16) 19.7% 17.0% 2.7 ppts 19.9% 16.7% 3.2 ppts
Net income/(loss) (ex. IFRS 16) 261 (2,228) NMF 1,581 (4,469) NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16) 19,799 6,516 NMF 31,497 13,747 NMF
EBITDA to cash conversion (ex. IFRS 16) 83.7% 37.6% 46.1 ppts 67.0% 41.3% 25.7 ppts
Cash flow (used in)/from investing activities 35 (#_ftn35) (16,701) (14,936) 11.8% (27,970) 2,554 NMF
Free cash flow (ex. IFRS 16) 36 (#_ftn36) 2,839 (8,320) NMF 2,067 16,245 -87.3%
Cash flow (used in)/from financing activities (ex. IFRS 16) (15,650) 18,011 NMF (398) (12,871) -96.9%
BALANCE SHEET HIGHLIGHTS 30-Jun-25 31-Mar-25 Change 31-Dec-24 Change
Total assets 867,749 864,016 0.4% 828,101 4.8%
of which, cash balance and bank deposits 41,647 54,306 -23.3% 39,102 6.5%
of which, securities and loans issued 498 582 -14.4% 736 -32.3%
Total liabilities 478,406 473,213 1.1% 441,552 8.3%
of which, borrowings 366,637 367,344 -0.2% 341,367 7.4%
Total equity 389,343 390,803 -0.4% 386,549 0.7%
INCOME STATEMENT HIGHLIGHTS
Ø The hospitals and clinics and diagnostics businesses represent
approximately 80% and 20%, respectively, of the consolidated revenue of the
healthcare services business.
Total revenue breakdown(( 37 (#_ftn37) )) 2Q25 2Q24 Change 1H25 1H24 Change
Total revenue, net 118,307 100,235 18.0% 233,588 196,908 18.6%
of which, large and specialty hospitals 65,770 57,637 14.1% 128,054 111,509 14.8%
of which, regional and community hospitals 31,207 25,399 22.9% 63,679 52,643 21.0%
of which, clinics 18,580 15,187 22.3% 36,707 29,273 25.4%
of which, diagnostics 7,071 5,452 29.7% 13,743 10,830 26.9%
Ø The 18.0% y-o-y increase in total revenue in 2Q25 (up 18.6% y-o-y in 1H25)
reflects:
§ Increased demand for high revenue-generating outpatient services at our
large and specialty hospitals, accounting for 36.9% of the revenue from this
group of hospitals, a 3.7 ppts y-o-y increase in 2Q25 (up 3.1 ppts y-o-y to
36.3% in 1H25). This performance also benefited from the onboarding of
reputable doctors with loyal patient bases in 1H25.
§ Strong revenue growth at our regional and community hospitals,
underpinned by a favourable shift in the sales mix and enhanced operational
efficiencies, resulting in a 6.6 ppt and 8.7 ppt y-o-y increase in occupancy
rates in 2Q25 and 1H25, respectively.
§ Robust performance of clinics and diagnostics business on the back of the
favourable shift in sales mix and increased customer footprint resulting from
the overall service enhancements.
Ø In addition to the revenue developments outlined above, a 2.6 and 2.3 ppts
y-o-y increase in the gross profit margin in 2Q25 and 1H25, respectively,
reflects the following trends in direct salary and materials rates 38
(#_ftn38) and utility costs:
§ Approximately 50% of direct salaries are fixed. This, on the back of
increased revenues, led to a 1.2 ppts y-o-y improvement in the direct salary
rate of the healthcare services business to 38.8% in 2Q25 (1.1 ppts y-o-y
improvement in 1H25 to 38.3%).
§ The materials rate improved by 0.6 ppts y-o-y in 2Q25 and stood at 15.7%
(improved by 0.5 ppts y-o-y to 15.9% in 1H25).
§ The utilities and other expenses increased by 8.6% y-o-y in 2Q25 (up by
9.3% y-o-y in 1H25), mainly attributable to higher facility maintenance costs
related to post-renovation works in certain departments and the overall
expansion of the business.
Ø Operating expenses (excl. IFRS 16) were up by 17.4% and 13.1% y-o-y in 2Q25
and 1H25, respectively, reflecting increased salary and rent expenses in line
with the business expansion.
Ø The developments described above translated into a 36.4% and 41.4% y-o-y
increase in EBITDA (excl. IFRS 16) in 2Q25 and 1H25, respectively
Total EBITDA (excl. IFRS 16) breakdown 39 (#_ftn39) 2Q25 2Q24 Change 1H25 1H24 Change
Total EBITDA 23,668 17,350 36.4% 47,012 33,258 41.4%
of which, large and specialty hospitals 13,533 11,202 20.8% 25,620 20,293 26.3%
of which, regional and community hospitals 5,031 2,521 99.6% 11,062 5,769 91.7%
of which, clinics 3,897 2,910 33.9% 7,851 5,817 35.0%
of which, diagnostics 1,450 717 NMF 2,722 1,379 97.4%
Ø Net interest expense (excluding IFRS 16) was up 27.7% and 27.8% y-o-y in
2Q25 and 1H25, respectively, reflecting increased interest rates on the market
as well as increased net debt balance as outlined below.
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Ø The net debt balance was up by 9.0% y-o-y in 2Q25, reflecting capex
investments in the amount of GEL 31.5 million in 1H25 (GEL 26.5 million in
1H24). This includes a) development capex of GEL 18.2 million in 1H25 related
to an expansion of service offerings and upgrade of medical equipment
primarily for outpatient services, and b) maintenance capex of GEL 13.3
million.
Ø The EBITDA to cash conversion ratio improved to 83.7% in 2Q25, while the
1H25 ratio remained at 67.0%, reflecting delays in the collection of
receivables from the State, where the typical collection period ranges from
three to six months.
Ø The net debt to EBITDA leverage ratio improved to 3.9x as at 30-Jun-25,
down from 4.1x as at 31-Mar-25 and down from 4.3x as at 31-Dec-24.
OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS
Ø The business key operating performance highlights for 2Q25 are noted below:
Key metrics 2Q25 2Q24 Change 1H25 1H24 Change
Hospitals
Number of admissions (thousands): 394.8 381.4 3.5% 794.8 791.2 0.5%
of which, large and specialty hospitals 190.2 176.8 7.6% 378.2 349.1 8.3%
of which, regional and community hospitals 204.6 204.6 NMF 416.6 442.1 -5.8%
Occupancy rates:
of which, large and specialty hospitals 70.5% 69.6% 0.9 ppts 72.1% 67.5% 4.6 ppts
of which, regional and community hospitals 67.7% 61.1% 6.6 ppts 72.2% 63.5% 8.7 ppts
Clinics
Number of admissions (thousands): 484.8 437.4 10.8% 988.2 898.8 9.9%
Diagnostics
Number of patients served (thousands) 214 197 8.7% 444 418 6.2%
Average number of tests per patient 3.3 3.1 6.2% 3.2 3.0 4.8%
Discussion of emerging and other portfolio results
The five businesses in our "emerging and other" private portfolio are
renewable energy, education, auto service, wine and real estate (housing
development and hospitality). They had a combined value of GEL 556.3 million
at 30-Jun-25, which represents 12.2% of our total portfolio.
2Q25 and 1H25 aggregated performance highlights (GEL '000), emerging and other
portfolio 40 (#_ftn40)
2Q25 2Q24 Change 1H25 1H24 Change
Revenue 113,584 114,639 -0.9% 206,615 238,398 -13.3%
EBITDA 25,082 23,798 5.4% 45,537 47,764 -4.7%
Net cash flows from operating activities 22,480 20,584 9.2% 47,385 31,632 49.8%
Ø Renewable energy | The renewable energy business operates three
wholly-owned commissioned renewable assets with 71MW installed capacity in
aggregate. In addition, the business has a pipeline of renewable energy
projects in varying stages of development. Revenue of the business increased
by 4.8% y-o-y to US$ 5.1 million in 2Q25, primarily driven by a 4.4% y-o-y
increase in the average electricity selling price, which reached 55.6 US$/kwh
in 2Q25. The 1H25 revenue decreased by 1.0% y-o-y to US$ 7.5 million, mainly
reflecting a 2.8% y-o-y decline in the electricity generation due to
unfavourable weather conditions. Operating expenses were up by 23.0% and 13.1%
y-o-y in 2Q25 and 1H25, respectively, driven by higher electricity export
costs. As a result, the business posted US$ 3.7 million and US$ 5.1 million
EBITDA in 2Q25 and 1H25, respectively (down 0.9% and 6.3% y-o-y,
respectively).
Ø Education | Georgia Capital's education business is the largest player in
the private K-12 market in Georgia with 9.4% market share. It currently
combines majority stakes in four private school brands operating across seven
campuses, which are well-positioned in the international, premium, midscale
and affordable market segments. Revenue of the business increased by 19.5%
y-o-y to GEL 21.7 million in 2Q25 (up 18.4% y-o-y to GEL 43.4 million in
1H25), primarily driven by a) organic growth through strong intakes and b)
expansion of the business through the addition of two new campuses (greenfield
and acquisitions) during 2023. Operating expenses were up by 15.4% y-o-y in
2Q25 (up by 15.3% y-o-y in 1H25), mainly reflecting increased salary costs, in
line with the business expansion. Consequently, EBITDA amounted to GEL 7.1
million in 2Q25 and GEL 14.3 million in 1H25, up by 28.7% and 25.2% y-o-y,
respectively.
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
increased by 14.7% y-o-y to GEL 6.1 million in 2Q25 and was up by 5.0% y-o-y
to GEL 11.4 million in 1H25. This reflects a 14.8% and 4.2% y-o-y increase in
the number of cars serviced during 2Q25 and 1H25, respectively. Consequently,
the 2Q25 EBITDA increased by 26.9% y-o-y to GEL 3.2 million (up 4.8% y-o-y to
GEL 5.7 million in 1H25).
o Car services and parts business | Revenue of the business increased by
9.5% y-o-y to GEL 16.7 million in 2Q25 (up 8.0% y-o-y to GEL 29.8 million in
1H25), reflecting an increase in both the retail and wholesale segments.
Similarly, the gross profit increased by 21.8% y-o-y to GEL 5.0 million in
2Q25 (up 17.9% y-o-y to GEL 8.7 million in 1H25). Operating expenses remained
largely flat, down 0.6% y-o-y in 2Q25 (up 0.6% y-o-y in 1H25). As a result,
the business posted a GEL 1.6 million EBITDA in 2Q25 (GEL 2.1 million in
1H25), up 2.4x y-o-y (up 2.5x y-o-y in 1H25).
Ø Wine | In 2Q25, net revenue of the business increased by 60.2% y-o-y to GEL
19.0 million, mainly reflecting a 91.6% y-o-y increase in export sales. 1H25
net revenue was down 2.6% y-o-y to GEL 28.8 million, mainly reflecting a
timing difference in exports that had led to an unusually high base in the
prior year. This effect is expected to even out over the course of the year,
with minimal to no impact on full-year revenues, as reflected in the
trajectory of the 2Q25 results. Operating expenses remained largely flat, down
1.3% y-o-y in 2Q25 and up 0.2% y-o-y in 1H25. Consequently, the wine business
posted EBITDA of GEL 3.2 million in 2Q25 (up 2.8x y-o-y) and GEL 3.2 million
in 1H25 (down 15.3% y-o-y).
Ø Real estate businesses | The combined revenue of the real estate business
declined by 28.6% and 35.8% y-o-y to GEL 36.0 million and GEL 72.6 million in
2Q25 and 1H25, respectively, primarily reflecting a lower volume of
residential and commercial units sold during the period. The decline was
partially offset by the strong operating performance of the hospitality
business, which posted a 22.1% y-o-y increase in revenue in 2Q25 (a 23.0%
y-o-y increase in 1H25). Operating expenses were down by 14.3% y-o-y in 2Q25
and down by 5.9% y-o-y in 1H25. As a result, the real estate business posted a
breakeven EBITDA in 2Q25 (GEL 5.7 million EBITDA in 1H25).
