CGEO Georgia Capital Plc

FINANCIAL PERFORMANCE HIGHLIGHTS (IFRS)[1]

GEL '000, unless otherwise noted (unaudited)	Dec-24	Sep-24	Change	Dec-23	Change
Georgia Capital NAV overview
NAV per share, GEL	95.95	83.41	15.0%	82.94	15.7%
NAV per share, GBP	27.14	22.82	18.9%	24.23	12.0%
Net Asset Value (NAV)	3,609,013	3,194,592	13.0%	3,378,512	6.8%
Shares outstanding2	37,612,488	38,301,132	-1.8%	40,736,528	-7.7%
Cash and liquid funds	278,237	101,882	NMF	107,910	NMF
NCC ratio[2]	12.8%	15.9%	-3.1 ppts	15.6%	-2.8 ppts
Georgia Capital Performance	4Q24	4Q23	Change	FY24	FY23	Change
Total portfolio value creation	460,849	223,132	NMF	435,322	680,515	-36.0%
of which, listed and observable businesses	302,564	161,316	87.6%	368,985	553,255	-33.3%
of which, private businesses	158,285	61,816	NMF	66,337	127,260	-47.9%
Investments	9,501	2,135	NMF	16,933	22,588	-25.0%
Divestments	(168,037)	-	NMF	(168,037)	(4,168)	NMF
Buybacks[3]	25,680	22,483	14.2%	136,523	76,477	78.5%
Dividend income	9,826	34,148	-71.2%	201,752	235,883	-14.5%
of which, recurring dividend income[4]	9,826	34,148	-71.2%	179,156	179,822	-0.4%
of which, one-off dividend income	-	-	NMF	22,596	56,061	-59.7%
Net income	435,588	208,305	NMF	350,324	615,589	-43.1%
Private portfolio companies' performance1,[5]	4Q24	4Q23	Change	FY24	FY23	Change
Large portfolio companies
Revenue	418,976	354,359	18.2%	1,499,308	1,337,010	12.1%
EBITDA	54,327	32,812	65.6%	180,733	153,868	17.5%
Net operating cash flow	73,567	32,603	NMF	196,045	96,671	NMF
Investment stage portfolio companies
Revenue	50,754	44,450	14.2%	186,667	155,280	20.2%
EBITDA	16,738	14,860	12.6%	64,419	51,995	23.9%
Net operating cash flow	15,816	10,399	52.1%	74,321	50,609	46.9%
Total portfolio[6]
Revenue	595,008	547,088	8.8%	2,250,715	2,067,648	8.9%
EBITDA	84,325	55,009	53.3%	310,903	248,647	25.0%
Net operating cash flow	84,005	35,925	NMF	298,519	139,391	NMF

KEY POINTS

Ø NAV per share (GEL) increased 15.0% in 4Q24, reflecting the excellent operating performance of our portfolio companies

Ø Outstanding quarterly results across our private portfolio with an 8.8% and 53.3% y-o-y increase in aggregated revenues and EBITDA in 4Q24, respectively, leading to a more than doubling of net operating cash flow

Ø NCC ratio improved by 3.1 ppts q-o-q to 12.8% as at 31-Dec-24 (2.8 ppts improvement y-o-y), despite the launch of the US$ 25 million share buyback programme in 4Q24, reflecting the receipt of c.US$ 63 million net proceeds from the beer and distribution business disposal and an 8.5% q-o-q increase in portfolio value

Ø Quarterly dividend income of GEL 9.8 million in 4Q24, contributing to FY24 total recurring dividend income to GEL 179.2 million

Ø 1.8 million shares repurchased during 4Q24 and 1Q25 (total bought back since demerger now 12.1 million shares (US$ 143 million cost), representing 25.3[7]% of GCAP's peak issued share capital)

 

Conference call: An investor/analyst conference call will be held on 24-FEB-2025, at 15:00 UK / 16:00 CET / 10:00 US Eastern Time. Please register at the Registration Link to attend the event. Further details are available on the Group's webpage.

CHAIRMAN AND CEO'S STATEMENT

Georgia Capital's 4Q24 results demonstrate very strong operational and financial performances and reflect significant achievements in delivering on our strategic priorities.

NAV per share (GEL) increased 15.0% to GEL 95.95 in 4Q24. The increase in NAV per share (GEL) in 4Q24 reflects excellent underlying operating performances throughout the portfolio. Value creation in our listed and observable portfolio amounted to GEL 302.6 million (9.5 ppts positive impact on the NAV per share), driven by a 28.2% increase in Lion Finance Group PLC's (formerly known as Bank of Georgia Group PLC) share price in 4Q24 and GEL 28.0 million value creation in the water utility business, supported by its strong operating performance. Value creation across our private portfolio companies amounted to GEL 158.3 million (+5.0 ppts impact), reflecting the robust operating performances of our high-quality, resilient assets as detailed below. The NAV per share growth was also driven by our continuing share buyback and cancellation programme (+1.0 ppts impact), partially offset by management platform-related costs, net interest expense and the impact of foreign currency exchange rate movements on GCAP's net debt (-0.8 ppts impact in total). In GBP terms, the NAV per share growth in 4Q24 was 18.9%, further reflecting GEL's 3.4% appreciation against GBP during the quarter. Overall, throughout the six-year history of GCAP, NAV per share (GEL) has grown at a 13.7% CAGR.

Our private portfolio companies continue to deliver superior operating performance. In 4Q24, aggregated revenue was up by 8.8% y-o-y to GEL 595.0 million, while EBITDA increased by 53.3% y-o-y to GEL 84.3 million. This resulted in quarterly aggregated net operating cash flows of GEL 84.0 million, more than doubling y-o-y in 4Q24.

Ø Within our large portfolio companies, economic growth, a substantial ramp-up in the performance of the pharmacy stores launched in late 2023, and overall optimisation of the retail chain led to a 53.1% y-o-y EBITDA growth in our retail (pharmacy) business in 4Q24. Our insurance businesses also had a very strong fourth quarter, with combined pre-tax profit up 20.2% y-o-y, reflecting positive developments in both the P&C and medical insurance segments, the latter partially boosted by the acquisition of the Ardi insurance portfolio in April 2024. Within our hospitals business, the 4Q24 y-o-y EBITDA growth of 119.8% reflected the business' gradual return to normal operational levels following the completion of mandatory renovations across all hospitals, alongside increased demand for high-margin outpatient services and further improvement in cost efficiencies.

Ø Our investment stage portfolio companies also delivered strong performances in 4Q24. EBITDA in our education business grew 20.9% y-o-y, driven by organic growth from strong learner intakes, increased utilisation, and business expansion through the launch and acquisition of two new campuses last year. Our clinics and diagnostics business posted 46.0% y-o-y EBITDA growth, supported by a proactive approach to customer acquisition and service enhancements. In US$ terms, EBITDA of our renewable energy business declined by 16.9% y-o-y in 4Q24, as unfavourable weather conditions during the quarter negatively impacted electricity generation.

Ø Other businesses also demonstrated solid performances and delivered an 80.7% y-o-y increase in EBITDA in 4Q24. Growth was particularly strong in our auto services business, which paid its first-ever dividend to GCAP in 4Q24.

In FY24, our private portfolio companies posted an 8.9% y-o-y aggregated revenue growth, maintaining the same y-o-y growth rate as in FY23. Meanwhile, EBITDA in FY24 was up by 25.0% y-o-y, marking a significant increase on the 2.2% y-o-y growth in FY23. This translated into a 114.2% y-o-y growth in the aggregated net operating cash flow in FY24, following a 32.3% y-o-y decline in FY23. Details on how the operating performance of the different private portfolio businesses translated into their NAVs can be found in the pages that follow.

Completion of the beer and distribution business disposal and receipt of full sales proceeds. In October 2024, we announced that we have agreed to sell 80% of our holding (an effective 73.9% equity stake) in the beer and distribution business to Royal Swinkels, a high-quality international investor and strategic buyer. The sale is consistent with GCAP's capital-light investment strategy and represents another successful completion of the full investment cycle of our private assets, from acquisition and development to cash exit. The net sale proceeds of c.US$ 63 million were received in December 2024, significantly strengthening GCAP's liquidity position. As a result, GCAP's cash and liquid funds balance increased by 173.1% to GEL 278.2 million in 4Q24. The remaining 20% holding in the business remains subject to a put/call structure. The successful disposal of the beer and distribution business during a challenging political and geopolitical environment once again underlines the resilience of our portfolio while also marking further progress toward our strategic priority of divesting subscale portfolio companies.

NCC ratio decreased to 12.8% in 4Q24. A significant improvement in GCAP's liquidity, coupled with an 8.5% q-o-q increase in portfolio value in 4Q24, led to a 3.1 ppts improvement in the NCC ratio. On a year-on-year basis, the NCC ratio improved by 2.8 ppts, notwithstanding the substantial cash outflow for share buybacks in FY24, as well as the launch of the US$ 25 million share buyback programme in 4Q24.

Progress on share buybacks. In December, reflecting strong liquidity levels at GCAP and the reduction in the NCC ratio, we launched a US$ 25 million share buyback and cancellation programme. Since the beginning of 2024, we have now repurchased 4.7 million shares under our buyback programmes, for a total consideration of GEL 177.2 million (US$ 64.0 million). This takes the capital returned to our shareholders since demerger to a total of US$ 143 million or 12.1 million GCAP shares representing 25.3% of GCAP's issued share capital at its peak. As a result, the gross number of issued shares, including those held by the management trust, now stands at 38.4 million, below the 39.4 million shares in issue at the time of the demerger. In essence, this reflects the repurchase of more shares than we issued in 2019-2020 to purchase the then outstanding minority stake in Georgia Healthcare Group.

From a macroeconomic perspective, Georgia's economic performance remained strong in 2024, with the preliminary real GDP growth of 9.5% y-o-y. Despite the ongoing regional geopolitical volatility, robust banking loan growth, declining unemployment, and rising wages supported domestic consumption and this strong economic growth in 2024. As a result of the ongoing political uncertainty, the economic outlook points to some moderation in economic growth expectations for 2025. While inflation has remained below target levels since April 2023, recent months have seen an increase in headline inflation. During last year's pre-election period, the National Bank of Georgia (NBG) actively intervened to manage some currency uncertainty, resulting in a reduction of international reserves to US$ 4.4 billion, an 8.7% y-o-y decrease as of January 2025. The exchange rate depreciated by 4.2% y-o-y as of December 2024, reflecting this uncertainty, despite the strong underlying economic fundamentals. Meanwhile, declining remittances, due to the normalisation of money transfers from Russia, were offset by increasing revenues from exports and tourism. Foreign exchange inflows remained stable, supporting the external balance sheet. The policy stance remains appropriate, with the GEL policy rate at 8% and a strengthening fiscal position, as public debt reaches its lowest level since 2014 at 36% of GDP.

Outlook. The excellent performance of our portfolio companies, coupled with our delivery on the sale of our beer and distribution business - in line with our strategy, were the key drivers of our outstanding 4Q24 results. I am particularly pleased that we have delivered very strong levels of cash generation; made substantial progress in reducing our Net Capital Commitment ratio; and continued to focus on capital repatriation to our shareholders under the GEL 300 million capital return package, announced in May 2024. This performance was underpinned in 2024 by the resilience of the Georgian economy, which has demonstrated consistent and substantial growth in recent years despite ongoing geopolitical tensions and uncertainties. Against this background, I believe that Georgia Capital has all the key fundamentals in place to continue delivering consistent NAV per share growth over the medium to long term - and to progress further towards achieving our key strategic priorities.

 

 

Irakli Gilauri, Chairman and CEO

 

 

DISCUSSION OF GROUP RESULTS

The discussion below analyses the Group's unaudited net asset value at 31-Dec-24 and its income for the fourth quarter and full year period then ended on an IFRS basis (see "Basis of Presentation" on page 30 below).

Net Asset Value (NAV) Statement

NAV statement summarises the Group's IFRS equity value (which we refer to as Net Asset Value or NAV in the NAV Statement below) at the opening and closing dates for the fourth quarter (30-Sep-24 and 31-Dec-24). The NAV Statement below breaks down NAV into its components and provides a roll forward of the related changes between the reporting periods. For the NAV Statement for the full year of 2024 see page 30.

NAV STATEMENT 4Q24

GEL '000, unless otherwise noted (Unaudited)	Sep-24	1. Value creation[8]	2a. Investment and Divestments	2b. Buyback	2c. Dividends	3. Operating expenses	4. Liquidity/ FX/Other	Dec-24	Change %
Listed and Observable Portfolio Companies
Lion Finance Group	1,146,471	274,564	-	-	-	-	-	1,421,035	23.9%
Water Utility	160,000	28,000	-	-	-	-	-	188,000	17.5%
Total Listed and Observable Portfolio Value	1,306,471	302,564	-	-	-	-	-	1,609,035	23.2%
Listed and Observable Portfolio value change %		23.2%	0.0%	0.0%	0.0%	0.0%	0.0%	23.2%
Private Portfolio Companies
Large Companies	1,308,808	133,971	-	-	(8,848)	-	818	1,434,749	9.6%
Retail (Pharmacy)	658,174	57,596	-	-	-	-	360	716,130	8.8%
Insurance (P&C and Medical)	407,378	29,316	-	-	(8,848)	-	99	427,945	5.0%
Of which, P&C Insurance	310,325	4,190	-	-	(1,474)	-	99	313,140	0.9%
Of which, Medical Insurance	97,053	25,126	-	-	(7,374)	-	-	114,805	18.3%
Hospitals	243,256	47,059	-	-	-	-	359	290,674	19.5%
Investment Stage Companies	525,344	24,314	7,501	-	-	-	233	557,392	6.1%
Renewable Energy	239,763	5,942	6,901	-	-	-	-	252,606	5.4%
Education	181,014	(183)	600	-	-	-	153	181,584	0.3%
Clinics and Diagnostics	104,567	18,555	-	-	-	-	80	123,202	17.8%
Other Companies	327,277	-	(166,037)	-	(978)	-	52	160,314	-51.0%
Total Private Portfolio Value	2,161,429	158,285	(158,536)	-	(9,826)	-	1,103	2,152,455	-0.4%
Private Portfolio value change %		7.3%	-7.3%	0.0%	-0.5%	0.0%	0.1%	-0.4%
Total Portfolio Value (1)	3,467,900	460,849	(158,536)	-	(9,826)	-	1,103	3,761,490	8.5%
Total Portfolio value change %		13.3%	-4.6%	0.0%	-0.3%	0.0%	0.0%	8.5%
Net Debt (2)	(269,380)	-	155,936	(25,933)	9,826	(4,938)	(19,936)	(154,425)	-42.7%
of which, Cash and liquid funds	101,882	-	164,803	(25,933)	38,675	(4,938)	3,748	278,237	NMF
of which, Loans issued	11,714	-	(8,867)	-	-	-	(2,847)	-	NMF
of which, Accrued dividend income	28,849	-	-	-	(28,849)	-	-	-	NMF
of which, Gross Debt	(411,825)	-	-	-	-	-	(20,837)	(432,662)	5.1%
Net other assets/ (liabilities) (3)	(3,928)	-	2,600	253	-	(3,407)	6,430	1,948	NMF
of which, share-based comp.	-	-	-	-	-	(3,407)	3,407	-	NMF
Net Asset Value (1)+(2)+(3)	3,194,592	460,849	-	(25,680)	-	(8,345)	(12,403)	3,609,013	13.0%
NAV change %		14.4%	0.0%	-0.8%	0.0%	-0.3%	-0.4%	13.0%
Shares outstanding8	38,301,132	-	-	(688,644)	-	-	-	37,612,488	-1.8%
Net Asset Value per share, GEL	83.41	12.03	(0.00)	0.84	(0.00)	(0.22)	(0.10)	95.95	15.0%
NAV per share, GEL change %		14.4%	0.0%	1.0%	0.0%	-0.3%	-0.1%	15.0%

NAV per share (GEL) was up 15.0% q-o-q in 4Q24, reflecting a GEL 460.8 million value creation across our portfolio companies with a positive 14.4 ppts impact and share buybacks (+1.0 ppts impact). The NAV per share (GEL) growth was slightly offset by a) management platform-related costs and net interest expense (-0.5 ppts impact in total) and b) GEL's depreciation against US$, resulting in a foreign currency loss of GEL 9.2 million on GCAP net debt (-0.3 ppts impact).

 

Portfolio overview

Total portfolio value amounted to GEL 3.8 billion in 4Q24, up by GEL 293.6 million (up 8.5%) q-o-q:

·      The value of the listed and observable portfolio increased by GEL 302.6 million (up 23.2%), driven by the continued growth in Lion Finance Group's share price and GEL 28.0 million value creation in Water Utility, reflecting its strong operating performance during the quarter on the back of the increased tariffs for corporates effective from 1 January 2024.

·      The value of the private portfolio decreased by GEL 9.0 million (down 0.4%). This reflects GEL 176.2[9] million decrease from the divestment of an 80% holding in the beer and distribution business and the collection of GEL 9.8 million dividends from the private portfolio companies. The decrease was offset by GEL 158.3 million value creation and GEL 9.5 million investments in the portfolio companies.

 

Consequently, as of 31-Dec-24, the private portfolio value amounted to GEL 2.2 billion (57.2% of the total), and the listed and observable portfolio value totalled GEL 1.6 billion (42.8% of the total portfolio value).

 

1)    Value creation

Value creation from the listed and observable portfolio amounted to GEL 302.6 million in 4Q24, reflecting:

·      GEL 274.6 million value creation, driven by a 28.2% increase in Lion Finance Group's share price in 4Q24, and

·      GEL 28.0 million value creation in Water Utility, as described above.

Value creation across our private portfolio companies amounted to GEL 158.3 million in 4Q24. This reflects:

·      Strong operating performance of our private assets, delivering substantial growth in aggregated revenues (up 8.7% y-o-y) and EBITDA (up 53.3% y-o-y) in 4Q24, which translated into a GEL 277.3 million operating performance-related value creation.

·      GEL 119.0 million negative net impact from changes in implied valuation multiples and FX rates.

 

As a result, the total portfolio value creation amounted to GEL 460.8 million in 4Q24.

 

The table below summarises value creation drivers in our businesses in 4Q24:

Portfolio Businesses	Operating Performance[10]	Multiple Change and FX[11]	Value Creation
GEL '000, unless otherwise noted (unaudited)	(1)	(2)	(1)+(2)
Listed and Observable portfolio			302,564
Lion Finance Group			274,564
Water Utility			28,000
Private portfolio	277,258	(118,973)	158,285
Large Portfolio Companies	229,042	(95,071)	133,971
Retail (pharmacy)	99,736	(42,140)	57,596
Insurance (P&C and Medical)	20,579	8,737	29,316
Of which, P&C Insurance	12,337	(8,147)	4,190
Of which, Medical Insurance	8,242	16,884	25,126
Hospitals	108,727	(61,668)	47,059
Investment Stage Portfolio Companies	46,603	(22,289)	24,314
Renewable Energy	-	5,942	5,942
Education	25,558	(25,741)	(183)
Clinics and Diagnostics	21,045	(2,490)	18,555
Other	1,613	(1,613)	-
Total portfolio	277,258	(118,973)	460,849

 

Valuation overview[12]

In 4Q24, valuation assessments of our large and investment stage portfolio companies were performed by a third-party independent valuation firm, Kroll, in line with International Private Equity Valuation ("IPEV") guidelines. The independent valuation assessments, which serve as an input for Georgia Capital's estimate of fair value, were performed by applying a combination of an income approach (DCF) and a market approach (listed peer multiples and, in some cases, precedent transactions). The independent valuations of large and investment stage businesses are performed on a semi-annual basis. In line with our strategy, from time to time we may receive offers from interested buyers for our private portfolio companies, which would be considered in the overall valuation assessment, where appropriate.

We perform quarterly sensitivity analyses on our valuations. In light of prevailing market conditions, the 4Q24 assessment indicated that a 100-basis-point change in discount rates used in the income approach for valuing unquoted investments would result in a GEL c.160 million, or 4.3%, change in the fair value of equity investments.

 

The enterprise value ("EV") and equity value development of our businesses in 4Q24 is summarised in the following table:

	Enterprise Value (EV)			Equity Value
GEL '000, unless otherwise noted (Unaudited)	31-Dec-24	30-Sep-24	Change %	31-Dec-24	30-Sep-24	Change %	% share in total portfolio
Listed and Observable portfolio				1,609,035	1,306,471	23.2%	42.8%
Lion Finance Group				1,421,035	1,146,471	23.9%	37.8%
Water Utility				188,000	160,000	17.5%	5.0%
Private portfolio	3,613,737	3,390,846	6.6%	2,152,455	2,161,429	-0.4%	57.2%
Large portfolio companies	2,076,069	1,950,977	6.4%	1,434,749	1,308,808	9.6%	38.1%
Retail (pharmacy)	1,021,000	972,559	5.0%	716,130	658,174	8.8%	19.0%
Insurance (P&C and Medical)	463,144	433,910	6.7%	427,945	407,378	5.0%	11.4%
Of which, P&C Insurance	313,000	309,813	1.0%	313,140	310,325	0.9%	8.3%
Of which, Medical Insurance	150,144	124,097	21.0%	114,805	97,053	18.3%	3.1%
Hospitals	591,925	544,508	8.7%	290,674	243,256	19.5%	7.7%
Investment stage portfolio companies	865,238	811,983	6.6%	557,392	525,344	6.1%	14.8%
Renewable Energy	444,158	431,327	3.0%	252,606	239,763	5.4%	6.7%
Education[13]	234,405	209,206	12.0%	181,584	181,014	0.3%	4.8%
Clinics and Diagnostics	186,675	171,450	8.9%	123,202	104,567	17.8%	3.3%
Other	672,430	627,886	7.1%	160,314	327,277	-51.0%	4.3%
Total portfolio				3,761,490	3,467,900	8.5%	100.0%

 

Private large portfolio companies (38.1% of total portfolio value)

Retail (Pharmacy) (19.0% of total portfolio value) - The EV of Retail (Pharmacy) was up by 5.0% to GEL 1,021.0 million in 4Q24, reflecting the strong operating performance of the business. Economic growth and a substantial ramp-up of the pharmacy stores launched in late 2023 led to a 5.4% y-o-y revenue increase in 4Q24. Gross profit margin improved by 4.2 ppts y-o-y to 31.4% in 4Q24, further supported by the enhanced sales and profitability of para-pharmacy products, alongside successful renegotiations of trading terms with key suppliers across major product categories. Operating expenses were up 10.4% y-o-y in 4Q24, due to increased rent and salary costs related to the chain expansion and the launch of a new warehouse in late 2023. Consequently, 4Q24 EBITDA increased by 53.1% y-o-y to GEL 24.5 million. See page 12 for details. LTM EBITDA (incl. IFRS 16) was up 9.0% to GEL 121.0 million in 4Q24. Net debt (incl. IFRS 16) decreased by 2.9% to GEL 297.9 million as at 31-Dec-24, resulting from robust cash flow generation during the quarter. As a result, the fair value of GCAP's 97.8% holding increased by 8.8% to GEL 716.1 million in 4Q24. The implied LTM EV/EBITDA valuation multiple (incl. IFRS 16) decreased to 8.4x as of 31-Dec-24, down from 8.8x as of 30-Sep-24 and 9.7x as of 31-Dec-23.

Insurance (P&C and Medical) (11.4% of total portfolio value) - The insurance business combines: a) P&C Insurance valued at GEL 313.1 million and b) Medical Insurance valued at GEL 114.8 million.

P&C Insurance revenues were up 28.3% y-o-y to GEL 40.1 million in 4Q24, driven by the growth in the motor, agricultural and credit life insurance lines. The revenue of the medical insurance business more than doubled y-o-y and amounted to GEL 56.1 million in 4Q24, reflecting organic growth, c.10% increase in insurance policy prices and the positive impact of the acquisition of Ardi insurance portfolio in April 2024, the latter contributing GEL 24.1 million to the 4Q24 y-o-y revenue growth. The combined ratio for P&C insurance was up by 0.9 ppts y-o-y in 4Q24, mainly due to higher motor insurance claims in the corporate client segment. The combined ratio for medical insurance increased by 1.8 ppts y-o-y in 4Q24, primarily driven by a higher loss ratio due to the increased flu activity during the quarter. As a result, the pre-tax profit of the combined insurance business increased by 20.2% y-o-y to GEL 10.7 million in 4Q24. See page 14 for details. The equity value of the combined insurance business was up 5.0% q-o-q to GEL 427.9 million in 4Q24 (Ardi's equity value is measured at the price of recent investment). This translated into an implied LTM P/E valuation multiple of 11.1x at 31-Dec-24 (up from 10.9x as of 30-Sep-24 and down from 12.4x as of 31-Dec-23).

Hospitals (7.7% of total portfolio value) - Hospitals' EV increased by 8.7% to GEL 591.9 million in 4Q24, driven by the strong operating performance of the business. The total revenue increased by 16.2% y-o-y in 4Q24, reflecting the business' gradual return to its normal operational levels following mandatory regulatory renovations across all hospitals, most of which occurred between the second half of 2023 and the first half of 2024. These renovations led to the phased closure of certain sections of our healthcare facilities, resulting in reduced patient intake during that period. The gross profit margin also increased in 4Q24 (up 6.9 ppts y-o-y to 35.8%), further reflecting enhanced offerings of high-margin outpatient services and the improved cost efficiencies achieved by the business. Operating expenses (excl. IFRS 16) were up by 2.4% y-o-y in 4Q24, primarily due to higher salary costs associated with overall business growth. This translated into a 119.8% y-o-y EBITDA (excl. IFRS 16) growth in 4Q24. See page 15 for details. Consequently, LTM EBITDA (incl. IFRS 16) was up by 20.0% to GEL 56.6 million in 4Q24. Net debt remained largely flat, down 0.8% q-o-q to GEL 271.6 million as at 31-Dec-24. As a result, the equity value of Hospitals was assessed at GEL 290.7 million in 4Q24 (up 19.5% q-o-q), translating into an implied LTM EV/EBITDA multiple (incl. IFRS 16) of 10.5x at 31-Dec-24 (down from 11.5x at 30-Sep-24 and 13.8x at 31-Dec-23).

Private investment stage portfolio companies (14.8% of total portfolio value)

Renewable Energy (6.7% of total portfolio value) - The EV of the business remained largely flat, up by 0.1% to US$ 158.2 million in 4Q24. In US$ terms, the 4Q24 revenue decreased by 11.9% y-o-y to US$ 2.6 million, resulting from an 11.1% y-o-y decrease in electricity generation due to unfavourable weather conditions during the quarter. Operating expenses were well-managed, down 1.1% y-o-y. These developments translated into a 16.9% y-o-y decrease in EBITDA in 4Q24. See page 17 for details. The pipeline renewable energy projects continued to be measured at an equity investment cost (US$ 19.3 million in aggregate as at 31-Dec-24). Net debt decreased by 2.8% q-o-q to US$ 68.2 million in 4Q24, reflecting GEL's depreciation against US$ during the quarter. As a result, the equity value of the business was assessed at GEL 252.6 million in 4Q24 (up 5.4% q-o-q), (up 2.5% q-o-q to US$ 90.0 million in US$ terms). The blended EV/EBITDA implied valuation multiple of the operational assets was 11.3x as of 31-Dec-24 (up from 11.2x as of 30-Sep-24 and down from 12.6x as of 31-Dec-23).

Education (4.8% of total portfolio value) - The EV of Education was up by 12.0% to GEL 234.4 million in 4Q24, reflecting the strong operating performance of the business, while taking into account the first-time valuation of one of the campuses launched in 2H23, which was previously measured at an equity investment cost. The 4Q24 revenue increased by 16.4% y-o-y resulting from a) organic growth through strong learner intakes and a ramp-up of utilisation and b) an expansion of the business through the launch and acquisition of two new campuses in 2023. The expansion of the business also led to a 14.0% y-o-y increase in operating expenses in 4Q24. Consequently, the 4Q24 EBITDA grew by 21.3% y-o-y. See page 18 for details. LTM EBITDA was up by 14.0% to GEL 18.4 million in 4Q24. Net debt was up by 52.6% q-o-q to GEL 20.7 million in 4Q24, mainly reflecting the investments related to the expansion of existing campuses in the midscale and affordable segments, as well as the first-time valuation of the new campus, as outlined above. As a result, GCAP's stake in the education business was valued at GEL 181.6 million at 31-Dec-24 (up 0.3% q-o-q). The implied valuation multiple decreased to 12.8x as of 31-Dec-24, down from 13.0x as of 30-Sep-24 and 16.7x as of 31-Dec-23.

Clinics and Diagnostics business (3.3% of total portfolio value) - The EV of the business increased by 8.9% to GEL 186.7 million in 4Q24, resulting from its strong operating performance. The revenue and EBITDA (ex. IFRS 16) of the combined clinics and diagnostics business were up 22.9% and 46.0% y-o-y, respectively. This growth reflects a) the increased demand for high revenue-generating services driven by the business' proactive approach to customer acquisition and service enhancements, and b) the ramp-up of the two new ambulatory centres launched in 2023. Operating expenses were up by 20.1% in 4Q24, reflecting increased salary and rent expenses in line with the expansion of the business. See page 19 for details. The LTM EBITDA (incl. IFRS 16) of the business increased by 9.1% to GEL 17.6 million in 4Q24. The net debt (incl. IFRS 16) was down by 5.2% q-o-q at GEL 61.0 million, reflecting the strong operating performance as well as the collection of delayed receivables from the State. As a result, the equity value of Clinics and Diagnostics was assessed at GEL 123.2 million (up 17.8% q-o-q), translating into an implied LTM EV/EBITDA multiple (incl. IFRS 16) of 10.6x at 31-Dec-24 (10.6x as at 30-Sep-24 and 14.5x as of 31-Dec-23).

Other businesses (4.3% of total portfolio value) - Of the "other" private portfolio businesses, Auto Service is valued based on LTM EV/EBITDA. Wine and Housing Development are valued based on DCF, Hospitality is valued based on NAV. Following its disposal, the beer and distribution business, previously valued using the LTM EV/EBITDA multiple, is now assessed based on the recent transaction price. See performance highlights of other businesses on page 21. The portfolio value of other businesses decreased by 51.0% to GEL 160.3 million in 4Q24, primarily due to the divestment of an 80% holding in the beer and distribution business in 4Q24.

Listed and observable portfolio companies (42.8% of total portfolio value)

Lion Finance Group (37.8% of total portfolio value) - In 3Q24, Lion Finance Group delivered an annualised ROAE of 32.1% and a q-o-q loan book growth of 4.3% in Georgia and 6.1% in Armenia on a constant currency basis. In 4Q24, Lion Finance Group's share price was up by 28.2% q-o-q to GBP 47.1 at 31-Dec-24, which led to a 23.9% q-o-q increase in the value of GCAP's stake in Lion Finance Group to 1.4 billion as at 31-Dec-24. The LTM P/E valuation multiple was at 3.2x as of 31-Dec-24. Lion Finance Group's public announcement of their 4Q24 results, when published, will be available on Lion Finance Group's website.

Water Utility (5.0% of total portfolio value) - The equity value of the business increased by GEL 28.0 million to GEL 188.0 million in 4Q24. This valuation assessment was performed by applying the put option valuation to GCAP's 20% holding (where GCAP has a clear exit path through a put and call structure at pre-agreed EBITDA multiples) and takes into account the strong operating performance of the business in 4Q24. GCAP's put option is exercisable in 2025 or 2026.

 

2) Investments[14]

In 4Q24, GCAP invested GEL 9.5 million in private portfolio companies.

·      GEL 6.9 million was invested in Renewable Energy for the development of pipeline projects.

·      GEL 2.0 million was invested in the other businesses.

·      GEL 0.6 million was allocated to the education business.

 

3) Share buybacks

During 4Q24, 688,644 shares with a total value of US$ 9.3 million (GEL 25.7 million) were bought back under GCAP's share buyback and cancellation programmes. Subsequent to FY24, additional 1,072,332 shares with a value of US$ 15.9 million (GEL 45.3 million) have been repurchased under the ongoing share buyback programme as at 21 February 2025.