ADDITIONAL FINANCIAL INFORMATION
The 1H25 NAV Statement shows the development of NAV since 31-Dec-24:
GEL '000, unless otherwise noted Dec-24 1. Value creation(( 41 (#_ftn41) )) 2a. 2b. 2c. Dividends 3. Operating expenses 4. Liquidity/ FX/Other Jun-25 Change
(Unaudited) Investment and Divestments Buyback %
Listed and observable portfolio companies
Lion Finance Group 1,421,035 834,706 - - (32,916) - - 2,222,825 56.4%
Water utility 188,000 3,744 (191,744) - - - - - NMF
Total listed and observable portfolio value 1,609,035 838,450 (191,744) - (32,916) - - 2,222,825 38.1%
Listed and observable portfolio value change % 52.1% -11.9% 0.0% -2.0% 0.0% 0.0% 38.1%
Private portfolio companies
Large portfolio companies 1,557,951 227,126 - - (23,816) - 1,873 1,763,134 13.2%
Retail (pharmacy) 716,130 108,285 - - (9,960) - 1,126 815,581 13.9%
Insurance (P&C and medical) 427,945 49,373 - - (13,856) - 207 463,669 8.3%
Healthcare services 413,876 69,468 - - - - 540 483,884 16.9%
Emerging and other companies 594,504 (51,216) 12,692 - (973) - 1,286 556,293 -6.4%
Total private portfolio value 2,152,455 175,910 12,692 - (24,789) - 3,159 2,319,427 7.8%
Private portfolio value change % 8.2% 0.6% 0.0% -1.2% 0.0% 0.1% 7.8%
Total portfolio value (1) 3,761,490 1,014,360 (179,052) - (57,705) - 3,159 4,542,252 20.8%
Total portfolio value change % 27.0% -4.8% 0.0% -1.5% 0.0% 0.1% 20.8%
Net debt (2) (154,425) - 179,052 (143,229) 57,705 (11,340) (4,640) (76,877) -50.2%
of which, cash and liquid funds 278,237 - (12,692) (143,229) 57,705 (11,340) (17,933) 150,748 -45.8%
of which, loans issued - - - - - - 513 513 NMF
of which, receivable on put option exercise - - 191,744 - - - - 191,744 NMF
of which, gross debt (432,662) - - - - - 12,780 (419,882) -3.0%
Net other assets/(liabilities) (3) 1,948 - - (616) - (7,640) 4,144 (2,164) NMF
of which, share-based comp. - - - - - (7,640) 7,640 - NMF
Net asset value (1)+(2)+(3) 3,609,013 1,014,360 - (143,845) - (18,980) 2,663 4,463,211 23.7%
NAV change % 28.1% 0.0% -4.0% 0.0% -0.5% 0.1% 23.7%
Shares outstanding(41) 37,612,488 - - (2,776,848) - - 690,160 35,525,800 -5.5%
Net asset value per share, GEL 95.95 26.97 0.00 3.52 0.00 (0.50) (0.32) 125.63 30.9%
NAV per share, GEL change % 28.1% 0.0% 3.7% 0.0% -0.5% -0.3% 30.9%
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.
2Q25, unaudited 1H25, 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 49,697 (49,697) - 57,705 (20,146) 37,559
Interest income 1,847 (1,833) 14 4,637 (4,597) 40
Realised/unrealised gain on liquid funds 23 (23) - 73 (73) -
Interest expense (8,922) 8,922 - (18,026) 18,026 -
Gross operating income 42,645 (42,631) 14 44,389 (6,790) 37,599
Operating expenses (administrative, salaries and other employee benefits) (9,195) 9,195 - (18,979) 18,979 -
GCAP net operating income 33,450 (33,436) 14 25,410 12,189 37,599
Total investment return/gain on investments at fair value 621,169 43,014 664,183 956,655 (790) 955,865
Administrative expenses, salaries and other employee benefits - (1,570) (1,570) - (3,438) (3,438)
Income before foreign exchange movements and non-recurring expenses 654,619 8,008 662,627 982,065 7,961 990,026
Net foreign currency gain/(loss) 4,418 (5,531) (1,113) 11,431 (9,805) 1,626
Non-recurring expenses (4,491) 4,491 - (4,749) 4,749 -
Net income 654,546 6,968 661,514 988,747 2,905 991,652
Basis of presentation
This announcement contains unaudited financial results presented in accordance
with UK-adopted international accounting standards ("IFRS"). The financial
results are unaudited and derived from management accounts.
Under IFRS 10, Georgia Capital PLC meets the "investment entity" definition.
For more details about the basis of preparation please refer to page 94 in
Georgia Capital PLC 2024 Annual report.
The presentation of the Income Statement (Adjusted) and some of the
information under the NAV Statement should be considered to be Alternative
Performance Measures (APM).
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.
Principal risks and uncertainties
Understanding our risks
We continuously monitor our internal and external environment to ensure that
any new principal or emerging risk is identified in a timely manner and
responded to appropriately. The Directors have carried out a robust assessment
of the principal and emerging risks facing the Group, including those that
would threaten its business model, future performance, solvency or liquidity.
We define our principal risks as those that have the potential to impact the
delivery of our strategic objectives materially. We also monitor risks which
include new and emerging risks which may have the potential to become
principal risks but are not yet considered to be so. Emerging risks usually
have large uncertain outcomes which may become certain in the longer term
(beyond one year) and which could have a material effect on the business
strategy if they were to occur.
Principal risks and uncertainties
The table below describes the principal risks and uncertainties faced by the
Group and their potential impact, as well as the trends and outlook associated
with these risks and the mitigating actions we take to address these risks. If
any of the following risks were to occur, the Group's business, financial
condition, results of operations or prospects could be materially affected.
The risks and uncertainties described below may not be the only ones the Group
faces. The order in which the principal risks and uncertainties appear does
not denote their order of priority. Additional risks and uncertainties,
including those that the Group is currently not aware of or deems immaterial,
may also result in decreased revenues, incurred expenses or other events that
could result in a decline in the value of the Group's securities.
REGIONAL INSTABILITY RISK
PRINCIPAL RISK / UNCERTAINTY The Georgian economy and our business may be adversely affected by regional
tensions. Georgia shares borders with Russia, Azerbaijan, Armenia and the
Republic of Türkiye, and has two breakaway territories, Abkhazia and the
Tskhinvali/South Ossetia regions. Georgia is also located in close proximity
to other regional conflicts. In addition to strong political and geographic
influences, regional countries are highly linked to the Georgian economy,
representing its significant historical trading partners.
Russian troops invaded Ukraine on 24 February 2022, escalating the situation
into a full-scale war. The ongoing conflict has caused severe humanitarian and
economic costs for Ukraine, Russia and the global economy. Casualties persist
as the war's duration and outcome remain uncertain. As time progresses, the
conflict's adverse effects may intensify, further eroding market confidence
and impacting the region. Georgia itself has a fraught history with Russia,
including a brief war in 2008, which resulted in Russia taking control of two
breakaway territories.
There has also been ongoing geopolitical tension, political and economic
instability and military conflict between other regional countries. For
example, Armenia and Azerbaijan have been in on/off conflict since 2020, with
an escalation in late 2023 resulting in approximately 110,000 ethnic Armenians
fleeing Azerbaijan to Armenia. Although negotiations toward a comprehensive
peace treaty between the two countries continue, with recent talks showing
cautious optimism, tensions remain. These developments have implications for
Georgia, which shares borders with both Armenia and Azerbaijan.
On 7 October 2023, Hamas launched a surprise assault on Israeli territory,
prompting Israel to declare a state of war and initiate a large-scale ground
invasion of the Gaza Strip. The conflict remains unresolved, with a high risk
of broader regional escalation. Tensions reached a peak in June 2025 following
Israeli strikes on Iranian nuclear and energy facilities, which were met with
retaliatory missile attacks from Iran and subsequent involvement by the United
States. A fragile ceasefire was established on June 24, bringing an end to 12
days of hostilities. This escalation poses a significant threat to regional
stability and global markets, particularly due to the potential disruption of
the Strait of Hormuz - a critical chokepoint for global oil trade. Given
Georgia's geographic proximity to the Middle East, any further escalation of
the conflict, alongside the ongoing situation in Gaza, could have adverse
implications for the Group.
The regional instability described above poses potential risks to Georgia's
economic and political environment, potentially affecting trade routes,
investment flows and overall regional security. Georgia's strategic location
as a transit hub underscores the importance of stability in neighbouring
countries for its own economic and security interests.
Domestically, political polarisation has deepened. In May 2024, the ruling
Georgian Dream party passed a contentious "foreign agents" law, prompting mass
protests and strong international criticism. Despite this, the party secured
54% of the vote in the October 2024 elections. Protests escalated in November
following the government's decision to suspend EU accession efforts until
2028, triggering the EU to revoke visa-free travel for Georgian officials and
prompting targeted sanctions from the US, UK, and Baltic states.
In December 2024, the US sanctioned Georgian Dream founder Bidzina
Ivanishvili, citing efforts to undermine Georgia's Euro-Atlantic path. The
government's increasingly authoritarian stance and suppression of opposition
voices have drawn further scrutiny. By August 2025, demonstrations had
continued for over 200 days, with the EU warning that broader visa
liberalisation for Georgian citizens could be at risk unless key democratic
reforms are enacted. Meanwhile, the US MEGOBARI Act, proposing wider
sanctions, awaits Senate approval.
Prolonged unrest, democratic backsliding, or regional conflict escalation may
undermine macroeconomic stability, deter investment, and negatively affect our
portfolio and operations.
KEY DRIVERS / TRENDS The Russian invasion of Ukraine has led to profound economic disruption,
marked by a sharp decline in market confidence, the imposition of
unprecedented sanctions on the Russian economy, and heightened spillover
risks. As the situation remains uncertain, further economic repercussions are
expected. Ongoing peace negotiations involving the United States and countries
in Europe have not yet resulted in tangible progress, and the war continues
unabated. These developments have introduced new uncertainties into global
markets, with potential implications for economic stability and international
relations.
The September 2023 Azerbaijan offensive in the Nagorno-Karabakh region, and
the subsequent dissolution of the breakaway Nagorno-Karabakh republic, has
significantly altered the geopolitical status quo in the Caucasus. While
Russian peacekeeping forces remain in Armenia, its influence on both countries
appears to have weakened at least for now. Armenia and Azerbaijan continue to
negotiate but have yet to reach a mutually acceptable peace agreement, despite
ongoing negotiations, with among others Türkiye, the EU and Iran seeking to
have an influence.
Long-term geopolitical implications of the Israel-Hamas war for the wider
region remain highly uncertain. While Georgia's economic exposure to Israel on
a macro level is not particularly large, Israel is an important source of
remittances and tourism revenues. In 1H25, remittances from Israel made up US$
135 million (7.8% of the total) and tourism receipts equalled US$ 242 million
(12.3% of the total).
Russia imposed economic sanctions on Georgia in 2006, and conflict between the
countries escalated in 2008 when Russian forces crossed Georgian borders and
recognised the independence of Abkhazia and the Tskhinvali/South Ossetia
regions. Russian troops continue to occupy the regions, and tensions between
Russia and Georgia persist.
Despite the regional and domestic factors as described above, Georgia's
economy demonstrated robust growth. Following a 9.4% expansion in 2024, the
Georgian economy sustained its growth momentum with preliminary growth of 8.3%
y-o-y in 1H25. Foreign exchange inflows maintained their positive trend, while
loan growth contributed to economic stability. The GEL experienced
fluctuations in 2024 due to domestic political tensions and election-related
uncertainties. The Georgian Lari depreciated as negative sentiment increased
demand for hard currency. In response, the NBG actively intervened in the
foreign exchange market to manage expectations. While it was a net buyer of
US$ 287 million from January to April, it became a net seller, offloading US$
874 million between May and October. Overall, the GEL depreciated by 4.2%
y-o-y in 2024, despite strong economic fundamentals and solid FX inflows.
However, in 2025, the GEL began to appreciate, strengthening by 4.1% year to
date as of 5 August 2025, primarily driven by a weaker dollar stance globally
and increasing FX inflows. The NBG re-entered the FX market in March 2025,
purchasing US$ 879.5 million between March and June to bolster its foreign
exchange reserves.
MITIGATION The Group actively monitors significant developments in the region and risks
related to political instability and the Georgian Government's response
thereto. It also develops responsive strategies and action plans of its own.
The Georgian export market shifted away from the Russian market after Russia's
2006 embargo, and the Group participated in that shift. In 2024, Russia
accounted for 10.4% of Georgian exports, as opposed to 17.8% in 2005.
Since the beginning of the Russia-Ukraine war, the migration effect from
Russia, Ukraine and Belarus has altered the composition of foreign currency
inflows from remittances and international visitors. The migration effect has
resulted in an 86% y-o-y increase in remittance inflows in 2022, including a
fivefold increase of up to US$ 2.1 billion from Russia. Remittances had
started to decline from May 2023 and continued the decreasing trend falling by
19% y-o-y in 2024, reflecting a 65% y-o-y decline from Russia. With
remittances from Russia returning to pre-war levels, inflows from other
countries have continued to rise, contributing to a 3.5% y-o-y increase in
total remittances in 1H25. Moreover, while international travel receipts
increased substantially from the three countries directly after the start of
the war, tourism revenues from those countries have been declining since 1H23
on the back of the fading impact of war-related migration. In 2024, tourism
revenues from the rest of the world were the driving factor behind a 7.3%
y-o-y growth in travel receipts. In contrast, receipts from Russia, Ukraine
and Belarus fell by 9%, 19% and 6% y-o-y in 2024, respectively. Tourism
revenues increased moderately by 3.8% to US$ 2.0 billion in 1H25. Particularly
notable was a 38% y-o-y increase in revenues from Israel, while receipts from
the EU rose by 12.5%. Whilst elevated foreign currency inflows have
effectively constituted rising external demand in the short run, the medium to
long-term effects remain highly uncertain, depending on the timing and terms
of the eventual conclusion of the war in Ukraine. Despite this surge in
foreign currency inflows predominantly from Russia, both remittance inflows
and tourism receipts remain diversified.
Merchandise exports also remain diversified, although CIS share in export
surged after Russia's invasion of Ukraine, as the "middle corridor" gained
importance. Kyrgyzstan and Kazakhstan became the top destination countries for
Georgian exports in 2024 -2025, accounting for 21% and 13% of total exports in
1H25, respectively (1.7% and 4.3% in 2022), followed by Azerbaijan with 11%
and Russia with 10% (12.1% and 11.5% in 2022, respectively). Russia was the
largest destination country for domestically produced Georgian exports with a
21% share in 1H25 (22% in 2024), followed by China with 11% (9% in 2024).
While financial market turbulence and geopolitical tensions affect regional
trading partners, Georgia's preferential trading regimes, including DCFTA with
the EU and FTA with China, support the country's resilience against regional
external shocks. In December 2023, the European Council granted Georgia the
status of a candidate country. Even though Georgia's EU integration is on
hold, core institutional agreements such as the DCFTA continue to function.
The 2024 European Commission Enlargement Report on Georgia highlights
significant challenges in the country's progress toward EU membership,
particularly regarding democratic reforms and rule of law. The Report notes
that the granting of candidate status to Georgia has not been followed by
sufficient political commitment of the authorities to implement the necessary
reforms for the country's progress on the EU path. As a consequence, Georgia's
accession process has de facto been halted.
While Georgia has strengthened its ties with the EU over the past decade, the
recent developments have severely impacted its trajectory. The adoption of the
controversial "transparency of foreign influence" law, strongly opposed by
Western nations, and the decision to halt EU accession talks until 2028 have
strained Georgia's relationship with the EU.
CURRENCY AND MACROECONOMIC ENVIRONMENT RISKS
PRINCIPAL RISK / UNCERTAINTY Unfavourable dynamics of major macroeconomic variables, including the
depreciation of the Georgian Lari against the US Dollar, may have a material
impact on the Group's performance.
On the macro level, the country's free-floating exchange rate works well as a
shock absorber, but on the micro level, currency fluctuations have affected
and may continue to adversely affect the Group's results. There is a risk that
the Group incurs material losses or loses material amounts of revenue and,
consequently, deteriorates its solvency in a specific currency or group of
currencies due to the fluctuation of exchange rates. The risk is mainly caused
by significant open foreign currency positions in the balance sheets of the
Group and the portfolio companies.
KEY DRIVERS / TRENDS The Group's operations are primarily located in, and most of its revenue is
sourced from Georgia. Factors such as GDP, inflation, interest and currency
exchange rates, as well as unemployment, personal income, tourist numbers and
the financial situation of companies, can have a material impact on customer
demand for its products and services.
The Lari floats freely against major currencies. In 2024, the GEL depreciated
against the US Dollar and other major currencies, particularly around mid-year
and year-end, largely due to heightened uncertainty surrounding domestic
policies and the election period. Currency market has become volatile since
May 2024, as introduction of the "transparency of foreign influence" law
increased uncertainty and led to street protests. The GEL experienced another
wave of sell-off during October (particularly around the parliamentary
election on 26 October), when NBG sold the record high US$ 591 million in one
month to curb negative expectations. Overall, the GEL depreciated by 4.2%
y-o-y in 2024 on the back of increasing country risk premium and surging
negative expectations. However, in 2025, the Georgian Lari reversed its
previous trend and appreciated, gaining 4.1% year to date as of 5 August. This
strengthening was primarily supported by a weaker global US Dollar and
increased foreign exchange inflows. Looking at the trading partners'
currencies and overall GEL position, the Real Effective Exchange Rate (REER)
depreciated by 1.6% y-o-y, while the nominal effective exchange rate (NEER)
appreciated by 3.6% y-o-y in June 2025.
NBG raised the monetary policy rate by 300 bps during March 2021-April 2022 to
11%, responding to high inflation, subsequent rising inflationary expectations
and increased uncertainty. Inflation remained below the 3% target for two
consecutive years, averaging 1.1% in 2024. However, price pressures re-emerged
in 2025, pushing inflation above the target. In July 2025, headline
inflation reached 4.3%, marking the fifth consecutive month above the
target, mainly due to rising food prices. Considering the strong disinflation,
as well as favourable macro dynamics the NBG began a gradual exit from tight
monetary policy, cutting the policy rate by a cumulative 150 bps in 2023 and
another 150 bps in the first five months of 2024, bringing it to 8.0%. Since
May 2024, the NBG has kept the policy rate steady at 8.0%, with a commitment
to adjust it based on macroeconomic developments.
According to the latest projections from the Ministry of Finance, public debt
is expected to decrease to 35.5% of GDP in 2025, while the fiscal deficit will
remain steady at 2.5% of GDP, in line with fiscal rule bounds.
Real GDP continued its strong performance in 2024, growing by 9.4% y-o-y,
despite increased uncertainty. Georgia has been among the top performers in
the world according to the IMF and the World Bank. The real economy remains
strong in Georgia with preliminary growth at 8.3% y-o-y in 1H25, due to strong
services sector performance.
The current account deficit widened to 8.5% of GDP in 1Q25, compared to 4.4%
of GDP in 1Q24, mainly driven by a 10% y-o-y increase in goods imports and a
rise in the negative balance of the primary income account, while export of
services has an increasing trend. Total FDI for 2024 stood at US$ 1.3 billion
(4% of GDP), marking a 30% y-o-y decline following record highs in 2022 and
2023 (US$ 2.3 billion and US$ 1.9 billion, respectively). In 2025, FDI
continues weakening, decreasing by 7.7% y-o-y to US$ 179 million in 1Q25.
Due to the recent political developments and the introduction of the
"transparency of foreign influence" law, Fitch downgraded the outlook from
positive to stable in June 2024, followed by a further revision to Negative in
December 2024. In May 2025, Fitch affirmed Georgia's rating at 'BB' with a
negative outlook, pointing to elevated political risks.
MITIGATION The Georgian economy remains vulnerable to external shocks due to a mix of its
historically high current account deficit, low domestic savings rate and high
level of dollarisation. As noted above, the current account deficit widened
significantly in 1Q25, on the back of increasing goods import. In March 2025,
NBG re-entered the FX market, purchasing US$ 879.5 million between March and
June to replenish its foreign exchange reserves. This brought official reserve
assets to US$ 4.7 billion by the end of June 2025, reflecting partial recovery
following the reserve drawdown in 2024, when the NBG sold reserves to support
the Georgian Lari.
The Group continually monitors market conditions, reviews market changes and
performs stress and scenario testing to test its position under adverse
economic conditions, including adverse currency movements.
The currency risk management process is an integral part of the Group's
activities; currency risk is managed through regular and frequent monitoring
of the Group's currency positions and through the timely and efficient
elaboration of responsive actions and measures. Senior management reviews the
overall currency positions of the Group several times during the year and
elaborates on respective overall currency strategies; the Finance department
monitors the daily currency position for Georgia Capital HoldCo, weekly
currency positions on a portfolio company level, manages short-term liquidity
of the Group across different currencies and engages in currency risk
mitigation agreements, such as currency hedges, forwards and swaps. Control
procedures involve regular monitoring and control of the currency gap and
currency positions, running currency sensitivity tests and elaborating
response actions/steps based on the results of the tests.
REGULATORY AND LEGAL RISKS
PRINCIPAL RISK / UNCERTAINTY The Group owns businesses operating across a wide range of industries:
banking, healthcare, retail (pharmacy) and distribution, property and casualty
insurance, medical insurance, hydro and wind power, education, beverages, real
estate and auto service. Many of these industries are highly regulated. The
regulatory environment continues to evolve, and we cannot predict what
additional regulatory changes will be introduced in the future or the impact
they may have on our operations.
Georgia Capital and its businesses may also be adversely affected by risks
related to litigations arising from time to time in the ordinary course of
business.
KEY DRIVERS / TRENDS Each of our businesses is subject to different regulators and regulations.
Legislation in certain industries, such as banking, healthcare, energy and
insurance is continuously evolving. Different changes, including but not
limited to governmental funding, licensing and accreditation requirements, may
adversely affect our businesses.
Regulatory developments in recent years have been particularly hard to
anticipate in the healthcare sphere, where Georgia switched to a universal
healthcare model in 2013 and a series of changes to the model since it was
introduced have negatively affected our hospitals and, more recently, our
retail (pharmacy) business. While we expect that the multi-year regulatory
reset in healthcare is now coming to a close, there is no assurance that
further regulatory changes in healthcare or other sectors will not adversely
affect us.
Except for the three cases listed below, there were no governmental, legal or
arbitration proceedings (including any such proceedings which are pending or
threatened of which GCAP is aware) during the 12 months preceding the date of
this document which may have, or have had in the recent past, significant
effects on either GCAP and/or its portfolio companies' financial position or
profitability.