 

4) Dividends

In 4Q24, GCAP recorded GEL 9.8 million dividend income from its portfolio companies:

·      GEL 8.8 million dividend was received from the insurance business, of which GEL 7.4 million was collected from Medical Insurance and GEL 1.5 million from P&C Insurance.

·      GEL 1.0 million dividend was collected from the auto service business.

 

 

 

FY24 NAV STATEMENT HIGHLIGHTS

GEL '000, unless otherwise noted (Unaudited)	Dec-23	1. Value creation[15]	2a. Investment and divestments	2b. Buyback	2c. Dividend	3. Operating expenses	4. Liquidity/ FX/Other	Dec-24	Change %
Total Listed and Observable Portfolio Value	1,384,847	368,985	-	-	(144,797)	-	-	1,609,035	16.2%
Listed and Observable Portfolio value change %		26.6%	0.0%	0.0%	-10.5%	0.0%	0.0%	16.2%
Total Private Portfolio Companies	2,287,098	66,337	(151,104)	-	(56,955)	-	7,079	2,152,455	-5.9%
Of which, Large Companies	1,436,231	30,237	-	-	(35,408)	-	3,689	1,434,749	-0.1%
Of which, Investment Stage Companies	566,614	(10,501)	11,933	-	(12,258)	-	1,604	557,392	-1.6%
Of which, Other Companies	284,253	46,601	(163,037)	-	(9,289)	-	1,786	160,314	-43.6%
Private Portfolio value change %		2.9%	-6.6%	0.0%	-2.5%	0.0%	0.3%	-5.9%
Total Portfolio Value	3,671,945	435,322	(151,104)	-	(201,752)	-	7,079	3,761,490	2.4%
Total Portfolio value change %		11.9%	-4.1%	0.0%	-5.5%	0.0%	0.2%	2.4%
Net Debt	(296,808)	-	148,504	(135,718)	201,752	(21,379)	(50,776)	(154,425)	-48.0%
Net Asset Value	3,378,512	435,322	-	(136,523)	-	(35,279)	(33,019)	3,609,013	6.8%
NAV change %		12.9%	0.0%	-4.0%	0.0%	-1.0%	-1.0%	6.8%
Shares outstanding15	40,736,528	-	-	(3,790,417)	-	-	666,377	37,612,488	-7.7%
Net Asset Value per share, GEL	82.94	10.68	(0.00)	4.81	(0.00)	(0.87)	(1.60)	95.95	15.7%
NAV per share, GEL change %		12.9%	0.0%	5.8%	0.0%	-1.0%	-1.9%	15.7%

NAV per share (GEL) was up by 15.7% in FY24, reflecting a GEL 435.3 million value creation across our portfolio companies with a positive 12.9 ppts impact and share buybacks (+5.8 ppts impact). The NAV per share growth was slightly offset by a) management platform-related costs and net interest expense with a negative 1.9 ppts impact and b) GEL's depreciation against US$, resulting in a foreign currency loss of GEL 15.1 million on GCAP net debt (-0.5 ppts impact).

Portfolio overview

Total portfolio value increased by GEL 89.5 million (up 2.4%) in FY24:

·      The value of GCAP's holding in Lion Finance Group was up by GEL 195.2 million, reflecting the net impact of GEL 340.0 million value creation and GEL 144.8 million cash and buyback dividend income from the Bank in FY24.

·      The value of the water utility business increased by GEL 29.0 million, reflecting its strong operating performance during the year.

·      The value of the private portfolio decreased by GEL 134.6 million in FY24, mainly reflecting the divestment of an 80% holding in the beer and distribution business and the collection of GEL 57.0 million dividends from the private portfolio companies. The decrease was partially offset by GEL 66.3 million value creation and GEL 16.9 million investments in the portfolio companies.

 

1)    Value creation

Total portfolio value creation amounted to GEL 435.3 million in FY24.

·      An 18.5% increase in Lion Finance Group's share price, supported by a 3.3% appreciation of GBP against GEL in FY24, led to a GEL 340.0 million value creation.

·      GEL 29.0 million value was created in our water utility business.

·      The value creation in the private portfolio amounted to GEL 66.3 million in FY24, reflecting a net impact of:

o  GEL 671.5 million operating performance-related increase in the value of our private assets.

o  GEL 605.1 million value reduction from changes in valuation inputs, including the negative impact from the increased country risk premium in FY24.

 

 

 

The table below summarises value creation drivers in our businesses in FY24:

Portfolio Businesses	Operating Performance[16]	Multiple Change and FX[17]	Value Creation
GEL '000, unless otherwise noted (unaudited)	(1)	(2)	(1)+(2)
Listed and Observable			368,985
Lion Finance Group			339,985
Water Utility			29,000
Private	671,481	(605,144)	66,337
Large Portfolio Companies	434,148	(403,911)	30,237
Retail (pharmacy)	170,146	(159,407)	10,739
Insurance (P&C and Medical)	129,373	(54,756)	74,617
Of which, P&C Insurance	111,728	(66,982)	44,746
Of which, Medical Insurance	17,645	12,226	29,871
Hospitals	134,629	(189,748)	(55,119)
Investment Stage Portfolio Companies	152,279	(162,780)	(10,501)
Renewable Energy	37,205	(50,975)	(13,770)
Education	49,255	(58,108)	(8,853)
Clinics and Diagnostics	65,819	(53,697)	12,122
Other	85,054	(38,453)	46,601
Total portfolio	671,481	(605,144)	435,322

The enterprise value and equity value development of our businesses in FY24 is summarised in the following table:

	Enterprise Value (EV)			Equity Value
GEL '000, unless otherwise noted (Unaudited)	31-Dec-24	31-Dec-23	Change %	31-Dec-24	31-Dec-23	Change %	% share in total portfolio
Listed and Observable portfolio				1,609,035	1,384,847	16.2%	42.8%
Lion Finance Group				1,421,035	1,225,847	15.9%	37.8%
Water Utility				188,000	159,000	18.2%	5.0%
Private portfolio	3,613,737	3,463,259	4.3%	2,152,455	2,287,098	-5.9%	57.2%
Large portfolio companies	2,076,069	2,021,278	2.7%	1,434,749	1,436,231	-0.1%	38.1%
Retail (pharmacy)	1,021,000	1,043,800	-2.2%	716,130	714,001	0.3%	19.0%
Insurance (P&C and Medical)	463,144	358,566	29.2%	427,945	377,874	13.3%	11.4%
Of which, P&C Insurance	313,000	285,566	9.6%	313,140	285,566	9.7%	8.3%
Of which, Medical Insurance	150,144	73,000	NMF	114,805	92,308	24.4%	3.1%
Hospitals	591,925	618,912	-4.4%	290,674	344,356	-15.6%	7.7%
Investment stage portfolio companies	865,238	856,787	1.0%	557,392	566,614	-1.6%	14.8%
Renewable Energy	444,158	456,236	-2.6%	252,606	266,627	-5.3%	6.7%
Education[18]	234,405	228,799	2.5%	181,584	189,226	-4.0%	4.8%
Clinics and Diagnostics	186,675	171,752	8.7%	123,202	110,761	11.2%	3.3%
Other	672,430	585,194	14.9%	160,314	284,253	-43.6%	4.3%
Total portfolio				3,761,490	3,671,945	2.4%	100.0%

2)    Investments[19]

In FY24, GCAP invested GEL 16.9 million in private portfolio companies.

·      GEL 11.3 million was invested in the renewable energy business for the development of the pipeline projects.

·      GEL 5.0 million was invested in the other businesses.

·      GEL 0.6 million was allocated to the education business.

 

3)    Share buybacks

During FY24, 3,790,417 shares were bought back for a total consideration of GEL 136.5 million.

·      3,669,889 shares with a total value of US$ 48.1 million (GEL 131.9 million) were repurchased under GCAP's buyback and cancellation programmes during FY24.

·      120,528 shares (GEL 4.6 million in value) represent the tax-related statutory buybacks as part of the share exercises from the management trust, where the average cost of unawarded shares is GBP 7.9 per share as of 31 December 2024.

 

 

4)    Dividends[20]

In FY24, GCAP recorded GEL 201.8 million dividend income:

Dividend income GEL million (unaudited)	Recurring	One-off	Total
Lion Finance Group	122.2	22.6	144.8
Of which, cash dividends	72.2	-	72.2
Of which, buyback dividends	50.0	22.6	72.6
Insurance business	25.4	-	25.4
Of which, P&C Insurance	18.0	-	18.0
Of which, Medical Insurance	7.4	-	7.4
Renewable Energy	12.3	-	12.3
Retail (Pharmacy)	10.0	-	10.0
Beer Business	8.3	-	8.3
Auto Service	1.0	-	1.0
Total	179.2	22.6	201.8

·  GEL 22.6 million represents a one-off buyback dividend from Lion Finance Group from advanced participation in their share buyback programme in 3Q24, which temporarily decreased our stake in Lion Finance Group to 19.1% as at 30-Sep-24. Consistent with the Bank's buyback programme, GCAP's stake has rebounded to 19.2% as at 31-Dec-24. GCAP's targeted holding level in the Bank remains at 19.5%.

 

 

Net Capital Commitment (NCC) overview

Below we describe the components of Net Capital Commitment (NCC) as of 31 December 2024, 30 September 2024 and 31 December 2023. NCC represents an aggregated view of all confirmed, agreed and expected capital outflows (including a buffer for contingencies) at both Georgia Capital PLC and JSC Georgia Capital levels

Components of NCC GEL '000, unless otherwise noted (unaudited)	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total cash and liquid funds	278,237	101,882	NMF	107,910	NMF
Loans issued	-	11,714	NMF	9,212	NMF
Accrued dividend income	-	28,849	NMF	-	NMF
Gross debt	(432,662)	(411,825)	5.1%	(413,930)	4.5%
Net debt (1)	(154,425)	(269,380)	-42.7%	(296,808)	-48.0%
Guarantees issued (2)	-	-	NMF	-	NMF
Net debt and guarantees issued (3)=(1)+(2)	(154,425)	(269,380)	NMF	(296,808)	-48.0%
Planned investments (4)	(118,480)	(122,651)	-3.4%	(125,143)	-5.3%
of which, planned investments in Renewable Energy	(69,518)	(74,433)	-6.6%	(77,637)	-10.5%
of which, planned investments in Education	(48,962)	(48,218)	1.5%	(47,506)	3.1%
Announced Buybacks (5)	(67,421)	(21,877)	NMF	(18,087)	NMF
Contingency/liquidity buffer (6)	(140,340)	(136,485)	2.8%	(134,470)	4.4%
Total planned investments, announced buybacks and contingency/liquidity buffer (7)=(4)+(5)+(6)	(326,241)	(281,013)	16.1%	(277,700)	17.5%
Net capital commitment (3)+(7)	(480,666)	(550,393)	-12.7%	(574,508)	-16.3%
Portfolio value	3,761,490	3,467,900	8.5%	3,671,945	2.4%
NCC ratio	12.8%	15.9%	-3.1 ppts	15.6%	-2.8 ppts

Cash and liquid funds. Total cash and liquid funds' balance increased 2.7x times q-o-q to GEL 278.2 million in 4Q24 (up 2.6x times in FY24), primarily reflecting the collection of proceeds from the sale of an 80% holding in the beer and distribution business.

Loans issued. Issued loans' balance primarily refers to loans issued to our private portfolio companies and are lent at market terms. The balance of loans issued was reduced to nil in 4Q24, reflecting the complete repayment of loans by the portfolio companies.

Gross debt. In US$ terms the balance was up 2.2% q-o-q in 4Q24 (up 0.2% in FY24), reflecting the impact of interest accrual on GCAP's sustainability-linked bond. In GEL terms, the balance was up by 5.1% in 4Q24, further reflecting the foreign exchange rate movements during the quarter.

Planned investments. Planned investments' balance represents expected investments in renewable energy and education businesses over the next 2-3 years. The balance in US$ terms was down by 6.1% and 9.3% in 4Q24 and FY24, respectively, reflecting cash outflows for the investment projects as described above.

Announced buybacks. The balance of the announced buybacks at 31-Dec-24 reflects the unutilised share buybacks under

GCAP's US$ 25 million share buyback and cancellation programme.

Contingency/liquidity buffer. The balance reflects the provision for cash and liquid assets in the amount of US$ 50 million, for contingency/liquidity purposes. The balance remained unchanged in US$ terms as at 31-Dec-24.

As a result of the movements outlined above, the NCC ratio improved by 3.1 ppts q-o-q to 12.8% as of 31 December 2024 (2.8 ppts improvement in FY24).

INCOME STATEMENT (ADJUSTED IFRS/APM)

Net income under IFRS was GEL 440.0 million in 4Q24 (GEL 213.2 million net income in 4Q23) and net income of GEL 362.3 million in FY24 (GEL 608.6 million net income in FY23). The IFRS income statement is prepared on the Georgia Capital PLC level and the results of all operations of the Georgian holding company JSC Georgia Capital are presented as one line item. As we conduct almost all of our operations through JSC Georgia Capital, through which we hold all of our portfolio companies, the IFRS results provide little transparency on the underlying trends.

Accordingly, to enable a more granular analysis of those trends, the following adjusted income statement presents the Group's results of operations for the period ending December 31 as an aggregation of (i) the results of GCAP (the two holding companies Georgia Capital PLC and JSC Georgia Capital, taken together) and (ii) the fair value change in the value of portfolio companies during the reporting period. For details on the methodology underlying the preparation of the adjusted income statement, please refer to page 94 in Georgia Capital PLC's 2023 Annual report.

INCOME STATEMENT (Adjusted IFRS/APM)

GEL '000, unless otherwise noted (unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Dividend income	9,826	34,148	-71.2%	201,752	235,883	-14.5%
Of which, regular dividend income	9,826	34,148	-71.2%	129,201	162,527	-20.5%
Of which, buyback dividend income	-	-	NMF	72,551	73,356	-1.1%
Interest income	2,076	2,345	-11.5%	7,477	16,642	-55.1%
Realised/unrealised gain/(loss) on liquid funds/ Loss on GCAP Eurobond buybacks	6	772	-99.2%	(796)	(1,574)	-49.4%
Interest expense	(9,101)	(9,026)	0.8%	(35,589)	(47,808)	-25.6%
Gross operating income	2,807	28,239	-90.1%	172,844	203,143	-14.9%
Operating expenses	(8,345)	(8,807)	-5.2%	(35,280)	(36,779)	-4.1%
GCAP net operating (loss)/income	(5,538)	19,432	NMF	137,564	166,364	-17.3%
Fair value changes of portfolio companies
Listed and Observable Portfolio Companies	302,564	133,638	NMF	224,188	399,384	-43.9%
Of which, Lion Finance Group PLC	274,564	133,638	NMF	195,188	395,384	-50.6%
Of which, Water Utility	28,000	-	NMF	29,000	4,000	NMF
Private Portfolio companies	148,459	55,346	NMF	9,382	45,248	-79.3%
Large Portfolio Companies	125,123	34,707	NMF	(5,171)	(2,039)	NMF
Of which, Retail (pharmacy)	57,596	34,397	67.4%	691	(11,507)	NMF
Of which, Insurance (P&C and Medical)	20,468	35,899	-43.0%	49,257	97,012	-49.2%
Of which, Hospitals	47,059	(35,589)	NMF	(55,119)	(87,544)	-37.0%
Investment Stage Portfolio Companies	24,314	34,017	-28.5%	(22,759)	41,857	NMF
Of which, Renewable energy	5,942	5,179	14.7%	(26,028)	33,497	NMF
Of which, Education	(183)	16,584	NMF	(8,853)	12,282	NMF
Of which, Clinics and Diagnostics	18,555	12,254	51.4%	12,122	(3,922)	NMF
Other businesses	(978)	(13,378)	-92.7%	37,312	5,430	NMF
Total investment return	451,023	188,984	NMF	233,570	444,632	-47.5%
Income before foreign exchange movements and non-recurring expenses	445,485	208,416	NMF	371,134	610,996	-39.3%
Net foreign currency (loss)/gain/impairment	(9,417)	28	NMF	(18,662)	6,491	NMF
Non-recurring expenses	(480)	(139)	NMF	(2,148)	(1,898)	13.2%
Net income	435,588	208,305	NMF	350,324	615,589	-43.1%

The gross operating income for 4Q24 was down 90.1% y-o-y (a 14.9% decrease in FY24), mainly due to lower dividend income. This was driven by a timing discrepancy in recognising Lion Finance Group's interim dividend, which was recorded in the third quarter of 2024 compared to the fourth quarter in 2023.