Imedi L litigation
As at 30 June 2025, several portfolio companies (hospitals, clinics and
P&C insurance, together the "Defendants") were engaged in litigation with
the former shareholders of Insurance Company Imedi L who allege that they sold
their 66% shares in Imedi L to the Defendants under duress at a price below
market value in 2012. Since the outset, the 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
later 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. On 12 June 2025, the Appellate Court ruled in favour of the
claimants and upheld their claim, ordering the Defendants to pay a principal
amount of US$ 12.7 million plus annual interest of 5% as compensation for lost
income (approximately US$ 21 million in total). On 29 July 2025, the
Defendants appealed the decision of the Appellate Court to the Supreme Court.
The Defendants continue to believe that their position is legally correct.
While the decision of the Appellate Court is a setback and increases the risk,
defendants will continue to vigorously defend their position at the Supreme
Court.
BGA Litigation
As at 30 June 2025, 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 0.3 million 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 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. In particular, GEG's
position is that it is the minority partner who failed to honour investment
commitments under the MoU. 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.
Retail (Pharmacy) 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 million derived by
utilising the single rate across all the alleged participants. The retail
(pharmacy) business has appealed the Agency's decision in court and plans to
vigorously defend its position. No date of hearing has been set yet.
MITIGATION Continued investment in our people and processes enables us to meet our
current regulatory requirements and means that we are well-placed to respond
to any future changes in regulation. Further, our investment portfolio is well
diversified, limiting exposure to particular industry-specific regulatory
risks.
In line with our integrated control framework, we carefully evaluate the
impact of legislative and regulatory changes as part of our formal risk
identification and assessment processes and, to the extent possible,
proactively participate in the drafting of relevant legislation. As part of
this process, we engage where possible in constructive dialogue with
regulatory bodies and seek external advice on potential changes to
legislation. We then develop appropriate policies, procedures and controls as
required to fulfil our compliance obligations. Our compliance framework, at
all levels, is subject to regular review by Internal Audit and external
assurance providers.
Our integrated control framework also ensures the application and development
of mechanisms for identifying legal risks in the Group's activities in a
timely manner, the monitoring and investigation of the Group's activities in
order to identify any legal risks, the planning and implementation of all
necessary actions for the elimination of identified legal risks, participation
in legal proceedings on behalf of the Group where necessary and the
investigation of possibilities for increasing the effectiveness of the Group's
legal documentation and its implementation in the Group's daily activities.
The framework also considers the engagement of external legal advisors, when
appropriate.
INVESTMENT RISK
PRINCIPAL RISK / UNCERTAINTY The Group may be adversely affected by risks in respect of specific investment
decisions. The Group will generally seek to monetise its investments,
primarily through strategic sales, typically within five to ten years of
acquisition, and faces both market and execution risks in realising exits at
acceptable valuations.
KEY DRIVERS / TRENDS An inappropriate investment decision might lead to poor performance.
Investment risks may arise from inadequate research and due diligence of new
acquisitions and bad timing of the execution of both acquisition and
divestment decisions. The valuation of investments can be volatile in line
with market developments.
Macroeconomic conditions, the financial and economic environment and other
market conditions in international capital markets may limit the Group's
ability to achieve a partial or full exit from its existing or future
businesses at reasonable prices. It may not be possible or desirable to
divest, including because suitable buyers cannot be found at the appropriate
times, or because of difficulties in obtaining favourable terms or prices, or
because the Group has failed to act at the appropriate time.
MITIGATION The Group manages investment risk with established procedures and a thorough
evaluation of target acquisitions. Investment opportunities are subject to
rigorous appraisal and a multi-stage approval process. Target entry and exit
event prices are monitored and updated regularly in relation to market
conditions and strategic aims. The Group performs due diligence on each target
acquisition including on financial and legal matters. Subject to an evaluation
of the due diligence results an acceptable price and funding structure is
determined, and the pricing, funding and future integration plan is presented
to the Board for approval. The Board reviews and approves or rejects proposals
for development, acquisition and sale of investments and decides on all major
new business initiatives, especially those requiring a significant capital
allocation. The Board focuses on both investment strategy and exit processes,
while also actively managing exit strategies in light of the prevailing market
conditions.
Our acquisition history has also been successful, and we have been able to
integrate businesses due to our strong management with integration experience.
In 2022, GCAP completed the water utility business disposal, which represents
our most significant monetisation event to date and marks the completion of
the full investment cycle as set out on page 12 of the Group's 2022 Annual
Report. In 2024, as part of our continued strategic execution, we divested
from our beer and distribution business, which was sold to a strategic
international investor. Details of this transaction are provided on page 8 of
GCAP's 2024 Annual Report. In June 2025, Georgia Capital exercised its option
to put a 20% stake in the water utility business, as explained on page 2 of
this Report.
LIQUIDITY RISK
PRINCIPAL RISK / UNCERTAINTY Risk that liabilities cannot be met, or new investments made, due to a lack of
liquidity. Such risk can arise from not being able to sell an investment due
to lack of demand from the market, from suspension of dividends from portfolio
companies, from not holding cash or being able to raise debt.
KEY DRIVERS / TRENDS The Group predominantly invests in private portfolio businesses, potentially
making the investments difficult to monetise at any given point in time. There
is a risk that the Group will not be able to meet its financial obligations
and liabilities on time due to a lack of cash or liquid assets or the
inability to generate sufficient liquidity to meet payment obligations. This
may be caused by numerous factors, such as the inability to refinance
long-term liabilities; suspended dividend inflows from the investment entity
subsidiaries; excessive investments in long-term assets and a resulting
mismatch in the availability of funding to meet liabilities; or failure to
comply with the creditor covenants causing a default.
MITIGATION The liquidity management process is a regular process, where the framework is
approved by the Board and is monitored by senior management and the Chief
Financial Officer. The framework models the ability of the Group to fund under
both normal conditions (Base Case) and during stressed situations. This
approach is designed to ensure that the funding framework is sufficiently
flexible to ensure liquidity under a wide range of market conditions. The
Finance department monitors certain liquidity measures on a daily basis and
actively analyses and manages liquidity weekly. Senior management is involved
at least once a month and the Board on a quarterly basis. Such monitoring
involves a review of the composition of the cash buffer, potential cash
outflows and management's readiness to meet such commitments. It also serves
as a tool to revisit the portfolio composition and take necessary measures, if
required.
Since the adoption of the capital management framework and introduction of the
NCC navigation tool in May 2022, the Group's primary emphasis has centred
around deleveraging. This strategic approach has resulted in a significant
reduction in the Group's liquidity risk.
In August 2023, JSC Georgia Capital successfully issued a US$ 150 million
sustainability-linked bond (SLB). The proceeds from the transaction, together
with existing liquid funds of GCAP, were utilised to fully redeem the US$ 300
million Eurobond. Following the cancellation and repayment of the outstanding
Eurobond, GCAP's gross debt balance has been reduced from US$ 300 million to
US$ 150 million over the last two years, significantly improving its leverage
profile.
Overall, since the introduction of the NCC concept in 1Q22, the NCC ratio has
decreased significantly, from 28.2% at 31 March 2022 to 7.0% at 30 June 2025.
The Group aims to maintain the NCC ratio below 10%. The deleveraging strategy
was also implemented across our private portfolio companies, where individual
leverage targets have been developed.
In October 2023, S&P updated GCAP's issuer credit rating from "B+" to
"BB-/Stable".
In the recent period, our portfolio companies made significant progress in
enhancing their overall financial position. Leverage profiles improved across
the business due to the extension of debt maturities in most private portfolio
companies, demonstrating management's effective liquidity management measures.
That said, the Group has a strong track record in accessing both bank finance
and the public capital markets and believes that the progress on its leverage
position has improved that access.
PORTFOLIO COMPANY STRATEGIC AND EXECUTION RISKS
PRINCIPAL RISK / UNCERTAINTY Market conditions may adversely impact our strategy and all our businesses
have their own risks specific to their industry. Our businesses have growth
and expansion strategies and we face execution risk in implementing these
strategies.
KEY DRIVERS / TRENDS Each of our portfolio companies face its own risks. These include risks
inherent to their industry, or to their industry particularly in Georgia, and
each faces significant competition. They also face the principal risks and
uncertainties referred to in this table.
MITIGATION For each business, we focus on building a strong management team and have
successfully been able to do so thus far. Management succession planning is
regularly on the agenda for the Nomination Committee which reports to the
Board on this matter. The Board closely monitors the implementation of
strategy, financial and operational performance, risk management and internal
control framework, and corporate governance of our businesses. We hold
management accountable for meeting targets.
For each industry in which we operate, we closely monitor industry trends,
market conditions and the regulatory environment. We have also sought, and
continue to seek, advice from professionals with global experience in relevant
industries. We carry our private portfolio companies at fair value in our NAV
Statement. The valuations are audited, increasing the credibility of fair
valuation and limiting the risk of mispricing the asset. In addition, the
valuation of retail (pharmacy), insurance, healthcare services, renewable
energy and education businesses (47.7% of total portfolio value) is performed
by an independent valuation company on a semi-annual basis.
Statement of Directors' Responsibilities
We, the Directors, confirm that to the best of our knowledge:
§ The unaudited interim condensed financial statements have been prepared in
accordance with International Accounting Standard (IAS) 34 "Interim Financial
Reporting", as adopted by the United Kingdom and give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Company;
§ This Results Report includes a fair review of the information required by
Disclosure Guidance and Transparency Rule 4.2.7R (indication of important
events during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
§ This Results Report includes a fair review of the information required by
Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related
parties' transactions and changes therein)
After making enquiries, the Directors considered it appropriate to adopt the
going concern basis in preparing this Results Report.
The Directors of the Group are as follows:
Irakli Gilauri
David Morrison
Massimo Gesua' sive Salvadori
Maria Chatti-Gautier
Neil Janin
By order of the Board
Irakli
Gilauri
Chairman & Chief Executive
Officer
5 August 2025
Georgia Capital PLC Unaudited Interim
Condensed Financial Statements
30 June 2025
CONTENTS
INTERIM CONDENSED FINANCIAL STATEMENTS
Interim Condensed Statement of Financial Position
.....................................................................................................................
29
Interim Condensed Statement of Profit or Loss and Comprehensive Income
............................................................................
30
Interim Condensed Statement of Changes in Equity
.....................................................................................................................
31
Interim Condensed Statement of Cash Flows
................................................................................................................................
32
SELECTED EXPLANATORY NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
1. Principal Activities
2. Basis of Preparation
3. Material Accounting Policy Information
4. Segment Information
5. Equity Investments at Fair Value
6. Equity
7. Fair Value Measurements
8. Maturity Analysis
9. Related Party Disclosures
10. Events after the Reporting Period
Note 30 June 2025 (unaudited) 31 December 2024
Assets
Cash and cash equivalents* 2,748 3,521
Prepayments 1,356 1,396
Equity investments at fair value 5 4,462,138 3,606,400
Total assets 4,466,242 3,611,317
Liabilities
Other liabilities 3,031 2,304
Total liabilities 3,031 2,304
Equity
Share capital 6 1,213 1,300
Additional paid-in capital and merger reserve 238,311 238,311
Treasury shares (2) (2)
Retained earnings 4,223,689 3,369,404
Total equity 4,463,211 3,609,013
Total liabilities and equity 4,466,242 3,611,317
*As at 30 June 2025 and 31 December 2024 cash and cash equivalents consist of
current accounts with credit institutions.