The components of GCAP's operating expenses are shown in the table below.

GCAP Operating Expenses Components

GEL '000, unless otherwise noted (unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Administrative expenses[21]	(2,610)	(2,858)	-8.7%	(10,586)	(10,909)	-3.0%
Management expenses - cash-based[22]	(2,328)	(2,602)	-10.5%	(10,794)	(10,877)	-0.8%
Management expenses - share-based[23]	(3,407)	(3,347)	1.8%	(13,900)	(14,993)	-7.3%
Total operating expenses	(8,345)	(8,807)	-5.2%	(35,280)	(36,779)	-4.1%
Of which, fund type expense[24]	(2,490)	(2,660)	-6.4%	(9,258)	(9,667)	-4.2%
Of which, management fee type expenses[25]	(5,855)	(6,147)	-4.8%	(26,022)	(27,112)	-4.0%

GCAP management fee expenses starting from 2024 have a self-targeted cap of 0.75% of Georgia Capital's NAV. The LTM management fee expense ratio was 0.72% at 31-Dec-24 (0.80% as of 31-Dec-23).

Total investment return represents the increase (decrease) in the fair value of our portfolio. Total investment return was GEL 451.0 million in 4Q24 and GEL 233.6 million in FY24, reflecting the changes in the value of our portfolio companies. We discuss valuation drivers for our businesses on pages 5-7. The performance of each of our private large and investment stage portfolio companies is discussed on pages 12-20.

GCAP's net foreign currency liability balance amounted to US$ 60 million (GEL 170 million) at 31-Dec-24. As a result of the movements described above, GCAP's adjusted IFRS net income was GEL 435.6 million in 4Q24 (net income of GEL 350.3 million in FY24).

 

 

 

 

DISCUSSION OF PORTFOLIO COMPANIES' RESULTS (STAND-ALONE IFRS)

The following sections present the IFRS results and business development extracted from the individual portfolio company's IFRS accounts for large and investment stage entities, where the 2024 portfolio company's accounts and respective IFRS numbers are unaudited. We present key IFRS financial highlights, operating metrics and ratios along with commentary explaining the developments behind the numbers. For the majority of our portfolio companies, the fair value of our equity investment is determined by the application of an income approach (DCF) and a market approach (listed peer multiples and precedent transactions). Under the discounted cash flow (DCF) valuation method, fair value is estimated by deriving the present value of the business using reasonable assumptions of expected future cash flows and the terminal value, and the appropriate risk-adjusted discount rate that quantifies the risk inherent to the business. Under the market approach, listed peer group earnings multiples are applied to the trailing twelve months (LTM) stand-alone IFRS earnings of the relevant business. As such, the stand-alone IFRS results and developments driving the IFRS earnings of our portfolio companies are key drivers of their valuations within GCAP's financial statements. See "Basis of Presentation" on page 30 for more background.

 

Discussion of Retail (Pharmacy) Business Results

The retail (pharmacy) business, where GCAP owns a 97.8% equity interest, is the largest pharmaceuticals retailer and wholesaler in Georgia, with a 35.8% market share in the organised retail market based on 2023 revenues. The business consists of a retail pharmacy chain operating under two brands (GPC and Pharma Depot) and a wholesale business that sells pharmaceuticals and medical supplies to hospitals and other pharmacies. The business operates a total of 410 pharmacies (of which 395 are in Georgia and 15 in Armenia) and 19 franchise stores (of which, 12 are in Georgia, 2 in Armenia and 5 in Azerbaijan).

4Q24 and FY24 performance (GEL '000), Retail (pharmacy)[26]

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue, net	232,532	220,715	5.4%	850,115	815,020	4.3%
Of which, retail	182,304	175,526	3.9%	681,213	646,402	5.4%
Of which, wholesale	50,228	45,189	11.2%	168,902	168,618	0.2%
Gross Profit	73,019	59,952	21.8%	261,266	233,796	11.7%
Gross profit margin	31.4%	27.2%	4.2 ppts	30.7%	28.7%	2.0 ppts
Operating expenses (ex. IFRS 16)	(48,494)	(43,934)	10.4%	(180,339)	(156,453)	15.3%
EBITDA (ex. IFRS 16)	24,525	16,018	53.1%	80,927	77,343	4.6%
EBITDA margin, (ex. IFRS 16)	10.5%	7.3%	3.2 ppts	9.5%	9.5%	NMF
Net profit/(loss) (ex. IFRS 16)	13,613	(102)	NMF	38,282	45,614	-16.1%
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16)	21,541	34,209	-37.0%	78,249	52,361	49.4%
EBITDA to cash conversion	87.8%	213.6%	NMF	96.7%	67.7%	29.0 ppts
Cash flow used in investing activities[27]	(14,589)	(11,335)	28.7%	(41,278)	(84,130)	-50.9%
Free cash flow, (ex. IFRS 16)[28]	13,528	20,646	-34.5%	54,751	(56,130)	NMF
Cash flow (used in)/from financing activities (ex. IFRS 16)	(23,978)	3,126	NMF	(77,722)	17,686	NMF
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	608,576	622,763	-2.3%	660,243	-7.8%
Of which, cash and bank deposits	19,154	36,380	-47.4%	60,383	-68.3%
Of which, securities and loans issued	19,087	15,585	22.5%	2,623	NMF
Total liabilities	521,341	544,948	-4.3%	597,611	-12.8%
Of which, borrowings	181,833	204,440	-11.1%	228,261	-20.3%
Of which, lease liabilities	149,348	149,409	NMF	151,916	-1.7%
Total equity	87,235	77,815	12.1%	62,632	39.3%

 

INCOME STATEMENT HIGHLIGHTS

Ø The developments in 4Q24 and FY24 total revenue of Retail (Pharmacy) reflect the combination of the following factors:

o  A 3.9% y-o-y increase in retail revenue in 4Q24 (up 5.4% y-o-y in FY24), driven by a substantial ramp-up in the performance of pharmacy stores launched in late 2023 and the business' continued efforts to enhance sales and profitability of para-pharmacy products. The revenue from para-pharmacy, as a percentage of retail revenue, was 38.5% in 4Q24 (38.1% in FY24).

o  An 11.2% y-o-y increase in wholesale revenue (up 0.2% y-o-y in FY24), driven by higher revenue from healthcare programmes.

o  The total revenue growth was dampened by price regulations, which set a maximum selling price for both prescription and non-prescription medicines. The negative impact of these regulations on the total revenue growth amounted to GEL 3.0 million in 4Q24 (GEL 14.5 million in FY24).

Ø The business' initiative to renegotiate trading terms with key suppliers across major product categories positively impacted gross profit margins in 4Q24 and FY24. This was particularly evident in the para-pharmacy retail segment, which saw y-o-y improvements of 6.2 ppts in 4Q24 and 6.4 ppts in FY24.

Ø The y-o-y increase in operating expenses (excl. IFRS 16) in 4Q24 and FY24 was driven by higher rent and salary costs, reflecting the significant expansion of the retail chain and the opening of the new warehouse at the end of 2023. The increase in salary expenses (up 14.4% and 13.9% y-o-y in 4Q24 and FY24, respectively) further reflects higher staff compensation aligned with market trends and the implementation of new incentive schemes aimed at improving the gross profit margin.

Ø As a result, the business achieved y-o-y EBITDA (excl. IFRS 16) growth of 53.1% in 4Q24 (up by 4.6% y-o-y in FY24).

Ø Net interest expense (excl. IFRS 16) was down by 32.0% y-o-y to GEL 4.4 million in 4Q24 and up by 48.6% y-o-y to GEL 20.1 million in FY24, the latter attributable to the higher average net debt balance, utilised to finance the minority shareholder buyout transaction in June 2023.

Ø The developments described above translated into a GEL 13.7 million y-o-y increase in net profit (excl. IFRS 16) in 4Q24 (down 16.1% y-o-y in FY24).

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø The net debt balance was down to GEL 143.6 million at 31-Dec-24, from GEL 152.5 million at 30-Sep-24, reflecting robust cash flow generation in 4Q24.

Ø Cash flow from operating activities was strong with 87.8% and 96.7% EBITDA to cash conversion ratio in 4Q24 and FY24, respectively.

Ø The business paid GEL 10.0 million dividends to GCAP in FY24.

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø In 2024, the business divested from its textile franchise brands "Carters" and "Triumph" with 6 operating stores in Georgia. The total consideration (excl. VAT) amounted to GEL 3.7 million.

Ø The number of pharmacies and franchise stores is provided below:

(Unaudited)	Dec-24	Sep-24	Change (q-o-q)	Dec-23	Change (y-o-y)
Number of pharmacies	410	415	(5)	412	(2)
Of which, Georgia	395	399	(4)	397	(2)
Of which, Armenia	15	16	(1)	15	-
Number of franchise stores	19	19	-	23	(4)
Of which, Georgia	12	12	-	17	(5)
Of which, Armenia	2	2	-	2	-
Of which, Azerbaijan	5	5	-	4	1

Ø Retail (Pharmacy)'s key operating performance highlights for 4Q24 and FY24 are noted below:

Key metrics (unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Same store revenue growth	0.0%	-2.2%	2.2 ppts	-1.7%	-0.1%	-1.6 ppts
Number of bills issued (mln)	8.0	8.2	-2.6%	31.6	31.3	0.9%
Average bill size (GEL)	21.5	20.3	5.7%	20.4	19.6	4.1%

 

 

 

Discussion of Insurance (P&C and Medical) Business Results

As at 31-Dec-24, the insurance business comprises a) Property and Casualty (P&C) insurance business, operating under the brand name "Aldagi" and b) medical insurance business, operating under "Imedi L" and "Ardi" brands, the latter acquired in April 2024. The P&C insurance business is a leading player with a 30% market share in property and casualty insurance based on gross premiums as of 30-Sep-24. P&C also offers a variety of non-property and casualty products, such as life insurance. The medical insurance business is the country's largest private health insurer, with a 35% market share based on gross insurance premiums as of 30-Sep-24, offering a variety of health insurance products primarily to corporate and (selectively) to state entities and also to retail clients in Georgia. GCAP owns a 100% equity stake in both insurance businesses.

4Q24 and FY24 performance (GEL'000), Insurance (P&C and Medical) [29]

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Insurance revenue	96,235	56,005	71.8%	316,483	208,242	52.0%
Of which, P&C Insurance	40,091	31,238	28.3%	149,021	116,911	27.5%
Of which, Medical Insurance	56,144	24,767	NMF	167,462	91,331	83.4%
Net underwriting profit	22,033	16,310	35.1%	79,823	53,828	48.3%
Net investment profit	4,965	3,878	28.0%	16,178	14,272	13.4%
Pre-tax profit	10,677	8,886	20.2%	42,895	30,393	41.1%
Of which, P&C Insurance	7,209	6,324	14.0%	28,952	21,982	31.7%
Of which, Medical Insurance	3,468	2,562	35.4%	13,943	8,411	65.8%
CASH FLOW HIGHLIGHTS
Net cash flows from operating activities	26,351	2,091	NMF	69,140	33,687	NMF
Free cash flow	23,990	1,074	NMF	64,917	29,358	NMF
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	300,510	334,416	-10.1%	248,902	20.7%
Total equity	128,614	124,474	3.3%	130,684	-1.6%

INCOME STATEMENT HIGHLIGHTS

Ø The y-o-y increase in 4Q24 and FY24 insurance revenue reflects a combination of factors:

§ The revenue of the P&C insurance business was up by 28.3% y-o-y in 4Q24 (up 27.5% y-o-y in FY24), resulting from:

o  A GEL 4.8 million y-o-y increase in Motor Insurance revenues in 4Q24 (a GEL 19.5 million y-o-y increase in FY24), mainly attributable to the expansion of both retail and corporate client portfolios.

o  A GEL 1.9 million y-o-y increase in Agricultural Insurance revenues in 4Q24 (a GEL 4.0 million y-o-y increase in FY24), driven by a growing client base as well as increased tariffs on certain crops and regions.

o  A GEL 1.6 million y-o-y increase in Credit Life Insurance revenues in 4Q24 (a GEL 5.7 million y-o-y increase in FY24), resulting from the growth of partner banks' portfolios in the mortgage, consumer loan and other sectors.

o  A GEL 0.6 million y-o-y increase in the revenues from other insurance lines in 4Q24 (a GEL 2.9 million y-o-y increase in FY24).

§ The revenue of the medical insurance business more than doubled y-o-y in 4Q24 (up 83.4% y-o-y in FY24), reflecting organic growth of the portfolio, c.10% increase in insurance policy prices and the positive impact of the acquisition of Ardi insurance portfolio in April 2024, the latter contributing GEL 24.1 million to the 4Q24 y-o-y revenue growth (GEL 59.6 million in FY24).

Ø The insurance business' key performance ratios for 4Q24 and FY24 are noted below:

Key ratios	P&C Insurance						Medical Insurance
(Unaudited)	4Q24	4Q23	Change	FY24	FY23	Change	4Q24	4Q23	Change	FY24	FY23	Change
Combined ratio	89.9%	89.0%	0.9 ppts	87.5%	89.5%	-2.0 ppts	94.4%	92.6%	1.8 ppts	93.1%	94.8%	-1.7 ppts
Expense ratio	35.1%	38.5%	-3.4 ppts	34.1%	35.8%	-1.7 ppts	16.7%	18.7%	-2.0 ppts	16.8%	16.6%	0.2 ppts
Loss ratio	54.7%	49.8%	4.9 ppts	53.3%	53.8%	-0.5 ppts	77.7%	73.9%	3.8 ppts	76.3%	78.2%	-1.9 ppts
FX ratio	0.1%	0.7%	-0.6 ppts	0.1%	-0.1%	0.2 ppts	-	-	-	-	-	-
ROAE[30]	30.8%	28.8%	2.0 ppts	33.2%	24.4%	8.8 ppts	44.0%	23.5%	20.5 ppts	35.6%	17.1%	18.5 ppts

Ø The combined ratio of P&C Insurance increased by 0.9 ppt y-o-y to 89.9% in 4Q24 reflecting the net impact of: a) a 4.9 ppts y-o-y increase in the loss ratio, mainly due to higher motor insurance claims in the corporate client segment, with ongoing price segmentation initiatives expected to drive improvements in the coming quarters, and b) a 3.4 ppts y-o-y improvement in expense ratio in 4Q24. The combined ratio of P&C Insurance improved by 2.0 ppts y-o-y to 87.5% in FY24, mainly resulting from the improved expense ratio on the back of strong revenue growth.

Ø The combined ratio of Medical Insurance increased by 1.8 ppts y-o-y to 94.4% in 4Q24, primarily driven by a higher loss ratio due to the increased flu activity in 4Q24 compared to 4Q23. A 1.7 ppts y-o-y improvement in the FY24 combined ratio reflects consolidation of Ardi's portfolio and increased revenues, due to higher insurance tariffs, as described above.

Ø The net investment profit was up by 28.0% y-o-y in 4Q24 (up 13.4% y-o-y in FY24), attributable to the higher average liquid funds balance as well as the consolidation of Ardi's insurance portfolio.

Ø As a result, the pre-tax profit of the insurance business was up by 20.2% y-o-y in 4Q24 (up 41.1% y-o-y in FY24). The acquisition of Ardi Insurance contributed GEL 1.4 million to the 4Q24 y-o-y pre-tax profit growth (GEL 5.6 million in FY24).

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø The solvency ratio of P&C and medical insurance businesses stood at 173% and 157%, respectively, as of 31 December 2024, significantly above the required minimum of 100%.

Ø A y-o-y increase in the net cash flows from operating activities is mainly driven by higher underwriting cash flows of the business as compared to 2023 coupled with the positive impact of the consolidation of Ardi's portfolio.

Ø GEL 8.8 million dividends were paid to GCAP in 4Q24 (GEL 25.4 million in FY24).

 

 

 

Discussion of Hospitals Business Results[31]

The hospitals business, where GCAP owns 100% equity, is the largest healthcare market participant in Georgia, comprised of 7 Large and Specialty Hospitals, providing secondary and tertiary level healthcare services across Georgia and 27 Regional and Community Hospitals, providing outpatient and basic inpatient services.

4Q24 and FY24 performance (GEL '000), Hospitals[32]

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue, net[33]	90,210	77,638	16.2%	332,710	313,748	6.0%
Gross Profit	32,889	23,046	42.7%	114,627	104,616	9.6%
Gross profit margin	35.8%	28.9%	6.9 ppts	33.9%	32.8%	1.1 ppts
Operating expenses (ex. IFRS 16)	(15,507)	(15,138)	2.4%	(59,461)	(58,487)	1.7%
EBITDA (ex. IFRS 16)	17,382	7,908	NMF	55,166	46,129	19.6%
EBITDA margin (ex. IFRS 16)	18.9%	9.9%	9.0 ppts	16.3%	14.5%	1.8 ppts
Net loss (ex. IFRS 16)	(355)	(27,322)	-98.7%	(13,132)	(36,615)	-64.1%
CASH FLOW HIGHLIGHTS
Cash flow from/(used in) operating activities (ex. IFRS 16)	25,778	(3,697)	NMF	48,828	10,621	NMF
EBITDA to cash conversion (ex. IFRS 16)	148.3%	-46.8%	NMF	88.5%	23.0%	65.5 ppts
Cash flow used in investing activities[34]	(14,656)	(13,031)	12.5%	(25,166)	(44,746)	-43.8%
Free cash flow (ex. IFRS 16)[35]	10,932	(17,226)	NMF	25,462	(35,069)	NMF
Cash flow from financing activities (ex. IFRS 16)	11,067	26,066	-57.5%	(5,307)	22,362	NMF
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	705,367	703,165	0.3%	707,614	-0.3%
Of which, cash balance and bank deposits	27,600	5,454	NMF	9,753	NMF
Of which, securities and loans issued	5,995	7,827	-23.4%	9,557	-37.3%
Total liabilities	366,432	365,800	0.2%	357,658	2.5%
Of which, borrowings	296,770	278,495	6.6%	281,352	5.5%
Total equity	338,935	337,365	0.5%	349,956	-3.1%

INCOME STATEMENT HIGHLIGHTS

Ø The Large and Specialty Hospitals and Regional and Community Hospitals represent approximately 70% and 30%, respectively, of the consolidated hospitals' business revenue.

Total revenue breakdown (unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Total revenue, net	90,210	77,638	16.2%	332,710	313,748	6.0%
Of which, Large and Specialty Hospitals	61,965	51,991	19.2%	226,648	204,690	10.7%
Of which, Regional and Community Hospitals	28,474	25,966	9.7%	106,962	110,551	-3.2%
Of which, Inter-business eliminations	(229)	(319)	-28.2%	(900)	(1,493)	-39.7%

Ø The total revenue growth in 4Q24 and FY24 was primarily driven by the rebound to normal operational levels following mandatory regulatory renovations across all our hospitals, most of which occurred between the second half of 2023 and the first half of 2024. These renovations led to the phased closure of certain sections of our healthcare facilities, resulting in reduced patient intake during that period. As of 31 December 2024, all 34 hospitals have completed the required renovations and fully meet regulatory requirements.

o  The performance of the Large and Specialty Hospitals in 4Q24 and FY24 further reflects the positive outcome of the business' efforts to expand its range of high-margin outpatient services. In 4Q24, these services accounted for 35.4% of the revenue of Large and Specialty Hospitals, marking a 3.7 ppts y-o-y increase (34.2% in FY24, up 3.0 ppts y-o-y).

o  The completion of the renovation works was also evident in the performance of our Regional and Community Hospitals, which saw revenue growth of 9.7% y-o-y in 4Q24 (down 3.2% y-o-y in FY24), notwithstanding the absence of the revenues from "Batumi Hospital", one of the regional hospitals divested in 4Q23.

Ø As a result, the combined revenue of the hospitals business was up by 16.2% and 6.0% y-o-y in 4Q24 and FY24, respectively. Adjusted for the sale of the above-mentioned "Batumi Hospital", the combined revenue was up by 22.8% y-o-y in 4Q24 (up 11.9% in FY24).

Ø The changes in the gross profit margin, apart from the revenue developments described above, reflect the following trends in direct salary and materials rates^[36] and utility costs:

o  Approximately 50% of direct salaries are fixed. This, coupled with significantly increased revenue, led to a 2.7 ppts improvement in the direct salary rate to 39.7% in 4Q24, offsetting the impact of minimum salary requirements introduced by the State in January 2024. However, this regulation had a more meaningful effect on a full-year basis, leading to a 0.8 ppts y-o-y increase in the direct salary rate to 40.4% in FY24.

o  The materials rate improved by 2.7 ppts y-o-y to 15.4% in 4Q24 (down 0.9 ppts y-o-y to 16.3% in FY24), reflecting significant optimisations achieved in tender participation processes and overall improvement in inventory management across the hospitals network.

o  Utilities and other costs were up by 2.3% y-o-y in 4Q24, reflecting the rebound to normal operational levels, as described above. These costs were down by 9.5% y-o-y in FY24.

Ø Operating expenses (excl. IFRS 16) increased modestly, up by 2.4% and 1.7% y-o-y in 4Q24 and FY24, respectively, mainly due to higher salary costs associated with an increased headcount to support the expansion of the services and the development of the Regional and Community hospitals' head-office following the strategic reorganisation in late 2023.

Ø Consequently, EBITDA (excluding IFRS 16) was up by 119.8% y-o-y in 4Q24 (up 19.6% y-o-y in FY24).

(Unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Total EBITDA (excl. IFRS 16), breakdown	17,382	7,908	NMF	55,166	46,129	19.6%
Of which, Large and Specialty Hospitals	12,674	6,585	92.5%	41,580	34,339	21.1%
Of which, Regional and Community Hospitals	4,709	1,319	NMF	13,586	11,791	15.2%

Ø Adjusted for the sale of the "Batumi Hospital", the combined EBITDA (excluding IFRS 16) was up by 131.5% y-o-y in 4Q24 (up 25.1% in FY24).

Ø Net interest expense (excluding IFRS 16) was up by 6.9% y-o-y in 4Q24, due to increased borrowings to finance the capex investments, as outlined below.

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø Capex investment was GEL 14.8 million in 4Q24 (GEL 53.0 million in FY24), comprising: a) development capex of GEL 7.0 million in 4Q24 (GEL 14.8 million in FY24) to expand service offerings and upgrade medical equipment, b) capex related to the new regulations and obtaining required accreditations in the amount of GEL 2.2 million in 4Q24 (GEL 10.2 million in FY24), and c) the maintenance capex of GEL 5.0 million in 4Q24 (GEL 26.0 million in FY24).

Ø The EBITDA to cash conversion ratio was at 148.3% in 4Q24 (88.5% in FY24), reflecting the receipt of the delayed receivables from the State.

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø The business key operating performance highlights for 4Q24 and FY24 are noted below:

Key metrics (unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Number of admissions (thousands):	388.2	388.3	0.0%	1,568.4	1,527.2	2.7%
Of which, Large and Specialty Hospitals	192.4	165.5	16.3%	729.0	599.9	21.5%
Of which, Regional and Community Hospitals[37]	195.8	222.8	-12.1%	839.4	927.3	-9.5%
Occupancy rates:
Of which, Large and Specialty Hospitals	68.3%	54.6%	13.7 ppts	66.5%	53.5%	13.0 ppts
Of which, Regional and Community Hospitals	58.0%	45.9%	12.1 ppts	58.1%	44.3%	13.8 ppts

Ø The decrease in admissions at Regional and Community Hospitals reflects a favourable shift in the revenue mix, which resulted in a significant improvement at the EBITDA level, as outlined above.

 

Discussion of Renewable Energy Business Results

The renewable energy business operates three wholly-owned commissioned renewable assets: 30MW Mestiachala HPP, 20MW Hydrolea HPPs and 21MW Qartli wind farm. In addition, the business has a pipeline of renewable energy projects in varying stages of development. The renewable energy business is 100% owned by Georgia Capital. As electricity sales in Georgia is a dollar business, the financial data below is presented in US$.

4Q24 and FY24 performance (US$ '000), Renewable Energy[38]

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue	2,625	2,978	-11.9%	16,086	14,449	11.3%
Of which, PPA[39]	1,750	2,431	-28.0%	7,562	8,529	-11.3%
Of which, Non-PPA	875	547	60.0%	8,524	5,920	44.0%
Operating expenses	(937)	(947)	-1.1%	(4,006)	(4,068)	-1.5%
EBITDA	1,688	2,031	-16.9%	12,080	10,381	16.4%
EBITDA margin	64.3%	68.2%	-3.9 ppts	75.1%	71.8%	3.3 ppts
Net loss	(4,167)	(1,098)	NMF	(1,185)	(666)	-77.9%
CASH FLOW HIGHLIGHTS
Cash flow from operating activities	3,205	3,035	5.6%	12,320	9,877	24.7%
Cash flow used in investing activities	(1,541)	(398)	NMF	(3,570)	(3,561)	0.3%
Cash flow used in financing activities	(512)	(2,581)	-80.2%	(13,094)	(5,170)	NMF
Repayment of borrowings	(340)	(4)	NMF	(7,440)	(13)	NMF
Dividends paid out	-	-	NMF	(4,500)	(2,000)	NMF
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	116,620	117,529	-0.8%	122,579	-4.9%
Of which, cash balance	5,880	4,872	20.7%	10,525	-44.1%
Total liabilities	79,123	78,560	0.7%	83,911	-5.7%
Of which, borrowings	73,644	75,382	-2.3%	80,935	-9.0%
Total equity	37,497	38,970	-3.8%	38,667	-3.0%
INCOME STATEMENT HIGHLIGHTS (GEL)	4Q24	4Q23	Change	FY24	FY23	Change
Revenue	7,278	8,048	-9.6%	43,977	38,065	15.5%
EBITDA	4,675	5,488	-14.8%	33,001	27,357	20.6%

INCOME STATEMENT HIGHLIGHTS

Ø An 11.9% y-o-y decline in 4Q24 revenue was driven by an 11.1% y-o-y decrease in electricity generation due to unfavourable weather conditions during the quarter. The average electricity selling price remained largely flat at 58.1 US$/MWh in 4Q24 (down 0.9% y-o-y)

Ø The FY24 revenue was up by 11.3% y-o-y, reflecting the resumption of operations of two power-generating units of Hydrolea HPPs, which were taken offline between November 2022 to June 2023 due to previously planned phased rehabilitation works. The average electricity selling price stood at 57.0 US$/MWh in FY24 (up 0.3% y-o-y).

4Q24 and FY24 revenue and generation breakdown by power assets:

(Unaudited)	4Q24				FY24
US$ '000, unless otherwise noted	Revenue from electricity sales	Change y-o-y	Electricity generation (MWh)	Change y-o-y	Revenue from electricity sales	Change y-o-y	Electricity generation (MWh)	Change y-o-y
30MW Mestiachala HPP	357	-25.6%	6,485	-25.7%	5,605	2.1%	100,885	1.2%
20MW Hydrolea HPPs	1,142	-5.9%	21,355	-4.3%	5,444	61.7%	103,655	51.7%
21MW Qartli wind farm	1,126	-12.3%	17,317	-12.4%	5,037	-9.9%	77,500	-9.9%
Total	2,625	-11.9%	45,157	-11.1%	16,086	11.3%	282,040	11.0%

Ø The operating expenses were well-controlled, down 1.1% and 1.5% y-o-y in 4Q24 and FY24, respectively.

Ø The developments described above, led to a 16.9% y-o-y decrease in EBITDA in 4Q24 (up 16.4% y-o-y in FY24).

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø In 2024, the business repurchased and cancelled US$ 7.0 million of its green bonds. As a result, the gross debt balance of the business currently stands at US$ 73.0 million, leading to a 7.7% and 6.1% y-o-y decrease in the net interest expense in 4Q24 and FY24, respectively.

Ø The business paid US$ 4.5 million dividends to GCAP in FY24.

 

 

 

Discussion of Education Business Results

Our education business currently combines majority stakes in four private school brands operating across seven campuses acquired over the period 2019-2023: British-Georgian Academy and British International School of Tbilisi (70% stake), the leading schools in the premium and international segments; Buckswood International School (80% stake), well-positioned in the midscale segment and Green School (80%-90% ownership), well-positioned in the affordable segment.

4Q24 and FY24 performance (GEL '000), Education[40]

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue	22,518	19,346	16.4%	68,174	55,491	22.9%
Operating expenses	(14,744)	(12,936)	14.0%	(51,559)	(41,053)	25.6%
EBITDA	7,774	6,410	21.3%	16,615	14,438	15.1%
EBITDA Margin	34.5%	33.1%	1.4 ppts	24.4%	26.0%	-1.6 ppts
Net profit	6,066	8,223	-26.2%	12,708	13,263	-4.2%
CASH FLOW HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Net cash flows from/(used in) operating activities	630	(115)	NMF	22,496	17,363	29.6%
Net cash flows used in investing activities	(4,087)	(3,504)	16.6%	(22,367)	(31,254)	-28.4%
Net cash flows (used in)/from financing activities	(79)	1,634	NMF	4,366	15,897	-72.5%
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	217,380	217,932	-0.3%	191,723	13.4%
Of which, cash	12,081	15,527	-22.2%	7,535	60.3%
Total liabilities	72,432	80,628	-10.2%	62,149	16.5%
Of which, borrowings	32,757	34,234	-4.3%	27,750	18.0%
Total equity	144,948	137,304	5.6%	129,574	11.9%

INCOME STATEMENT HIGHLIGHTS

Ø The 16.4% y-o-y increase in 4Q24 revenues (up 22.9% y-o-y in FY24) was driven by a) organic growth through strong intakes and a ramp-up of the utilisation and b) expansion of the business through the launch of a new campus in the mid-scale segment and the acquisition of the new campus in the affordable segment during 2023.

Ø Operating expenses were up by 14.0% y-o-y in 4Q24 (up 25.6% y-o-y in FY24), mainly reflecting increased salary, catering and utility expenses, in line with the expansion of the business.

Ø Consequently, EBITDA was up by 21.3% in 4Q24 (up 15.1% y-o-y in FY24).

Ø EBITDA margin was down by 1.6 ppts y-o-y in FY24, while it increased by 1.4 ppts y-o-y in 4Q24, indicating steady progress in the capacity utilisation of the newly launched campuses.

Ø Net income was down 26.2% y-o-y in 4Q24 (down 4.2% y-o-y in FY24), reflecting mainly the absence of a one-off gain recorded in 2023.

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø Cash collection rate for the 2024-2025 academic year was at 77.1% as of 31-Dec-24, in line with last year's level.

Ø Investing cash outflows of GEL 4.1 million and GEL 22.4 million in 4Q24 and FY24, respectively, reflect the investments related to the expansion of the existing campuses in the midscale and affordable segments.

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø In 2024, the total learner capacity increased by 825 learners to 8,095 learners, of which the capacity of the midscale segment expanded to 1,645 learners (up by 225 learners) and the capacity of the affordable segment increased to 5,300 learners (up by 600 learners).

Ø The total number of learners increased by 722 learners y-o-y to 6,549 learners at 31-Dec-24.

Ø The utilisation rate for the total 8,095 learner capacity was up by 0.7 ppts y-o-y to 80.9% as at 31-Dec-24.

o  The utilisation rate for the pre-expansion 2,810 learner capacity was 100%.

o  The utilisation of the newly added capacity of 5,285 learners was 70.7%.