The financial statements on page 29 to 53 were approved by the Board of
Directors on 5 August and signed on its behalf by:
Irakli
Gilauri
Chief Executive Officer
5 August 2025
Georgia Capital PLC
Registered No. 10852406
Note 30 June 2025 (unaudited) 30 June 2024 (unaudited)
Gains/(losses) on investments at fair value 5 955,865 (221,804)
Dividend income 5 37,559 32,841
Gross investment profit/(loss) 993,424 (188,963)
General and Administrative expenses (2,631) (2,099)
Salaries and other employee benefits (807) (1,084)
Profit/(loss) before foreign exchange and non-recurring items 989,986 (192,146)
Net foreign currency gain/(loss) 1,626 (43)
Interest income 40 -
Net losses from investment securities measured at FVPL - (112)
Profit/(loss) before income taxes 991,652 (192,301)
Income tax - -
Profit/(loss) for the period 991,652 (192,301)
Other comprehensive income - -
Total comprehensive income/(loss) for the period 991,652 (192,301)
Earnings/(loss) per share (GEL): 6
- basic 28.9122 (4.9970)
- diluted 28.3750 (4.9970)
Share capital Additional paid-in capital and merger reserve Treasury shares Retained earnings Total
1 January 2025 1,300 238,311 (2) 3,369,404 3,609,013
Profit for the period - - - 991,652 991,652
Total comprehensive income for the period - - - 991,652 991,652
Increase in equity arising from share-based payments - - - 175 175
Cancellation of shares (Note 6) (87) - 87 - -
Purchase of treasury shares (Note 6) - - (87) (137,542) (137,629)
30 June 2025 (unaudited) 1,213 238,311 (2) 4,223,689 4,463,211
Share capital Additional paid-in capital and merger reserve Treasury shares Retained earnings Total
1 January 2024 1,420 238,311 (2) 3,138,783 3,378,512
Loss for the period - - - (192,301) (192,301)
Total comprehensive loss for the period - - - (192,301) (192,301)
Increase in equity arising from share-based payments - - - 229 229
Cancellation of shares (Note 6) (39) - 39 - -
Purchase of treasury shares (Note 6) - - (42) (45,677) (45,719)
30 June 2024 (unaudited) 1,381 238,311 (5) 2,901,034 3,140,721
Note 30 June 2025 (unaudited) 30 June 2024 (unaudited)
Cash flows from operating activities
Interest income received 40 -
Salaries and other employee benefits paid (632) (854)
General, administrative and operating expenses paid (1,582) (2,694)
Net cash flows used in operating activities before income tax (2,174) (3,548)
Income tax paid - -
Net Cash flows used in operating activities (2,174) (3,548)
Cash flows from investing activities
Net capital redemption/injection 5 100,127 -
Proceeds from redemption of redeemable securities - 3,379
Dividends received 5 37,559 32,841
Cash flows from investing activities 137,686 36,220
Cash flows from financing activities
Other purchases of treasury shares 6 (136,026) (43,231)
Acquisition of treasury shares under share-based payment plan 6 (499) (304)
Net cash used in financing activities (136,525) (43,535)
Effect of exchange rates changes on cash and cash equivalents 240 (14)
Net decrease in cash and cash equivalents (773) (10,877)
Cash and cash equivalents, beginning of the period 3,521 12,319
Cash and cash equivalents, end of the period 2,748 1,442
1. Principal Activities
Georgia Capital PLC ("Georgia Capital" or the "Company") is a public limited
liability company incorporated in England and Wales with registered number
10852406. Georgia Capital PLC holds 100% of the share capital of the JSC
Georgia Capital ("JSC GCAP") and 92.4% of the share capital of Georgian
Beverages Holding Limited ("GBH Limited"), which together form a group of
companies (the "Group"), focused on buying, building and developing businesses
in Georgia and monetising investments as they mature. The Group currently has
the following portfolio businesses (i) a retail (pharmacy) business, (ii) an
insurance business (P&C and medical insurance), and (iii) a healthcare
services business (hospitals and clinics and diagnostics); Georgia Capital
also holds stakes in emerging and other small private businesses across
different industries in Georgia and a 19.1% (31 December 2024: 19.2%) equity
stake in LSE premium- Lion Finance Group PLC ("Lion Finance Group", formerly
Bank of Georgia Group PLC or "BoG"), which owns leading commercial banks in
Georgia and Armenia. The shares of Georgia Capital are admitted to trading on
the London Stock Exchange PLC's Main Market for listed securities under the
ticker CGEO, effective 29 May 2018.
Georgia Capital's registered legal address is Central Square, 29 Wellington
Street, Leeds, LS1 4DL, England, United Kingdom.
As at 30 June 2025 and 31 December 2024, the following shareholders owned more
than 5% of the total outstanding shares* of Georgia Capital. Other
shareholders individually owned less than 5% of the outstanding shares.
Shareholder 30 June 2025 (unaudited) 31 December
2024
Gemsstock Ltd** 8% 8%
Lazard Asset Management LLC 7% 7%
Allan Gray Ltd 6% 8%
Others 79% 77%
Total 100% 100%
*For the purposes of calculating percentage of shareholding, the denominator
includes total number of issued shares which includes shares held in the trust
for share-based compensation purposes of the Group.
** Omits holdings through certain financial instruments.
References to the Group are applied in these financial statements in the
context of going concern assessment, segment, fair valuation and risk
management disclosures.
2. Basis of Preparation
General
The Company's condensed half year financial statements have been prepared in
accordance with IAS 34, Interim Financial Reporting, as adopted by the United
Kingdom. They should be read in conjunction with the annual financial
statements for the year ended 31 December 2024, which have been prepared in
accordance with UK-adopted international accounting standards ("IFRS"), were
approved by the Board on 20 March 2025 and delivered to the Registrar of
Companies.
The interim condensed financial statements are unaudited and have not been
reviewed by auditors pursuant to the Auditing Practices Board guidance on
"Review of interim financial information".
These interim condensed financial statements are presented in thousands of
Georgian Lari ("GEL"), except per share amounts, which are presented in
Georgian Lari, and unless otherwise noted.
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. 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.
3. Material Accounting Policy Information
Accounting policies
The accounting policies and methods of computation applied in the preparation
of these interim condensed financial statements are consistent with those
disclosed in the annual financial statements of the Company as at and for the
year ended 31 December 2024. The Company has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet
effective.
The following amendments became effective from 1 January 2025 and had no
material impact on the Company's condensed interim financial statements:
Amendments to IAS 21 Lack of Exchangeability - Exchangeable Currency and
Determination of Exchange rate
Amendments to the SASB standards to enhance their international applicability
The following standards that are issued but not yet effective are also
expected to have no material impact on the Company's condensed interim
financial statements:
Amendments IFRS 9 and IFRS 7 regarding the classification and measurement of
financial instruments
IFRS 18 Presentation and Disclosures in Financial Statements
IFRS 19 Subsidiaries without Public Accountability: Disclosures
Annual Improvements to IFRS Accounting Standards - Volume 11
Contracts Referencing Nature-dependent Electricity Amendments to IFRS 9 and
IFRS 7
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of
Financial Statements. The objective of IFRS 18 is to set out requirements for
the presentation and disclosure of information in the financial statements to
help ensure they provide relevant information that faithfully represents an
entity's assets, liabilities, equity, income and expenses. Retrospective
application of the standard is mandatory for annual reporting periods starting
from 1 January 2027 onwards, but earlier application is permitted provided
that this fact is disclosed. The Company is currently working to identify all
impacts the standard will have on the primary financial statements and notes
to the financial statements.
4. Segment Information
For management purposes, the Group is organised into the following operating
segments as follows:
listed and observable portfolio companies, private large portfolio companies,
private emerging and other portfolio companies, and corporate centre.
Listed and observable portfolio companies segment
Lion Finance Group - the Group has a significant investment in London Stock
Exchange premium listed Lion Finance Group PLC. GCAP does not hold voting
rights in the company.
Water Utility - As of 30 June 2025, the Group exercised the put option on 20%
interest in Water Utility business, using the pre-agreed multiple and
respectively, derecognized the balance from investment in subsidiaries in the
statement of financial position.
Private portfolio companies segment
To enhance stakeholder visibility into GCAP's private assets and streamline
the assessment of the portfolio companies, starting from the first quarter of
2025, Georgia Capital updated its NAV format and started to report its private
portfolio in two categories: a) large portfolio companies and b) emerging and
other businesses.
The information for the six months ended 30 June 2024 is presented on both the
old basis and the new basis.
4. Segment Information (continued)
Large portfolio companies segment:
The large portfolio companies are companies that are close to reaching more
than a GEL 300 million equity value. This segment includes investments in
retail (pharmacy), insurance and healthcare businesses.
Retail (Pharmacy) business consists of a retail pharmacy chain and a wholesale
business that sells pharmaceuticals and medical supplies to hospitals and
other pharmacies.
Insurance business comprises a property and casualty insurance and medical
insurance businesses, principally providing wide-scale property and casualty
and medical insurance services to corporate and retail clients.
Healthcare business comprises hospitals, clinics, and diagnostic businesses.
Hospitals' business consists of two segments: Large and Specialty Hospitals,
the leading participant in Georgia's healthcare market, offering secondary and
tertiary healthcare services; and Regional and Community Hospitals,
encompassing regional hospitals and community clinics that deliver outpatient
and essential inpatient services. Clinics & Diagnostics business consists
of polyclinics, providing outpatient diagnostic and treatment services, and a
diagnostics business, operating the largest laboratory in the entire Caucasus
region.
Emerging and Other portfolio companies' segment:
The emerging portfolio companies (Renewable Energy and Education businesses)
are companies which are currently small but have potential to emerge within
the next 3-5 years as large-scale assets valued at more than a GEL 300 million
equity value, while the other companies (Housing Development, Hospitality,
Beverages and Auto Service businesses) are those that do not offer scalable
growth potential.
Corporate Centre comprising of Georgia Capital PLC and JSC Georgia Capital.
Management monitors the fair values of its segments separately for the
purposes of making decisions about resource allocation and performance
assessment. Transactions between segments are accounted for at actual
transaction prices.