Ø The number of campuses across the different segments is noted below:

(Unaudited)	Dec-24	Sep-24	Change (q-o-q)	Dec-23	Change (y-o-y)
Total number of campuses	7	7	-	7	-
Premium and International segment	1	1	-	1	-
Mid-scale segment	2	2	-	2	-
Affordable segment	4	4	-	4	-

 

 

 

Discussion of Clinics and Diagnostics Business Results[41]

The clinics and diagnostics business, where GCAP owns a 100% equity interest, is the second largest healthcare market participant in Georgia after our hospitals business. The business comprises two segments: 1) 16 polyclinics (providing outpatient diagnostic and treatment services) and 14 lab retail points at GPC pharmacies; 2) Diagnostics, operating the largest laboratory in the entire Caucasus region - "Mega Lab".

4Q24 and FY24 performance (GEL '000), Clinics and Diagnostics[42]

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue, net[43]	20,959	17,047	22.9%	74,517	61,723	20.7%
Of which, clinics	16,496	13,717	20.3%	59,762	49,170	21.5%
Of which, diagnostics	6,319	4,950	27.7%	22,181	18,435	20.3%
Of which, inter-business eliminations	(1,856)	(1,620)	14.6%	(7,426)	(5,882)	26.2%
Gross Profit	10,785	8,350	29.2%	37,832	29,240	29.4%
Gross profit margin	51.3%	48.9%	2.4 ppts	50.7%	47.2%	3.5 ppts
Operating expenses (ex. IFRS 16)	(6,519)	(5,429)	20.1%	(23,661)	(19,245)	22.9%
EBITDA (ex. IFRS 16)	4,266	2,921	46.0%	14,171	9,995	41.8%
EBITDA margin (ex. IFRS 16)	20.3%	17.1%	3.2 ppts	19.0%	16.1%	2.9 ppts
Net profit/(loss) (ex. IFRS 16)	1,886	1,008	87.1%	3,513	(593)	NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16)	6,190	2,274	NMF	17,381	6,901	NMF
EBITDA to cash conversion (ex. IFRS 16)	145.1%	77.9%	67.2 ppts	122.7%	69.0%	53.7 ppts
Cash flow (used in)/from investing activities	(4,460)	8,951	NMF	(9,820)	(1,451)	NMF
Free cash flow (ex. IFRS 16)[44]	4,019	14,780	-72.8%	7,719	10,508	-26.5%
Cash flow used in financing activities (ex. IFRS 16)	(5,884)	(9,960)	-40.9%	(7,786)	(5,982)	30.2%
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	135,999	140,638	-3.3%	135,848	0.1%
Of which, cash balance and bank deposits	4,294	8,459	-49.2%	4,500	-4.6%
Of which, securities and loans issued	2,000	-	NMF	8,357	-76.1%
Total liabilities	82,450	86,338	-4.5%	83,901	-1.7%
Of which, borrowings	38,416	43,871	-12.4%	48,630	-21.0%
Total equity	53,549	54,300	-1.4%	51,947	3.1%

Discussion of results, Clinics (GEL '000)

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue, net	16,496	13,717	20.3%	59,762	49,170	21.5%
Gross Profit	8,566	6,985	22.6%	30,550	24,550	24.4%
Gross profit margin	51.9%	50.8%	1.1 ppts	51.0%	49.7%	1.3 ppts
Operating expenses (ex. IFRS 16)	(5,533)	(4,420)	25.2%	(19,571)	(15,745)	24.3%
EBITDA (ex. IFRS 16)	3,033	2,565	18.2%	10,979	8,805	24.7%
EBITDA margin (ex. IFRS 16)	18.4%	18.7%	-0.3 ppts	18.3%	17.8%	0.5 ppts
Net profit (ex. IFRS 16)	1,140	1,113	2.4%	2,165	127	NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16)	5,783	2,042	NMF	17,178	8,214	109.1%
EBITDA to cash conversion (ex. IFRS 16)	190.7%	79.6%	111.1 ppts	156.5%	93.3%	63.2 ppts
Cash flow (used in)/from investing activities[45]	(5,679)	9,255	NMF	(10,682)	(194)	NMF
Free cash flow (ex. IFRS 16)	3,820	14,855	-74.3%	8,081	13,094	-38.3%
Cash flow used in financing activities (ex. IFRS 16)	(4,439)	(10,260)	-56.7%	(6,683)	(7,649)	-12.6%
BALANCE SHEET HIGHLIGHTS	31-Dec-24	30-Sep-24	Change	31-Dec-23	Change
Total assets	105,290	109,427	-3.8%	105,789	-0.5%
Of which, cash balance and bank deposits	4,094	8,438	-51.5%	4,261	-3.9%
Of which, securities and loans issued	3,465	-	NMF	8,357	-58.5%
Total liabilities	71,033	73,686	-3.6%	71,840	-1.1%
Of which, borrowings	32,495	36,674	-11.4%	42,340	-23.3%
Total equity	34,257	35,741	-4.2%	33,949	0.9%

INCOME STATEMENT HIGHLIGHTS

Ø The 20.3% y-o-y increase in 4Q24 revenue (up 21.5% y-o-y in FY24) reflects:

o  The increased demand for high revenue-generating services as well as the growth in the number of registered patients, driven by the business' proactive approach to customer acquisition and service enhancements.

o  Ramp-up of two new ambulatory centres launched in 2023

o  The acquisition of a portfolio of c.27,000 new customers in June 2024, further contributing to the overall top-line growth in 4Q24 and FY24.

Ø The gross profit margin improved by 1.1 ppts y-o-y in 4Q24 (1.3 ppts y-o-y improvement in FY24), reflecting strong revenue growth, while a significant portion of costs remained fixed.

Ø Operating expenses (excl. IFRS 16) were up by 25.2% in 4Q24 and 24.3% y-o-y in FY24, reflecting increased salary and rent expenses in line with the expansion of the business, as well as the sale of one of the polyclinic buildings in 3Q23 and its leaseback in 2Q24.

Ø The developments described above translated into an 18.2% y-o-y increase in EBITDA in 4Q24 (up 24.7% y-o-y in FY24).

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø The EBITDA to cash conversion ratio was at 190.7% in 4Q24 (156.5% in FY24), reflecting the strong business performance as well as the collection of delayed receivables from the State.

Ø In 4Q24, the business spent GEL 2.4 million on capex, primarily related to the expansion of services and the polyclinics chain. Capex investment in FY24 amounted to GEL 8.7 million.

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø The business key operating performance highlights are noted below:

(Unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Number of admissions (thousands)	472	435	8.7%	1,763	1,583	11.4%
	Dec-24	Sep-24	Change	Dec-23	Change
Number of polyclinics[46]	16	16	-	16	-
Number of registered patients in polyclinics in Tbilisi	c.340,000	c.337,000	0.9%	c.301,000	12.8%

 

 

Discussion of results, Diagnostics (GEL '000)

(Unaudited)
INCOME STATEMENT HIGHLIGHTS	4Q24	4Q23	Change	FY24	FY23	Change
Revenue, net[47]	6,319	4,950	27.7%	22,181	18,435	20.3%
Gross Profit	2,219	1,365	62.6%	7,282	4,690	55.3%
Gross profit margin	34.9%	27.6%	7.3 ppts	32.8%	25.4%	7.4 ppts
Operating expenses (ex. IFRS 16)	(986)	(1,009)	-2.3%	(4,090)	(3,500)	16.9%
EBITDA (ex. IFRS 16)	1,233	356	NMF	3,192	1,190	NMF
EBITDA margin (ex. IFRS 16)	19.4%	7.2%	12.2 ppts	14.4%	6.5%	7.9 ppts
Net profit/(loss) (ex. IFRS 16)	746	(105)	NMF	1,348	(1,172)	NMF

 

INCOME STATEMENT HIGHLIGHTS             

Ø The revenue developments in 4Q24 and FY24 reflect the increased revenues from both retail and business-to-business (B2B) clients, up 44.9% and 38.7% y-o-y in 4Q24, respectively (up 27.4% and 11.0% in FY24, respectively). This reflects the business' enhanced efforts on customer acquisition and service diversification, particularly in the high-margin category.

Ø Materials and direct salary rates improved by 3.7 ppts and 4.3 ppts y-o-y in 4Q24, respectively (3.6 ppts and 3.1 ppts y-o-y improvement in FY24, respectively), which along with increased revenues, reflect significant inventory management optimisations.

Ø As a result, the business recorded a 62.6% y-o-y increase in gross profit and a 3.5x y-o-y increase in EBITDA in 4Q24 (up 55.3% and 2.7x y-o-y in FY24, respectively).

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø The key operating performance highlights for 4Q24 and FY24 are presented below:

(Unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Number of patients served (thousands)	215	201	6.8%	808	779	3.7%
Number of tests performed (thousands)	708	668	6.0%	2,712	2,481	9.3%
Average revenue per test GEL	9.0	7.4	21.1%	8.2	7.4	10.3%
Average number of tests per patient	3.3	3.3	-	3.4	3.2	5.4%

 

 

 

 

Discussion of Other Portfolio Results

The four businesses in our "other" private portfolio are Auto Service, Beverages, Hospitality and Housing. They had a combined value of GEL 160.3 million at 31-Dec-24, which represents 4.3% of our total portfolio.

4Q24 & FY24 aggregated performance highlights (GEL '000), Other Portfolio

(Unaudited)	4Q24	4Q23	Change	FY24	FY23	Change
Revenue	125,278	148,279	-15.5%	564,740	575,358	-1.8%
EBITDA	13,261	7,337	80.7%	65,751	42,785	53.7%
Net cash flows from operating activities	(5,379)	(7,076)	24.0%	28,153	(7,890)	NMF

 

Ø Auto Service | The auto service business includes a periodic technical inspection (PTI) business, and a car services and parts business.

o  Periodic technical inspection (PTI) business | PTI business' revenue was up by 0.8% y-o-y to GEL 5.7 million in 4Q24 (up by 12.3% y-o-y to GEL 23.4 million in FY24), resulting from a 1.1% y-o-y increase in the number of total cars serviced (up 11.7% y-o-y in FY24). EBITDA was up by 9.4% and 18.8% y-o-y in 4Q24 and FY24, respectively, reflecting enhancements in cost efficiency. In 4Q24, the business paid its first dividend to GCAP, since inception in 2018, totalling GEL 1.0 million.

o  Car services and parts business | In 4Q24, revenue was up by 10.1% y-o-y to GEL 25.2 million (up 11.3% y-o-y to GEL 70.5 million in FY24) reflecting an increase in the wholesale, retail and corporate segments. Similarly, the gross profit was up by 19.6% to GEL 6.8 million in 4Q24 and up 12.8% to GEL 18.4 million in FY24, y-o-y. In 4Q24, operating expenses increased by 14.8% y-o-y (up 19.5% y-o-y in FY24), reflecting the business growth. As a result, the business posted a GEL 2.4 million EBITDA in 4Q24, up 29.2% y-o-y (GEL 4.0 million in FY24, down 6.1% y-o-y).

Ø Beverages | The beverages business combines beer and distribution and wine business. At the end of 2024, GCAP sold 80% of its holding in its beer and distribution business to Royal Swinkels, an international strategic investor, for net cash proceeds of c.US$ 63 million. Completion of the transaction and the receipt of full sales proceeds occurred on 23 December 2024. Net revenue of the wine business remained largely flat, down 0.2% to GEL 14.9 million in 4Q24 (down by 2.5% y-o-y to GEL 56.7 million in FY24), reflecting higher loss recorded from the revaluation of grapes in 4Q24 compared to 4Q23. Operating expenses decreased by 9.8% y-o-y in 4Q24 (down by 7.7% y-o-y in FY24) due to the business' cost-saving initiatives. Consequently, EBITDA was down by 63.8% to GEL 0.5 million in 4Q24 (up by 15.0% to GEL 5.0 million in FY24).

Ø Real estate businesses | The combined EBITDA of the real estate businesses increased by GEL 7.6 million y-o-y to GEL 3.9 million in 4Q24 (up by GEL 20.7 million to GEL 13.5 million in FY24), mainly resulting from the reassessment of the construction progress for ongoing residential projects at our housing development business and strong operating performance of the hospitality business.

 

 

 

RECONCILIATION OF ADJUSTED INCOME STATEMENT TO IFRS INCOME STATEMENT

 

The table below reconciles the adjusted income statement to the IFRS income statement. Adjustments to reconcile adjusted income statement with IFRS income statement mainly relate to eliminations of income, expense and certain equity movement items recognised at JSC Georgia Capital, which are subsumed within gross investment income/(loss) in IFRS income statement of Georgia Capital PLC.

	4Q24, unaudited			FY24, unaudited
GEL '000, unless otherwise noted (Unaudited)	Adjusted IFRS income statement	Adjustment	IFRS income statement	Adjusted IFRS income statement	Adjustment	IFRS income statement
Dividend income	9,826	20,083	29,909	201,752	(76,643)	125,109
Interest income	2,076	(2,076)	-	7,477	(7,477)	-
Realised/unrealised gain/(loss) on liquid funds	6	(6)	-	(796)	796	-
Interest expense	(9,101)	9,101	-	(35,589)	35,589	-
Gross operating income	2,807	27,102	29,909	172,844	(47,735)	125,109
Operating expenses (administrative, salaries and other employee benefits)	(8,345)	8,345	-	(35,280)	35,280	-
GCAP net operating (loss)/income	(5,538)	35,447	29,909	137,564	(12,455)	125,109
Total investment return/gain on investments at fair value	451,023	(39,363)	411,660	233,570	9,419	242,989
Administrative expenses, salaries and other employee benefits	-	(1,370)	(1,370)	-	(5,749)	(5,749)
Income before foreign exchange movements and non-recurring expenses	445,485	(5,286)	440,199	371,134	(8,785)	362,349
Net foreign currency (loss)/gain	(9,417)	9,204	(213)	(18,662)	18,699	37
Non-recurring expenses	(480)	480	-	(2,148)	2,148	-
Net losses from investments measured at FVPL	-	-	-	-	(112)	(112)
Net income	435,588	4,398	439,986	350,324	11,950	362,274

 

 

 

DETAILED FINANCIAL INFORMATION

IFRS STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

GEL '000, unless otherwise noted	2024, unaudited	2023, audited
Gains on investments at fair value	242,989	568,351
Dividend income	125,109	47,659
Gross investment profit	368,098	616,010
General and administrative expenses	(3,958)	(4,476)
Salaries and other employee benefits	(1,791)	(2,087)
Profit before foreign exchange and non-recurring items	362,349	609,447
Net foreign currency gain/(loss)	37	(955)
Net (losses)/gains from investment securities measured at FVPL	(112)	125
Profit before income taxes	362,274	608,617
Income tax	-	-
Profit for the year	362,274	608,617
Other comprehensive income	-	-
Total comprehensive income for the year	362,274	608,617
Earnings per share (GEL):
- basic	9.7017	15.4102
- diluted	9.2987	14.9311

 

 

 

 

 

 

IFRS STATEMENT OF FINANCIAL POSITION OF GEORGIA CAPITAL PLC

GEL '000, unless otherwise noted	31 December 2024 Unaudited	31 December 2023 Audited
Assets
Cash and cash equivalents[48]	3,521	12,319
Investment in redeemable securities	-	3,517
Prepayments	1,396	976
Equity investments at fair value	3,606,400	3,363,411
Total assets	3,611,317	3,380,223
Liabilities
Other liabilities	2,304	1,711
Total liabilities	2,304	1,711
Equity
Share capital	1,300	1,420
Additional paid-in capital and merger reserve	238,311	238,311
Treasury shares	(2)	(2)
Retained earnings	3,369,404	3,138,783
Total equity	3,609,013	3,378,512
Total liabilities and equity	3,611,317	3,380,223

 

 

IFRS STATEMENT OF CASH FLOWS OF GEORGIA CAPITAL PLC

GEL '000, unless otherwise noted	2024 Unaudited	2023 Audited
Cash flows from operating activities
Salaries and other employee benefits paid	(1,334)	(1,546)
General, administrative and operating expenses paid	(5,066)	(4,685)
Net cash flows used in operating activities before income tax	(6,400)	(6,231)
Income tax paid	-	-
Net Cash flow used in operating activities	(6,400)	(6,231)
Cash flows from investing activities
Purchase of redeemable securities	-	(3,382)
Proceeds from redemption of redeemable securities	3,379	-
Dividends received	125,109	47,659
Cash flows from investing activities	128,488	44,277
Cash flows from financing activities
Other purchases of treasury shares	(130,821)	(47,834)
Acquisition of treasury shares under share-based payment plan	(304)	(203)
Net cash used in financing activities	(131,125)	(48,037)
Effect of exchange rates changes on cash and cash equivalents	239	(1,051)
Net decrease in cash and cash equivalents	(8,798)	(11,042)
Cash and cash equivalents, beginning of the year	12,319	23,361
Cash and cash equivalents, end of the year	3,521	12,319

 

 

IFRS STATEMENT OF CHANGES IN EQUITY OF GEORGIA CAPITAL PLC

Unaudited, GEL '000, unless otherwise noted	Share capital	Additional paid-in capital and merger reserve	Treasury shares	Retained earnings	Total
1 January 2024	1,420	238,311	(2)	3,138,783	3,378,512
Profit for the year	-	-	-	362,274	362,274
Total comprehensive income for the year	-	-	-	362,274	362,274
Increase in equity arising from share-based payments	-	-	-	457	457
Cancellation of shares	(120)	-	120	-	-
Purchase of treasury shares	-	-	(120)	(132,110)	(132,230)
31 December 2024	1,300	238,311	(2)	3,369,404	3,609,013

 

 

 

 

SEGMENT INFORMATION - RECONCILIATION TO IFRS FINANCIAL STATEMENTS (2024)

Unaudited, GEL '000, unless otherwise noted	Georgia Capital PLC	Aggregation with JSC Georgia Capital	Elimination of double effect on investments	Aggregated Holding Company	Reclassifications	NAV Statement
Cash and cash equivalents	3,521	167,801	-	171,322	(171,322)	-
Amounts due from credit institutions	-	98,844	-	98,844	(98,844)	-
Marketable securities	-	7,869	-	7,869	(7,869)	-
Prepayments	1,396	-	-	1,396	(1,396)	-
Other assets, net	-	5,017	-	5,017	(5,017)	-
Equity investments at fair value	3,606,400	3,720,071	(3,564,981)	3,761,490	-	3,761,490
Total assets	3,611,317	3,999,602	(3,564,981)	4,045,938	(284,448)	3,761,490
Debt securities issued	-	432,460	-	432,460	(432,460)	-
Other liabilities	2,304	2,161	-	4,465	(4,465)	-
Total liabilities	2,304	434,621	-	436,925	(436,925)	-
Net Debt	-	-	-	-	(154,425)	(154,425)
of which, Cash and liquid funds	-	-	-	-	278,237	278,237
of which, Gross Debt	-	-	-	-	(432,662)	(432,662)
Net other assets/ (liabilities)	-	-	-	-	1,948	1,948
Total Equity/NAV	3,609,013	3,564,981	(3,564,981)	3,609,013	-	3,609,013

 

 

SELECTED EXPLANATORY NOTES TO THE IFRS FINANCIAL STATEMENTS OF GEORGIA CAPITAL PLC (UNAUDITED).

Numbers are presented in GEL thousands, unless noted otherwise.

GOING CONCERN

The Board of Directors of Georgia Capital has made an assessment of the Company's ability to continue as a going concern and is satisfied that it has the resources to continue in business for a period of at least 12 months from the date of approval of the financial statements, i.e. the period ending 31 March 2026. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern for the foreseeable future. Therefore, the financial statements continue to be prepared on a going concern basis.

The Directors have made an assessment of the appropriateness of the going concern basis of preparation and reviewed Georgia Capital's liquidity outlook for the period ending 31 March 2026.

The main source of cash inflow for GCAP PLC is capital redemption and dividend income from JSC GCAP, which holds the liquid assets to support the liquidity needs of the Company as well. As at 31 December 2024, JSC GCAP holds cash in the amount of GEL 167,801, amounts due from credit institutions in the amount of GEL 98,844 and marketable debt securities in the amount of GEL 7,869. Securities are considered to be highly liquid, as they are debt instruments listed on international and local markets.

The liquidity needs of the Group during the Going Concern review period mainly consist of the coupon payments on JSC GCAP sustainability-linked bonds and the operating costs of running the holding companies and capital allocations to its portfolio companies. The liquidity outlook also assumes dividend income from the private portfolio companies (retail (pharmacy), healthcare, renewable energy, insurance businesses and auto service) and Lion Finance Group PLC. Capital allocations are assumed in relation to investment stage companies (Renewable Energy and Education).

On August 3, 2023, JSC GCAP issued US$ 150 million sustainability-linked local bonds in Georgia, with an 8.5% coupon rate, payable in August 2028. The proceeds from the transaction, together with GCAP's existing liquid funds, were fully used to redeem GCAP's US$ 300 million Eurobonds. Following these transactions, GCAP's gross debt balance decreased from US$ 300 million to US$ 150 million. The Directors remain confident that, given the strong liquidity and the Group's track record of proven access to capital, GCAP will successfully continue to service its existing bonds.

The Company has been increasingly assessing climate related risk and opportunities that may be present to the Group. During the going concern period no significant risk has been associated to the Group and portfolio companies that would materially impact their ability to generate sufficient cash and continue as a going concern.

Based on the considerations outlined above, management of Georgia Capital concluded that the going concern basis of preparation remains appropriate for these financial statements.

The Group performed stress testing for the assessment period, which involved modelling the impact of a combination of severe and plausible risks. Based on the results of the stress tests, the directors concluded that the Group remains solvent with solid financial position and has sufficient cash and liquid investment securities to withstand the distressed scenario.

 

FAIR VALUE MEASUREMENTS

VALUATION TECHNIQUES

The following is a description of the determination of fair value for financial instruments which are recorded at fair value using valuation techniques. These incorporate the Company's estimate of assumptions that a market participant would make when valuing the instruments.

Assets for which fair value approximates carrying value

For financial assets and financial liabilities that are liquid or have a short-term maturity (less than three months), it is assumed that the carrying amounts approximate to their fair value. This assumption is also applied to demand deposits, savings accounts without a specific maturity and variable rate financial instruments.

Fixed rate financial instruments

The fair value of fixed rate financial assets and liabilities carried at amortised cost are estimated by comparing market interest rates when they were first recognised with current market rates offered for similar financial instruments. The estimated fair value of fixed interest-bearing deposits is based on discounted cash flows using prevailing money-market interest rates for debts with similar credit risk and maturity.

Investment in subsidiaries

Equity investments at fair value include investments in subsidiaries at fair value through profit or loss representing 100% interest of JSC Georgia Capital and 92% in Georgian Beverages Holding Limited. Georgia Capital PLC holds an investment in JSC Georgia Capital (an investment entity on its own), which holds a portfolio of investments, both meet the definition of investment entity and Georgia Capital PLC measures its investment in JSC Georgia Capital at fair value through profit or loss. Investments in investment entity subsidiaries and loans issued are accounted for as financial instruments at fair value through profit and loss in accordance with IFRS 9. Debt securities owned are measured at fair value. In the ordinary course of business, the net asset value of investment entity subsidiaries is considered to be the most appropriate to determine fair value. Starting from December 2024, Georgia Capital PLC also holds an investment in Georgian Beverages Holding Limited which is measured at fair value through profit or loss. Through this entity, Georgia Capital PLC holds its minority interest in the beer and distribution business. JSC Georgia Capital's net asset value as of 31 December 2024 and 31 December 2023 is determined as follows:

	31 December 2024	31 December 2023
Assets
Cash and cash equivalents	167,801	51,138
Amounts due from credit institutions	98,844	8,678
Marketable securities	7,869	18,203
Investment in redeemable securities	-	14,068
Equity investments at fair value	3,720,071	3,671,945
Of which listed and observable investments	1,609,035	1,384,847
Lion Finance Group	1,421,035	1,225,847
Water Utility	188,000	159,000
Of which private investments:	2,111,036	2,287,098
Large portfolio companies	1,434,749	1,436,231
Retail (Pharmacy)	716,130	714,001
P&C insurance	313,140	285,566
Medical insurance	114,805	92,308
Hospitals	290,674	344,356
Investment stage portfolio companies	557,392	566,614
Renewable energy	252,606	266,627
Education	181,584	189,226
Clinics and diagnostics	123,202	110,761
Other portfolio companies	118,895	284,253
Loans issued	-	9,212
Other assets	5,017	5,060
Total assets	3,999,602	3,778,304
Liabilities
Debt securities issued	432,460	413,930
Other liabilities	2,161	963
Total liabilities	434,621	414,893
Net Asset Value	3,564,981	3,363,411

 

In measuring fair values of JSC Georgia Capital's investments, following valuation methodology is applied:

Equity Investments in Listed and Observable Portfolio Companies

Equity instruments listed on an active market are valued at the price within the bid/ask spread, that is most representative of fair value at the reporting date, which usually represents the closing bid price. The instruments are included within Level 1 of the hierarchy in JSC GCAP financial statements. Listed and observable portfolio also includes instruments for which there is a clear exit path from the business, e.g. through a put and/or call options at pre-agreed multiples. In such cases, pre-agreed terms are used for valuing the company.

Equity Investments in Private Portfolio Companies

Large portfolio companies - An independent third-party valuation firm is engaged to assess fair value ranges of large private portfolio companies at the reporting date starting from 31 December 2020. The independent valuation company has extensive relevant industry and emerging markets experience. Valuation is performed by applying several valuation methods including an income approach based mainly on discounted cash flow and a market approach based mainly on listed peer multiples (the DCF and listed peer multiples approaches applied are described below for the other portfolio companies). The different valuation approaches are weighted to derive a fair value range, with the income approach being more heavily weighted than the market approach. Management selects what is considered to be the most appropriate point in the provided fair value range at the reporting date.       

Investment stage portfolio companies - An independent third-party valuation firm is engaged to assess fair value ranges of investment stage private portfolio companies at the reporting date starting from 30 June 2022. The independent valuation company has extensive relevant industry and emerging markets experience. Valuation is performed by applying several valuation methods including an income approach based mainly on discounted cash flow and a market approach based mainly on listed peer multiples (the DCF and listed peer multiples approaches applied are substantially identical to those described below for the other portfolio companies). The different valuation approaches are weighted to derive a fair value range, with the income approach being more heavily weighted than the market approach. Management selects what is considered to be the most appropriate point in the provided fair value range at the reporting date.

Other portfolio companies - fair value assessment is performed internally as described below.

Equity investments in private portfolio companies are valued by applying an appropriate valuation method, which makes maximum use of market-based public information, is consistent with valuation methods generally used by market participants and is applied consistently from period to period, unless a change in valuation technique would result in a more reliable estimation of fair value.

The value of an unquoted equity investment is generally crystallised through the sale or flotation of the entire business. Therefore, the estimation of fair value is based on the assumed realisation of the entire enterprise at the reporting date. Recognition is given to the uncertainties inherent in estimating the fair value of unquoted companies and appropriate caution is applied in exercising judgments and in making the necessary estimates.

The fair value of equity investments is determined using one of the valuation methods described below:

Listed Peer Group Multiples

This methodology involves the application of a listed peer group earnings multiple to the earnings of the business and is appropriate for investments in established businesses and for which the Company can determine a group of listed companies with similar characteristics.

The earnings multiple used in valuation is determined by reference to listed peer group multiples appropriate for the period of earnings calculation for the investment being valued.

The Company identifies a peer group for each equity investment taking into consideration points of similarity with the investment such as industry, business model, size of the company, economic and regulatory factors, growth prospects (higher growth rate) and risk profiles. Some peer-group companies' multiples may be more heavily weighted during valuation if their characteristics are closer to those of the company being valued than others.

As a rule of thumb, last 12-month earnings will be used for the purposes of valuation as a generally accepted method. Earnings are adjusted where appropriate for exceptional, one-off or non-recurring items.

a.     Valuation based on enterprise value

Fair value of equity investments in private companies can be determined as their enterprise value less net financial debt (gross face value of debt less cash) appearing in the most recent Financial Statements.

Enterprise value is obtained by multiplying measures of a company's earnings by listed peer group multiple (EV/EBITDA) for the appropriate period. The measures of earnings generally used in the calculation is recurring EBITDA for the last 12 months (LTM EBITDA). In exceptional cases, where EBITDA is negative, peer EV/Sales (enterprise value to sales) multiple can be applied to last 12-month recurring/adjusted sales revenue of the business (LTM sales) to estimate enterprise value.

Once the enterprise value is estimated, the following steps are taken:

﷐      Net financial debt appearing in the most recent financial statements is subtracted from the enterprise value. If net debt exceeds enterprise value, the value of shareholders' equity remains at zero (assuming the debt is without recourse to Georgia Capital).

﷐      The resulting fair value of equity is apportioned between Georgia Capital and other shareholders of the company being valued, if applicable.            

﷐      Valuation based on enterprise value using peer multiples is used for businesses within non-financial industries.

b.     Equity fair value valuation

Fair value of equity investment in companies can also be determined as using price to earnings (P/E) multiple of similar listed companies.

The measure of earnings used in the calculation is recurring adjusted net income (net income adjusted for non-recurring items and forex gains/ losses) for the last 12 months (LTM net income). The resulting fair value of equity is allocated between Georgia Capital and other shareholders of the portfolio company, if any. Fair valuation of equity using peer multiples can be used for businesses within financial sector (e.g. insurance companies).

Discounted cash flow

Under the discounted cash flow (DCF) valuation method, fair value is estimated by deriving the present value of the business using reasonable assumptions of expected future cash flows and the terminal value, and the appropriate risk-adjusted discount rate that quantifies the risk inherent to the business. The discount rate is estimated with reference to the market risk-free rate, a risk adjusted premium and information specific to the business or market sector. Under the discounted cash flow analysis unobservable inputs are used, such as estimates of probable future cash flows and an internally-developed discounting rate of return.

Net Asset Value

The net assets methodology involves estimating fair value of an equity investment in a private portfolio company based on its book value at reporting date. This method is appropriate for businesses (such as real estate) whose value derives mainly from the underlying value of its assets and where such assets are already carried at their fair values (fair values determined by professional third-party valuation companies) on the balance sheet.

Price of recent investment

The price of a recent investment resulting from an orderly transaction, generally represents fair value as of the transaction date. At subsequent measurement dates, the price of a recent investment may be an appropriate starting point for estimating fair value. However, adequate consideration is given to the current facts and circumstances to assess at each measurement date whether changes or events subsequent to the relevant transaction imply a change in the investment's fair value.

Exit price

Fair value of a private portfolio company in a sales process, where the price has been agreed but the transaction has not yet settled, is measured at the best estimate of expected proceeds from the transaction, adjusted pro-rata to the proportion of shareholding sold.

Validation

Fair value of investments estimated using one of the valuation methods described above is cross-checked using several other valuation methods as follows:

﷐      Listed peer group multiples - peer multiples such as P/E, P/B (price to book) and dividend yield are applied to the respective metrics of the investment being valued depending on the industry of the company. The Company develops fair value range based on these techniques and analyses whether fair value estimated above falls within this range.

﷐      Discounted cash flow (DCF) - The discounted cash flow valuation method is used to determine fair value of equity investment. Based on DCF, the Company might make upward or downward adjustment to the value of valuation target as derived from primary valuation method. If fair value estimated using discounted cash flow analysis significantly differs from the fair value estimate derived using primary valuation method, the difference is examined thoroughly, and judgement is applied in estimating fair value at the measurement date.

﷐      In line with our strategy, from time to time, we may receive offers from interested buyers for our private portfolio companies, which would be considered in the overall valuation assessment, where appropriate.

 

Valuation process for Level 3 valuations

Georgia Capital hired third-party valuation professionals to assess fair value of the large private portfolio companies as at 31 December 2021. Starting from 2022 third-party valuation professionals are hired to assess fair value of the investment stage private portfolio companies as well. As of 31 December 2024, such businesses include Hospitals (Large and Specialty & Regional and Community Hospitals), Insurance (consisting of a. P&C insurance and b. Medical insurance), Retail (Pharmacy), Clinics & Diagnostics, Renewable energy and Education. The valuation is performed by applying several valuation methods that are weighted to derive fair value range, with the income approach being more heavily weighted than market approach. Management selects most appropriate point in the provided fair value range at the reporting date. Fair values of investments in other private portfolio companies are assessed internally in accordance with Georgia Capital's valuation methodology by the Valuation Workgroup.