4. Segment Information (continued)
The following table presents the net asset value (NAV) of the Group's
operating segments at 30 June 2025 and the roll-forward from 1 January 2025
(new basis):
NAV Statement 1 January 1.Value 2a. Investments & Divestments 2b. Buybacks 2c. Dividends 3.Operating 4. Liquidity 30 June 2025 (unaudited)
2025
Creation Expenses Management/ FX / Other
Listed and Observable Portfolio Companies 1,609,035 838,450 (191,744) - (32,916) - - 2,222,825
Lion Finance Group 1,421,035 834,706 - - (32,916)* - - 2,222,825
Water Utility 188,000 3,744 (191,744) - - - - -
Private Portfolio Companies 2,152,455 175,910 12,692 - (24,789) - 3,159 2,319,427
Large Portfolio Companies 1,557,951 227,126 - - (23,816) - 1,873 1,763,134
Retail (Pharmacy) 716,130 108,285 - - (9,960) - 1,126 815,581
Insurance 427,945 49,373 - - (13,856) - 207 463,669
Healthcare services 413,876 69,468 - - - - 540 483,884
Emerging and other companies 594,504 (51,216) 12,692 - (973) - 1,286 556,293
Total Portfolio Value 3,761,490 1,014,360 (179,052) - (57,705) - 3,159 4,542,252
Net Debt (154,425) - 179,052 (143,229) 57,705 (11,340) (4,640) (76,877)
of which, Cash and liquid funds 278,237 - (12,692) (143,229) 57,705 (11,340) (17,933) 150,748
of which, Loans issued - - - - - - 513 513
of which, Receivable on put option exercise - - 191,744 - - - - 191,744
of which, Gross Debt (432,662) - - - - - 12,780 (419,882)
Net other assets/ (liabilities) 1,948 - - (616) - (7,640) 4,144 (2,164)
Net Asset Value 3,609,013 1,014,360 - (143,845) - (18,980) 2,663 4,463,211
4. Segment Information (continued)
The following table presents the net asset value (NAV) of the Group's
operating segments at 30 June 2024 and the roll-forward from 1 January 2024
(new basis):
NAV Statement 1 January 1.Value 2a. Investments & Divestments 2b. Buybacks 2c. Dividends 3.Operating 4. Liquidity 30 June 2024 (unaudited)
2024
Creation Expenses Management/ FX / Other
Listed and Observable Portfolio Companies 1,384,847 65,899 - - (25,932) - - 1,424,814
Lion Finance Group 1,225,847 69,899 - - (25,932)* - - 1,269,814
Water Utility 159,000 (4,000) - - - - - 155,000
Private Portfolio Companies 2,287,098 (206,477) 6,068 - (24,375) - 4,872 2,067,186
Large Portfolio Companies 1,546,992 (169,816) - - (19,757) - 2,212 1,359,631
Retail (Pharmacy) 714,001 (85,351) - - (10,048) - 719 619,321
Insurance 377,874 22,677 - - (9,709) - 615 391,457
Healthcare services 455,117 (107,142) - - - - 878 348,853
Emerging and other companies 740,106 (36,661) 6,068 - (4,618) - 2,660 707,555
Total Portfolio Value 3,671,945 (140,578) 6,068 - (50,307) - 4,872 3,492,000
Net Debt (296,808) - (6,068) (48,123) 46,721 (11,585) (34,761) (350,624)
of which, Cash and liquid funds 107,910 - (6,068) (48,123) 46,721 (11,585) (18,245) 70,610
of which, Loans issued 9,212 - - - - - 2,192 11,404
of which, Gross Debt (413,930) - - - - - (18,708) (432,638)
Net other assets/ (liabilities) 3,375 - - (1,887) 3,586 (7,087) 1,358 (655)
Net Asset Value 3,378,512 (140,578) - (50,010) - (18,672) (28,531) 3,140,721
1.Value Creation - measures the annual shareholder return on each portfolio
company for Georgia Capital. It is the aggregation of a) the change in
beginning and ending fair values, b) dividend income during the year. The net
result is then adjusted to remove capital injections (if any) to arrive at the
total value creation / investment return; 2a.Investments and Divestments -
represents capital injections and divestments in portfolio companies made by
JSC GCAP; 2b. Buybacks - represent buybacks made by GCAP PLC and JSC GCAP in
order to satisfy share compensation of executives and purchases under buyback
program announced by GCAP PLC; 2c.Dividends - represent dividends received
from portfolio companies by JSC GCAP; 3.Operating Expenses - holding company
aggregated operating expenses of GCAP PLC and JSC GCAP; 4.Liquidity
Management/FX/Other - holding company aggregated movements of GCAP PLC and JSC
GCAP related to liquidity management, foreign exchange movement, non-recurring
and other.
2. Net debt and Net other assets/(liabilities) represent corporate centre.
* In segment information, dividend income includes consideration received as a
result of participation in the Lion Finance Group buyback programme.
4. Segment Information (continued)
The following table presents the NAV statement of the Group's operating
segments at at 30 June 2024 and the roll-forward from 1 January 2024 (old
basis):
NAV Statement 1 January 1.Value 2a. Investments & Divestments 2b. Buybacks 2c. Dividends 3.Operating 4. Liquidity 30 June 2024 (unaudited)
2024
Creation Expenses Management/ FX / Other
Listed and Observable Portfolio Companies 1,384,847 65,899 - - (25,932) - - 1,424,814
Lion Finance Group 1,225,847 69,899 - - (25,932)* - - 1,269,814
Water Utility 159,000 (4,000) - - - - - 155,000
Private Portfolio Companies 2,287,098 (206,477) 6,068 - (24,375) - 4,872 2,067,186
Large Portfolio Companies 1,436,231 (166,705) - - (19,757) - 2,053 1,251,822
Retail (Pharmacy) 714,001 (85,351) - - (10,048) - 719 619,321
Hospitals 344,356 (104,031) - - - - 719 241,044
Insurance (P&C and Medical) 377,874 22,677 - - (9,709) - 615 391,457
Of which, P&C Insurance 285,566 19,076 - - (9,709) - 615 295,548
Of which, Medical Insurance 92,308 3,601 - - - - - 95,909
Investment Stage Portfolio Companies 566,614 (23,494) 3,068 - - - 1,138 547,326
Clinics and diagnostics 110,761 (3,111) - - - - 159 107,809
Renewable energy 266,627 (24,203) 3,068 - - - 674 246,166
Education 189,226 3,820 - - - - 305 193,351
Other Portfolio Companies 284,253 (16,278) 3,000 - (4,618) - 1,681 268,038
Total Portfolio Value 3,671,945 (140,578) 6,068 - (50,307) - 4,872 3,492,000
Net Debt (296,808) - (6,068) (48,123) 46,721 (11,585) (34,761) (350,624)
of which, Cash and liquid funds 107,910 - (6,068) (48,123) 46,721 (11,585) (18,245) 70,610
of which, Loans issued 9,212 - - - - - 2,192 11,404
of which, Gross Debt (413,930) - - - - - (18,708) (432,638)
Net other assets/ (liabilities) 3,375 - - (1,887) 3,586 (7,087) 1,358 (655)
Net Asset Value 3,378,512 (140,578) - (50,010) - (18,672) (28,531) 3,140,721
4. Segment Information (continued)
Reconciliation to IFRS financial statements:
30 June 2025 (unaudited)
Georgia Capital PLC Aggregation with JSC Georgia Capital* Elimination of double effect on investments Aggregated Holding Company Reclassifications** NAV Statement
Cash and cash equivalents 2,748 126,593 - 129,341 (129,341) -
Amounts due from credit institutions - 5,025 - 5,025 (5,025) -
Marketable securities - 11,458 - 11,458 (11,458) -
Prepayments 1,356 - - 1,356 (1,356) -
Loans issued - 513 - 513 (513) -
Other assets, net - 196,888 - 196,888 (196,888) -
Equity investments at fair value 4,462,138 4,495,969 (4,415,855) 4,542,252 - 4,542,252
Total assets 4,466,242 4,836,446 (4,415,855) 4,886,833 (344,581) 4,542,252
Debt securities issued - 414,958 - 414,958 (414,958) -
Other liabilities 3,031 5,633 - 8,664 (8,664) -
Total liabilities 3,031 420,591 - 423,622 (423,622) -
Net Debt - - - - (76,877) (76,877)
of which, Cash and liquid funds - - - - 150,748 150,748
of which, Loans issued - - - - 513 513
of which, Receivable on put option exercise - - - - 191,744 191,744
of which, Gross Debt - - - - (419,882) (419,882)
Net other assets/ (liabilities) - - - - (2,164) (2,164)
Total equity/NAV 4,463,211 4,415,855 (4,415,855) 4,463,211 - 4,463,211
30 June 2024 (unaudited)
Georgia Capital PLC Aggregation with JSC Georgia Capital* Elimination of double effect on investments Aggregated Holding Company Reclassifications** NAV Statement
Cash and cash equivalents 1,442 40,955 - 42,397 (42,397) -
Marketable securities - 28,213 - 28,213 (28,213) -
Prepayments 1,071 - - 1,071 (1,071) -
Loans issued - 11,404 - 11,404 (11,404) -
Other assets, net - 6,704 - 6,704 (6,704) -
Equity investments at fair value 3,141,607 3,492,000 (3,141,607) 3,492,000 - 3,492,000
Total assets 3,144,120 3,579,276 (3,141,607) 3,581,789 (89,789) 3,492,000
Debt securities issued - 432,638 - 432,638 (432,638) -
Other liabilities 3,399 5,031 - 8,430 (8,430) -
Total liabilities 3,399 437,669 - 441,068 (441,068) -
Net Debt - - - - (350,624) (350,624)
of which, Cash and liquid funds - - - - 70,610 70,610
of which, Loans issued - - - - 11,404 11,404
of which, Gross Debt - - - - (432,638) (432,638)
Net other assets/ (liabilities) - - - - (655) (655)
Total equity/NAV 3,140,721 3,141,607 (3,141,607) 3,140,721 - 3,140,721
* For a detailed breakdown of JSC Georgia Capital refer to note 7.
** Reclassification and adjustments to aggregated balances to arrive at the
NAV specific presentation, such as: aggregating cash, marketable securities,
repurchased GCAP bonds as cash and liquid funds, debt securities issued as
gross debt and netting of other assets and liabilities.
4. Segment Information (continued)
The following table presents income statement information of the Group's
operating segments for the six months ended 30 June 2025 (unaudited, new
basis):
Private Portfolio Companies
Listed & observable Portfolio Companies Large Emerging and other Corporate Total Intragroup Investment Reversal and Adjustments Equity Changes in JSC GCAP Investment Entity
Center
Total
Gains/(losses) on investments at fair value 805,534 203,310 (52,189) - 956,655 33,864 (34,654) 955,865
Listed and observable Investments 805,534 - - - 805,534 (805,534) - -
Private Investments - 203,310 (52,189) - 151,121 839,398 (34,654) 955,865
Dividend income 32,916 23,816 973 - 57,705 (57,705) 37,559 37,559
Interest income - - - 4,637 4,637 (4,597) - 40
Gain on liquid funds - - - 73 73 (73) - -
Gross investment profit/(loss) 838,450 227,126 (51,216) 4,710 1,019,070 (28,511) 2,905 993,464
Administrative expenses - - - (6,004) (6,004) 3,373 - (2,631)
Salaries and other employee benefits - - - (12,975) (12,975) 12,168 - (807)
Interest expense - - - (18,026) (18,026) 18,026 - -
Profit/(loss) before provisions, foreign exchange and non-recurring items 838,450 227,126 (51,216) (32,295) 982,065 5,056 2,905 990,026
Expected credit loss reversal - - - 214 214 (214) - -
Net foreign currency gain - - - 11,217 11,217 (9,591) - 1,626
Non-recurring expense - - - (4,749) (4,749) 4,749 - -
Net losses from investment securities measured at FVPL - - - - - - - -
Profit/(loss) before income taxes 838,450 227,126 (51,216) (25,613) 988,747 - 2,905 991,652
Income tax - - - - - - - -
Profit/(loss) for the period 838,450 227,126 (51,216) (25,613) 988,747 - 2,905 991,652
4. Segment Information (continued)
The following table presents income statement information of the Group's
operating segments for the six months ended 30 June 2024 (unaudited, new
basis):
Private Portfolio Companies
Listed & observable Portfolio Companies Large Emerging and other Corporate Total Intragroup Investment Reversal and Adjustments Equity Changes in JSC GCAP Investment Entity
Center
Total
Gains/(losses) on investments at fair value 39,967 (189,573) (41,279) - (190,885) (1,235) (29,684) (221,804)
Listed and observable Investments 39,967 - - - 39,967 (39,967) - -
Private Investments - (189,573) (41,279) - (230,852) 38,732 (29,684) (221,804)
Dividend income 25,932 19,757 4,618 - 50,307 (50,307) 32,841 32,841
Interest income - - - 3,320 3,320 (3,320) - -
Loss on liquid funds - - - (961) (961) 961 - -
Gross investment profit/(loss) 65,899 (169,816) (36,661) 2,359 (138,219) (53,901) 3,157 (188,963)
Administrative expenses - - - (5,757) (5,757) 3,658 - (2,099)
Salaries and other employee benefits - - - (12,915) (12,915) 11,831 - (1,084)
Interest expense - - - (17,579) (17,579) 17,579 - -
Profit/(loss) before provisions, foreign exchange and non-recurring items 65,899 (169,816) (36,661) (33,892) (174,470) (20,833) 3,157 (192,146)
Expected credit loss charge - - - (3,378) (3,378) 3,378 - -
Net foreign currency loss - - - (15,942) (15,942) 15,899 - (43)
Non-recurring expense - - - (1,668) (1,668) 1,668 - -
Net losses from investment securities measured at FVPL - - - - - (112) - (112)
Profit/(loss) before income taxes 65,899 (169,816) (36,661) (54,880) (195,458) - 3,157 (192,301)
Income tax - - - - - - - -
Profit/(loss) for the period 65,899 (169,816) (36,661) (54,880) (195,458) - 3,157 (192,301)
4. Segment Information (continued)
The following table presents income statement information of the Group's
operating segments for the six months ended 30 June 2024 (unaudited, old
basis):
Private Portfolio Companies
Listed & observable Portfolio Companies Large Investment Stage Other Corporate Total Intragroup Investment Reversal and Adjustments Equity Changes in JSC GCAP Investment Entity
Center
Total
Gains/(losses) on investments at fair value 39,967 (186,462) (23,494) (20,896) - (190,885) (1,235) (29,684) (221,804)
Listed and observable Investments 39,967 - - - - 39,967 (39,967) - -
Private Investments - (186,462) (23,494) (20,896) - (230,852) 38,732 (29,684) (221,804)
Dividend income 25,932 19,757 - 4,618 - 50,307 (50,307) 32,841 32,841
Interest income - - - - 3,320 3,320 (3,320) - -
Loss on liquid funds - - - - (961) (961) 961 - -
Gross investment profit/(loss) 65,899 (166,705) (23,494) (16,278) 2,359 (138,219) (53,901) 3,157 (188,963)
Administrative expenses - - - - (5,757) (5,757) 3,658 - (2,099)
Salaries and other employee benefits - - - - (12,915) (12,915) 11,831 - (1,084)
Interest expense - - - - (17,579) (17,579) 17,579 - -
Profit/(loss) before provisions, foreign exchange and non-recurring items 65,899 (166,705) (23,494) (16,278) (33,892) (174,470) (20,833) 3,157 (192,146)
Expected credit loss charge - - - - (3,378) (3,378) 3,378 - -
Net foreign currency loss - - - - (15,942) (15,942) 15,899 - (43)
Non-recurring expense - - - - (1,668) (1,668) 1,668 - -
Net losses from investment securities measured at FVPL - - - - - - (112) - (112)
Profit/(loss) before income taxes 65,899 (166,705) (23,494) (16,278) (54,880) (195,458) - 3,157 (192,301)
Income tax - - - - - - - - -
Profit/(loss) for the period 65,899 (166,705) (23,494) (16,278) (54,880) (195,458) - 3,157 (192,301)
5. Equity Investments at Fair Value
30 June 2025 (unaudited) 31 December 2024
Subsidiaries (Note 7) 4,462,138 3,606,400
of which JSC GCAP 4,415,855 3,564,981
of which GBH Limited 46,283 41,419
Equity Investments at Fair Value 4,462,138 3,606,400
2025 2024
At 1 January 3,606,400 3,363,411
Fair Value gain/(loss) and dividend income 993,424 (188,963)
Dividend income* (37,559) (32,841)
Net capital redemption/injection** (100,127) -
At 30 June (unaudited) 4,462,138 3,141,607
* During six months ended 30 June 2025 JSC Georgia Capital paid dividend to
its 100% shareholder in the amount of GEL 37,559 (30 June 2024: GEL 32,841).
** During six months ended 30 June 2025, JSC GCAP made a capital
reduction/injection to its 100% shareholder with total consideration of GEL
100,195 (30 June 2024: nil).
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.
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. For the breakdown and detailed
information regarding the equity investments at fair value, refer to note 7.
6. Equity
Share capital
As at 30 June 2024 issued share capital comprised 36,917,357 authorised common
shares (30 June 2024: 42,013,685), of which 36,917,357 (30 June 2024:
42,013,685) were fully paid. Each share has a nominal value of one British
penny. Shares issued and outstanding as at 30 June 2025 and 30 June 2024 are
described below:
Number Amount
of shares
Ordinary
1 January 2025 39,559,135 1,300
Cancellation of shares (2,641,778) (87)
30 June 2025 (unaudited) 36,917,357 1,213
Number Amount
of shares
Ordinary
1 January 2024 43,215,840 1,420
Cancellation of shares (1,202,155) (39)
30 June 2024 (unaudited) 42,013,685 1,381
6. Equity (continued)
Treasury Shares
During six months ended 30 June 2025, the Company paid cash consideration of
GEL 43,535 (30 June 2024: GEL 43,535) for acquisition of treasury shares, of
which GEL 304 (30 June 2024: GEL 304) was related to shares acquired for
settlement of employee share-based payments and GEL 43,231 (30 June 2024: GEL
43,231) were other acquisitions made by the Company, including those under the
share buyback programme.
During the six months ended 30 June 2024 1,202,155 treasury shares bought back
under the Buyback Program were cancelled (30 June 2023: 1,000,000).
Earnings/(loss) per share
30 June 2025 (unaudited) 30 June 2024 (unaudited)
Basic earnings/(loss) per share
Profit/(loss) for the period attributable to ordinary shareholders of the 991,652 (192,301)
parent
Weighted average number of ordinary shares outstanding during the period 34,298,711 38,483,498
Earnings/(loss) per share (GEL) 28.9122 (4.9970)
Diluted earnings/(loss) per share
Profit/(loss) for the period attributable to ordinary shareholders of the (192,301)
Group
991,652
Weighted average number of diluted ordinary shares outstanding during the 34,948,046 38,483,498
period
Diluted earnings/(loss) per share (GEL) 28.3750 (4.9970)
7. Fair Value Measurements
Fair value hierarchy
For the purpose of fair value disclosures, the Company has determined classes
of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability. The following tables show analysis of assets
and liabilities measured at fair value or for which fair values are disclosed
by level of the fair value hierarchy:
30 June 2025 (unaudited) Level 1 Level 2 Level 3 Total
Assets measured at fair value
Equity investments at fair value - - 4,462,138 4,462,138
31 December 2024 Level 1 Level 2 Level 3 Total
Assets measured at fair value
Equity investments at fair value - - 3,606,400 3,606,400
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.
7. Fair Value Measurement (continued)
Valuation techniques (continued)
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 investment in subsidiary 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 30 June 2025 and 31
December 2024 is as follows:
30 June 2025 31 December 2024
(unaudited)
Assets
Cash and cash equivalents 126,593 167,801
Amounts due from credit institutions 5,025 98,844
Marketable securities 11,458 7,869
Equity investments at fair value 4,495,969 3,720,071
Of which listed and observable investments 2,222,825 1,609,035
Lion Finance Group 2,222,825 1,421,035
Water utility - 188,000
Of which private investments: 2,273,144 2,111,036
Large portfolio companies 1,763,134 1,557,951
Retail (Pharmacy) 815,581 716,130
Insurance 463,669 427,945
Healthcare services 483,884 413,876
Emerging and other companies 510,010 553,085
Loans issued 513 -
Other assets 196,888 5,017
Total assets 4,836,446 3,999,602
Liabilities
Debt securities issued 414,958 432,460
Other liabilities 5,633 2,161
Total liabilities 420,591 434,621
Net Asset Value 4,415,855 3,564,981
7. Fair Value Measurement (continued)
Valuation techniques (continued)
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 substantially identical to those described below for
the other portfolio companies). The principal method for valuing the
investments is using the income approach, cross-check with the market
approach. Starting from 2025, the valuation methodology has been revised from
a weighted approach incorporating multiple valuation methods, as used in
previous reporting periods. This change did not have a material impact on the
investment values, as the income approach had been heavily weighted under the
prior methodology as well. Management selects what is considered to be the
most appropriate point in the provided fair value range at the reporting date.
Emerging and other portfolio companies - Emerging private portfolio's fair
value assessment is performed by an independent third-party valuation firm 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 principal method for valuing the
investments is using the income approach, cross-checked with 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.
7. Fair Value Measurement (continued)
Valuation techniques (continued)
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.
7. Fair Value Measurement (continued)
Valuation techniques (continued)
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
emerging private portfolio companies as well. As of 30 June 2025, such
businesses include Retail (Pharmacy), Insurance (consisting of a. P&C
insurance and b. medical insurance), Healthcare (hospitals and clinics and
diagnostics), Renewable energy and Education. The valuation is performed by
applying several valuation methods, with primary method being income approach,
cross-checked with 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. 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 30 June 2025 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
30 June 2025, 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.
7. Fair Value Measurement (continued)
Description of significant unobservable inputs to level 3 valuations
(continued)
The following tables show descriptions of significant unobservable inputs to
level 3 valuations of equity investments:
30 June 2025 (unaudited)
Description Valuation technique Unobservable input Range* [implied multiple**] Fair value
Loans Issued DCF Discount rate 18.0% 513
Equity investments at fair value
Large portfolio 1,763,134
Retail (Pharmacy) DCF, EV/EBITDA EV/EBITDA multiple 4.5x-14.9x 815,581
8.2x
Insurance DCF, P/E P/E multiple 4.4x-13.7x 463,669
9.8x
Healthcare services DCF, EV/EBITDA EV/EBITDA multiple 5.0x-16.9x 483,884
9.9x
Emerging and other companies Sum of the parts EV/EBITDA multiples 3.4x-21.5x 556,293
7.2x-14.8x
Cashflow probability 90%-100%
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 1,557,951
Retail (Pharmacy) DCF, EV/EBITDA EV/EBITDA multiple 5.4x-15.6x 716,130
8.4x
Insurance DCF, P/E P/E multiple 5.6x-14.1x 427,945
11.1x
Healthcare services DCF, EV/EBITDA EV/EBITDA multiple 4.8x-12.9x 413,876
10.5x
Emerging and other companies Sum of the parts EV/EBITDA multiples 4.3x-25.4x 594,504
8.0x-12.8x
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.
7. Fair Value Measurement (continued)
Description of significant unobservable inputs to level 3 valuations
(continued)
On 31 December 2021, Georgia Capital signed a SPA to dispose 80% interest in
Water Utility business, which was previously included within the large private
portfolio companies As at 30 June 2024 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. As of 30 June 2025, Georgia Capital exercised the put option
granted under the contract, using the pre-agreed multiple. The water utility
business has been derecognized from listed and observable businesses and
respective receivable has been recognized in the statement of financial
position.
In April 2024, Georgia Capital signed an agreement to acquire a portfolio of
insurance contracts and the brand name from "Ardi". As of 30 June 2025, the
overall valuation of the medical insurance business includes Ardi's portfolio,
previously valued at recent acquisition price.
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 PLC 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 PLC 20% holding. The put option granted to GCAP
PLC 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 2028, 2029 and 2030. The transaction has
been completed and net proceeds of c.USD 63.0 million has been received by 31
December 2024.
In March 2025, one of the minority shareholders of Georgia Capital's schools
in affordable segment exercised put option over the 5% minority interest in
the school according to the terms described in initial SPA. As a result,
Georgia Capital's ownership in the school increased from 80% to 85%.
As at 30 June 2025, several portfolio companies (hospitals, clinics and
P&C insurance, together the "Defendants") were engaged in litigation with
the former shareholders of Insurance Company Imedi L who allege that they sold
their 66% shares in Imedi L to the Defendants under duress at a price below
market value in 2012. Since the outset, the 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
later overruled and, upon reconsideration, the First Instance Court partially
satisfied the claim and ruled that USD 12.7 million principal amount plus an
annual 5% interest charge as lost income (c.USD 21 million in total) should be
paid by the Defendants. The Defendants appealed the decision of the First
Instance Court. On 12 June 2025, the Appellate Court ruled in favour of the
claimants and upheld their claim, ordering the Defendants to pay a principal
amount of USD 12.7 million plus annual interest of 5% as compensation for lost
income (approximately USD 21 million in total). On 29 July 2025, the
Defendants appealed the decision of the Appellate Court to the Supreme Court.
The Defendants continue to believe that their position is legally correct.
While the decision of the Appellate Court is a setback and increases the risk,
defendants will continue to vigorously defend their position at the Supreme
Court.
As at 30 June 2025, 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 0.3 million 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 USD 15.5 million, termination of the MoU, 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. In particular, GEG's
position is that it is the minority partner who failed to honour investment
commitments under the MoU. 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.
7. Fair Value Measurement (continued)
Description of significant unobservable inputs to level 3 valuations
(continued)
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 million derived by
utilising the single rate across all the alleged participants. The retail
(pharmacy) business has appealed the Agency's decision in court and plans to
vigorously defend its position. No date of hearing has been set yet.
Sensitivity analysis to significant changes in unobservable inputs within
Level 3 hierarchy
In order to determine reasonably possible alternative assumptions the Company
adjusted key unobservable model inputs. The Company adjusted the inputs used
in valuation by increasing and decreasing them within a range which is
considered by the Company to be reasonable.
If the listed peer multiples used in the market approach to value unquoted
investments as at 30 June 2025 decreased by 10% (31 December 2024: 10%), value
of equity investments at fair value would decrease by GEL 16 million or 0.3%
(31 December 2024: GEL 58 million or 2%). If the multiple increased by 10% (31
December 2024: 10%) then the equity investments at fair value would increase
by GEL 16 million or 0.3% (31 December 2024: GEL 58 million or 2%).
If the discount rates used in the income approach to value unquoted
investments decreased by 50 basis points (31 December 2024: 50 basis points),
the value of equity investments at fair value would increase by GEL 122
million or 3% (31 December 2024: GEL 74 million or 2%). If the discount rates
increased by 50 basis points (31 December 2024: 50 basis points) then the
equity investments at fair value would decrease by GEL 111 million or 2% (31
December 2024: GEL 85 million or 2%). If the discount rate decreased by 100
basis points, the value of equity investments at fair value would increase by
GEL 252 million or 6% (31 December 2024: GEL 162 million or 4%). If the
discount rate increased by 100 basis points then the equity investments at
fair value would decrease by GEL 218 million or 5% (31 December 2024: GEL 158
million or 4%).
If the multiple used to value unquoted investments valued on NAV and recent
transaction price basis as at 30 June 2025 decreased by 10% (31 December 2024:
10%), value of equity investments at fair value would decrease by GEL 8
million or 0.2% (31 December 2024: GEL 8 million or 0.2%). If the multiple
increased by 10% then the equity investments at fair value would increase by
GEL 8 million or 0.2% (31 December 2024: GEL 8 million or 0.2%).
As set out in the description of significant unobservable inputs to level 3
valuations the valuations have been prepared on the basis that climate change
risks are reflected in the peer multiples and discount rates. Therefore, the
sensitivities noted above in respect of peer multiples and discount rates
include the risk arising from climate change.
Movements in level 3 financial instruments measured at fair value
The following tables show a reconciliation of the opening and closing amounts
of level 3 financial assets which are recorded at fair value:
At 1 January Fair Value gain Capital redemption/injection Capital increase At 31 December Fair Value gain Capital redemption/injection Dividend Income At 30 June
2024 2024 2025
(unaudited)
Level 3 financial assets
Equity investments at fair value (Note 5) 3,363,411 368,098 - (125,109) 3,606,400 993,424 (100,127) (37,559) 4,462,138
8. Maturity Analysis
The table below shows an analysis of assets and liabilities analysed according
to when they are expected to be recovered or settled:
30 June 2025 (unaudited)
Less than More than Total
1 Year
1 Year
Cash and cash equivalents 2,748 - 2,748
Equity investments at fair value - 4,462,138 4,462,138
Prepayments 1,356 - 1,356
Total assets 4,104 4,462,138 4,466,242
Other liabilities 3,031 - 3,031
Total liabilities 3,031 - 3,031
Net 1,073 4,462,138 4,463,211
31 December 2024
Less than More than Total
1 Year
1 Year
Cash and cash equivalents 3,521 - 3,521
Equity investments at fair value - 3,606,400 3,606,400
Prepayments 1,396 - 1,396
Total assets 4,917 3,606,400 3,611,317
Other liabilities 2,304 - 2,304
Total liabilities 2,304 - 2,304
Net 2,613 3,606,400 3,609,013
9. Related Party Disclosures
In accordance with IAS 24 "Related Party Disclosures", parties are considered
to be related if one party has the ability to control the other party or
exercise significant influence over the other party in making financial or
operational decisions. In considering each possible related party
relationship, attention is directed to the substance of the relationship, not
merely the legal form.
Related parties may enter into transactions which unrelated parties might not,
and transactions between related parties may not be effected on the same
terms, conditions and amounts as transactions between unrelated parties. All
transactions with related parties are conducted on an arm's length basis.
There were no related party transactions as of and for the periods ended 30
June 2025 and 30 June 2024, other than dividend received and capital
redemption/injection from JSC GCAP (note 5), and compensation of key
management personnel disclosed below:
Compensation of key management personnel comprised the following:
30 June 2025 30 June 2024 (unaudited)
(unaudited)
Salaries and other benefits (380) (370)
Share-based payments compensation (2,885) (2,728)
Total key management compensation (3,265) (3,098)
Key management personnel do not receive cash settled compensation, except for
fixed salaries. The number of key management personnel for the six months
ended 30 June 2025 was 5 (30 June 2024: 5).
10. Events after the Reporting Period
Increase to the share buyback programme
On 2 July 2025, JSC Georgia Capital, wholly owned by Georgia Capital PLC,
announced an increase of USD 18 million to its existing USD 50 million share
buyback and cancellation programme.
Subsequent to the reporting date, GCAP repurchased an additional 385,000
shares for a total consideration of GEL 29.4 million.
Receipt of Water Utility put option proceeds
On 29 July 2025, JSC Georgia Capital, wholly owned by Georgia Capital PLC,
successfully received USD 70.4 million cash proceeds (GEL 190.5 million) from
the exercise of its put option, related to 20% equity stake in the water
utility business.
Receipt of final dividend and decrease in ownership of Lion Finance Group PLC
On 18 July 2025, JSC Georgia Capital, wholly owned by Georgia Capital PLC,
received a final dividend of GEL 47.2 million from Lion Finance Group PLC in
respect of the financial year ended 31 December 2024.
Subsequent to the reporting date, the Group's ownership interest in Lion
Finance Group PLC decreased to 18.1% following on-market sales.
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 healthcare services business (hospitals and clinics and
diagnostics). Georgia Capital also holds other small private businesses across
different industries in Georgia, as well as a 19.1% equity stake as at
30-Jun-25 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 this document and in Georgia Capital PLC's Annual
Report and Accounts 2024. 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 30 June 2025, 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, 30 June 2025. 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
19(th) Floor
51 Lime Street
London, EC3M 7DQ
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 (#_ftnref1) See "Basis of Presentation" for more background on page 18.
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 (#_ftnref2) Please see definition in glossary on page 18.
(( 3 (#_ftnref3) )) Includes GEL 191.7 million receivable on the water
utility put option exercise.
4 (#_ftnref4) Includes both the buybacks under the share buyback and
cancellation programme and for the management trust.
5 (#_ftnref5) Includes both cash and buyback dividends.
6 (#_ftnref6) Private portfolio companies' performance highlights are
presented excluding beer and distribution businesses. Aggregated numbers are
presented like-for-like basis. Large portfolio figures include the updated
presentation format of the healthcare services business (comparative periods
have been adjusted retrospectively).
7 (#_ftnref7) The results of our five businesses included in the emerging
and other portfolio (described on page 16) are not broken out separately.
Performance totals, however, include the emerging and other portfolio
companies' results.
8 (#_ftnref8) The programme covers capital returns through share buybacks,
dividends and potential paydowns of up to US$ 150 million of GCAP's existing
sustainability-linked local bonds.
9 (#_ftnref9) Determined by taking into account the peak number of 47.9
million shares issued as of 31-Dec-20.
10 (#_ftnref10) A non-U.S. corporation will be classified as a PFIC for U.S.
federal income tax purposes in any taxable year in which, after applying
certain look-through rules, either (1) at least 75 percent of its gross income
is "passive income" or (2) at least 50 percent of the quarterly average value
of its gross consolidated assets is attributable to assets that produce
passive income or are held for the production of passive income.
11 (#_ftnref11) Please see definition in glossary on page 18.
12 (#_ftnref12) 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.
13 (#_ftnref13) Change in the fair value attributable to the change in
valuation multiples and the effect of exchange rate movement on net debt.
14 (#_ftnref14) Please read more about valuation methodology on page 18 in
"Basis of presentation".
(( 15 (#_ftnref15) )) Multiples as of 31-Mar-25 and 31-Dec-24 have been
adjusted to reflect the impact of Ardi's acquisition. Excluding this effect,
the implied LTM P/E valuation multiple stood at 11.1x in both periods.
16 (#_ftnref16) Investments are made at JSC Georgia Capital level, the
Georgian holding company.
17 (#_ftnref17) Please see definition in glossary on page 18.
18 (#_ftnref18) 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.
19 (#_ftnref19) Change in the fair value attributable to the change in
valuation multiples and the effect of exchange rate movement on net debt.
20 (#_ftnref20) Investments are made at JSC Georgia Capital level, the
Georgian holding company.
21 (#_ftnref21) Includes expenses such as external audit fees, legal
counsel, corporate secretary and other similar administrative costs.
22 (#_ftnref22) Cash-based management expenses are cash salary and cash
bonuses paid/accrued for staff and management compensation.
23 (#_ftnref23) Share-based management expenses are share salary and share
bonus expenses of management and staff.
24 (#_ftnref24) Fund type expenses include expenses such as audit and
valuation fees, fees for legal advisors, Board compensation and corporate
secretary costs.
25 (#_ftnref25) Management fee is the sum of cash-based and share-based
operating expenses (excluding fund-type costs).
26 (#_ftnref26) 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) .
27 (#_ftnref27) Of which - cash outflow on capex of GEL 5.9 million in 2Q25
and GEL 10.4 million in 1H25 (GEL 6.2 million in 2Q24 and GEL 12.5 million in
1H24); proceeds from sale of assets of GEL 0.3 million in 2Q25 and GEL 1.1
million in 1H25 (GEL 0.4 million in 2Q24 and 1H24); cash outflow on minority
acquisition of GEL 1.0 million in 2Q25 and 1H25.
28 (#_ftnref28) Calculated by deducting capex and minority acquisition from
operating cash flows and adding proceeds from the sale of PPE/IP.
(( 29 (#_ftnref29) )) Figures take into account the application of the
minority buyout agreement.
30 (#_ftnref30) 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) .
31 (#_ftnref31) Calculated based on average equity, adjusted for preferred
shares.
(( 32 (#_ftnref32) )) Numbers reflect the revised presentation format of the
healthcare services business, implemented in 1Q25.
33 (#_ftnref33) 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) .
34 (#_ftnref34) Net revenue - Gross revenue less corrections and rebates.
Margins are calculated from gross revenue.
35 (#_ftnref35) Of which - capex of GEL 16.9 million and 31.5 million in
2Q25 and 1H25, respectively (GEL 14.3 million and 26.5 million in 2Q24 and
1H24, respectively); proceeds from the sale of property of GEL 2.2 million in
1H25 (GEL 29.8 million in 1H24).
36 (#_ftnref36) Operating cash flows less capex, plus net proceeds from the
sale of assets.
(( 37 (#_ftnref37) )) Total figures take into account inter-business and
inter-segment eliminations and therefore do not equal the sum of the presented
components.
38 (#_ftnref38) The respective costs divided by gross revenues.
39 (#_ftnref39) Total figures take into account inter-business and
inter-segment eliminations and therefore do not equal the sum of the presented
components.
40 (#_ftnref40) Emerging and other portfolio companies' performance
highlights are presented excluding the beer and distribution business, where
GCAP has a 20% minority holding. Aggregated numbers are presented
like-for-like basis.
41 (#_ftnref41) Please see definition in glossary on page 18.
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