 

Georgia Capital's Management Board proposes fair value to be placed at each reporting date to the Audit and Valuation Committee. The Audit and Valuation Committee is responsible for the review and approval of fair values of investments at the end of each reporting period.

Description of significant unobservable inputs to level 3 valuations

The approach to valuations as of 31 December 2024 was consistent with the Company's valuation process and policy.

Management analyses the impact of climate change on the valuations, such as by incorporation of known effects of climate risks to the future cash flow forecasts or through adjusting peer multiples the known differences in the climate risk exposure as compared to the investment being fair valued. As at 31 December 2024, the management concluded that the effects of the climate risks are reflected in the peer multiples and discount rates used in the valuations and that no specific adjustments are required in relation of the Group's investment portfolio measurement and respective fair value sensitivity disclosures.

 

The following table show descriptions of significant unobservable inputs to level 3 valuations of equity investments:

31 December 2024
Description	Valuation technique	Unobservable input	Range*[implied multiple**]	Fair value
Loans Issued	DCF	Discount rate	-	-
Equity investments at fair value
Large portfolio				1,434,749
Retail (Pharmacy)	DCF, EV/EBITDA	EV/EBITDA multiple	5.4x-15.6x	716,130
			[8.4x]
P&C insurance	DCF, P/E	P/E multiple	5.6x-12.0x	313,140
			[10.7x]
Medical insurance	DCF, P/E	P/E multiple	9.4x-14.1x	114,805
			[12.3x]
Hospitals	DCF, EV/EBITDA	EV/EBITDA multiple	6.4x-12.9x	290,674
			[10.5x]
Investment stage				557,392
Renewable energy	DCF, EV/EBITDA	EV/EBITDA multiple	4.3x-17.5x	252,606
			[11.3x]
Education	DCF, EV/EBITDA	EV/EBITDA multiple	4.9x-25.4x	181,584
			[12.8x]
Clinics and diagnostics	DCF, EV/EBITDA	EV/EBITDA multiple	4.8x-12.9x	123,202
			[10.6x]
Other	Sum of the parts	EV/EBITDA multiples	5.5x-24.9x	160,314
			[8.0x-12.2x]   [8.0x-12.2x]
		Cashflow probability	[90%-100%]
		NAV multiple	[0.85x]

 

*For equity investments at fair value the range refers to LTM multiples of listed peer group companies, prior to any adjustments.

**Implied multiples are derived by dividing selected value of the company by respective LTM earnings measure.

Georgia Capital hired third-party valuation professionals to assess fair value of the large and investment stage private portfolio companies as at 31 December 2024 and 31 December 2023 including Insurance (consisting of a. P&C insurance and b. Medical insurance), Hospitals (Large and Specialty & Regional and Community Hospitals), Retail (Pharmacy) and Clinics and Diagnostics. Starting from 30 June 2022, fair value assessment for Renewable Energy and Education businesses are performed by third-party valuation professionals as well. The valuation is performed by applying several valuation methods that are weighted to derive fair value range, with the income approach being more heavily weighted than market approach. Management selects most appropriate point in the provided fair value range at the reporting date.

 

On 31 December 2021, Georgia Capital signed SPA to dispose 80% interest in Water Utility business, which was previously included within the large private portfolio companies. As at 31 December 2023 the remaining 20% interest in Water Utility business was valued using the pre-agreed put option multiple in reference to the signed contract with the buyer as GCAP has a clear exit path from the business through a put and call structure at pre-agreed EBITDA multiples.

 

In April 2024, Georgia Capital signed an agreement to acquire a portfolio of insurance contracts and the brand name from "Ardi". The acquisition was fully financed by borrowings within the medical insurance business. As at 31 December 2024, in the valuations of the medical insurance business, Georgia Capital also included the recently acquired Ardi, which was previously valued at cost.

 

In October 2024, Georgia Capital entered into an agreement with a subsidiary of Royal Swinkels N.V. ("Royal Swinkels") for the disposal of the beer and distribution business. Following the disposal, the beer and distribution business is held through a new holding company domiciled in the Netherlands (the "Dutch Holdco"). GCAP obtained a 20% holding in the Dutch Holdco and Royal Swinkels 80%. The parties have put in place a put/call structure relating to the remaining GCAP 20% holding. The put option granted to GCAP can be exercised at a pre-agreed EV/EBITDA multiple, in each of the twelve-month periods following the approval of the audited consolidated financial statements of the Dutch Holdco by shareholders for each of the financial years ended 31 December in 2028, 2029 and 2030. The transaction has been completed and net proceeds of c.US$ 63.0 million has been received by 31 December 2024.

 

As at 31 December 2024, several portfolio companies (Hospitals, Clinics, P&C Insurance, together "Defendants") were engaged in litigation with the former shareholders of Insurance Company Imedi L who allege that the they sold their 66% shares in Imedi L to Defendants under duress at a price below market value in 2012. Since the outset, Defendants have vigorously defended their position that the claims are wholly without merit. The initial judgment of the First Instance Court  which was in favour of the Defendants was overruled and upon reconsideration the First Instance Court partially satisfied the claim and ruled that US$ 12.7 million principal amount plus an annual 5% interest charge as lost income (c. US$ 21 million in total) should be paid by the Defendants. The Defendants appealed the decision of the First Instance Court. Several hearings have taken place at the Appellate Court and as of 31 December 2024 the case is still at the stage of consideration at the Appellate Court. No date for the next hearing date has been set.

 

Defendants are confident that they will prevail and there have not been made a provision for a potential liability in their financial statements. Management shares Defendants' assessment of the merits of the case and considers that the probability of incurring losses on this claim is low, accordingly, fair values of portfolio companies do not take into account a potential liability in relation to this litigation.

 

In December 2023, the Georgian National Competition Agency (the "Agency") imposed fines on four companies in the Georgian pharmaceutical retailers' sector, including GCAP's retail (pharmacy) business, for alleged anti-competitive actions related to price quotations on certain prescription medicines funded under the state programme. The penalty amount assessed by the Agency on our retail (pharmacy) business is GEL 20.0 million derived by utilising the single rate across all the alleged participants. The company has appealed the Agency's decision in court and plans to vigorously defend its position. No date of hearing has been set yet.

 

As at 31 December 2024, Georgia Education Group, LLC ("GEG") was involved in litigation with the minority partner of the British Georgian Academy, LLC ("BGA"). The minority partner initially was claiming the annulment of the memorandum of understanding ("MoU") under which Georgia Capital acquired a 70% shareholding in BGA in 2019, alleging GEG's failure to invest in the development of BGA. However, the minority partner later withdrew the lawsuit and submitted a new claim to the court, seeking GEL 300,000 in damages, once again alleging that GEG failed to invest in BGA's development.

 

On 6 February 2025, the minority partner filed an amended claim with the court, seeking damages in the amount of US$ 15.5 million, termination of the MoU and the SPA, and the consequent return of 70% of BGA's stake in the minority partner's ownership.

GEG's assessment of the claim is that the claimant's allegations are based on false factual grounds and are without any legal merit. Management shares GEG's assessment of the merits of the case and considers that the probability of incurring losses on this claim is low.

 

The case is currently pending before the court of first instance, and the date of the preliminary hearing has not been set yet.

 

 

 

ADDITIONAL FINANCIAL INFORMATION

The FY24 NAV Statement shows the development of NAV since 31-Dec-23:

GEL '000, unless otherwise noted	Dec-23	1. Value creation[49]	2a. Investment and Divestments	2b. Buyback	2c. Dividend	3.Operating expenses	4. Liquidity/ FX/Other	Dec-24	Change %
Listed and Observable Portfolio Companies
Lion Finance Group	1,225,847	339,985	-	-	(144,797)	-	-	1,421,035	15.9%
Water Utility	159,000	29,000	-	-	-	-	-	188,000	18.2%
Total Listed and Observable Portfolio Value	1,384,847	368,985	-	-	(144,797)	-	-	1,609,035	16.2%
Listed and Observable Portfolio value change %		26.6%	0.0%	0.0%	-10.5%	0.0%	0.0%	16.2%
Private Portfolio Companies
Large Companies	1,436,231	30,237	-	-	(35,408)	-	3,689	1,434,749	-0.1%
Retail (Pharmacy)	714,001	10,739	-	-	(10,048)	-	1,438	716,130	0.3%
Insurance (P&C and Medical)	377,874	74,617	-	-	(25,360)	-	814	427,945	13.3%
Of which, P&C Insurance	285,566	44,746	-	-	(17,986)	-	814	313,140	9.7%
Of which, Medical Insurance	92,308	29,871	-	-	(7,374)	-	-	114,805	24.4%
Hospitals	344,356	(55,119)	-	-	-	-	1,437	290,674	-15.6%
Investment Stage Companies	566,614	(10,501)	11,933	-	(12,258)	-	1,604	557,392	-1.6%
Renewable Energy	266,627	(13,770)	11,333	-	(12,258)	-	674	252,606	-5.3%
Education	189,226	(8,853)	600	-	-	-	611	181,584	-4.0%
Clinics and Diagnostics	110,761	12,122	-	-	-	-	319	123,202	11.2%
Other Companies	284,253	46,601	(163,037)	-	(9,289)	-	1,786	160,314	-43.6%
Total Private Portfolio Value	2,287,098	66,337	(151,104)	-	(56,955)	-	7,079	2,152,455	-5.9%
Private Portfolio value change %		2.9%	-6.6%	0.0%	-2.5%	0.0%	0.3%	-5.9%
Total Portfolio Value (1)	3,671,945	435,322	(151,104)	-	(201,752)	-	7,079	3,761,490	2.4%
Total Portfolio value change %		11.9%	-4.1%	0.0%	-5.5%	0.0%	0.2%	2.4%
Net Debt (2)	(296,808)	-	148,504	(135,718)	201,752	(21,379)	(50,776)	(154,425)	-48.0%
of which, Cash and liquid funds	107,910	-	157,371	(135,718)	201,752	(21,379)	(31,699)	278,237	NMF
of which, Loans issued	9,212	-	(8,867)	-	-	-	(345)	-	NMF
of which, Accrued dividend income	-	-	-	-	-	-	-	-	NMF
of which, Gross Debt	(413,930)	-	-	-	-	-	(18,732)	(432,662)	4.5%
Net other assets/ (liabilities) (3)	3,375	-	2,600	(805)	-	(13,900)	10,678	1,948	-42.3%
of which, share-based comp.	-	-	-	-	-	(13,900)	13,900	-	NMF
Net Asset Value (1)+(2)+(3)	3,378,512	435,322	-	(136,523)	-	(35,279)	(33,019)	3,609,013	6.8%
NAV change %		12.9%	0.0%	-4.0%	0.0%	-1.0%	-1.0%	6.8%
Shares outstanding49	40,736,528	-	-	(3,790,417)	-	-	666,377	37,612,488	-7.7%
Net Asset Value per share, GEL	82.94	10.68	(0.00)	4.81	(0.00)	(0.87)	(1.60)	95.95	15.7%
NAV per share, GEL change %		12.9%	0.0%	5.8%	0.0%	-1.0%	-1.9%	15.7%

 

Basis of presentation

This announcement contains unaudited financial results presented in accordance UK-adopted international accounting standards ("IFRS"). The financial results are unaudited and derived from management accounts.

The information in this Announcement in respect of full year 2024 preliminary results, which was approved by the Board of Directors on 23 February 2025, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. The Group's financial statements for the year ended 31 December 2023 were filed with the Registrar of Companies, and the audit reports were unqualified and contained no statements in respect of Sections 498 (2) or (3) of the UK Companies Act 2006. The financial statements for the year ended 31 December 2024 will be included in the Annual Report and Accounts to be published in March 2025 and filed with the Registrar of Companies in due course. Under IFRS 10, Georgia Capital PLC meets the "investment entity" definition and does not consolidate its portfolio companies, instead the investments are measured at fair value. Our Group level discussion is therefore based on the IFRS 10 investment entity accounts.

Net Asset Value statement, as included in notes to IFRS financial statements, summarises the Group's equity value and drivers of related changes between the reporting periods. Georgia Capital PLC holds an investment in JSC Georgia Capital (an investment entity on its own), which holds a portfolio of investments, each measured at fair value. Georgia Capital PLC measures its investment in JSC Georgia Capital at fair value through profit and loss under IFRS, estimated with reference to JSC Georgia Capital's own investment portfolio value as offset against its net debt. NAV is calculated at stand-alone GCAP level, which represents the aggregation of the stand-alone assets and liabilities of Georgia Capital PLC and JSC Georgia Capital.

The income statement presents the Group's results of operations for the reporting period. As we conduct most of our operations through JSC Georgia Capital, through which we hold our portfolio companies, the IFRS results provide little transparency on the underlying trends. To enable a comprehensive view of the combined operations of Georgia Capital PLC and JSC Georgia Capital (together referred to herein as "GCAP") as if it were one holding company, we adjust the accounts ("adjusted IFRS 10 Income Statement"). For details on the methodology underlying the preparation of the adjusted income statement, please refer to page 94 in Georgia Capital PLC 2023 Annual report. A full reconciliation of the adjusted income statement, to the IFRS income statement is provided on page 22. Our adjusted IFRS 10 income statement may be viewed as alternative performance measure (APM).

Additionally, for the majority of our portfolio companies the fair value of our equity investment is determined by the application of a market approach (listed peer multiples and precedent transactions) and an income approach (DCF). Under the market approach, listed peer group earnings multiples are applied to the trailing twelve month (LTM) stand-alone IFRS earnings of the relevant business. Under the discounted cash flow (DCF) valuation method, fair value is estimated by deriving the present value of the business using reasonable assumptions of expected future cash flows and the terminal value, and the appropriate risk-adjusted discount rate that quantifies the risk inherent to the business. As such, the stand-alone IFRS results and developments behind IFRS earnings of our portfolio companies are key drivers in their valuations. Following the Group discussion, we therefore also present IFRS financial statements for material companies and a related brief results discussion.

Summary of valuation methodology for our investment portfolio

The fair values of the large private portfolio and investment stage companies at year-end 2024 were assessed by an independent valuation company. Combination of income approach (DCF) and market approach (listed peer multiples and in some cases precedent transactions) was applied consistently under both, internal and external valuation approaches. However, the independent valuation company's approach is more highly weighted towards DCF.

  

GLOSSARY

1.     APM - Alternative Performance Measure.

2.     GCAP refers to the aggregation of stand-alone Georgia Capital PLC and stand-alone JSC Georgia Capital accounts.

3.     Georgia Capital and "the Group" refer to Georgia Capital PLC and its portfolio companies as a whole.

4.     NMF - Not meaningful.

5.     NAV - Net Asset Value, represents the net value of an entity and is calculated as the total value of the entity's assets minus the total value of its liabilities.

6.     LTM - last twelve months.

7.     EBITDA - Earnings before interest, taxes, non-recurring items, FX gain/losses and depreciation and amortisation; The Group has presented these figures in this document because management uses EBITDA as a tool to measure the Group's operational performance and the profitability of its operations. The Group considers EBITDA to be an important indicator of its representative recurring operations.

8.     ROIC - return on invested capital is calculated as EBITDA less depreciation, divided by the aggregate amount of total equity and borrowed funds.

9.     Loss ratio equals net insurance claims expense divided by net earned premiums.

10.  Expense ratio in P&C Insurance equals sum of acquisition costs and operating expenses divided by net earned premiums.

11.  Combined ratio equals sum of the loss ratio and the expense ratio in the insurance business.

12.  ROAE - Return on average total equity (ROAE) equals profit for the period attributable to shareholders divided by monthly average equity attributable to shareholders of the business for the same period.

13.  Net investment - gross investments less capital returns (dividends and sell-downs).

14.  EV - enterprise value.

15.  Liquid assets & loans issued include cash, marketable debt securities and issued short-term loans at GCAP level.

16.  Total return/value creation - total return/value creation of each portfolio investment is calculated as follows: we aggregate a) change in beginning and ending fair values, b) gains from realised sales (if any) and c) dividend income during period. We then adjust the net result to remove capital injections (if any) to arrive at the total value creation/investment return.

17.  WPP - Wind power plant.

18.  HPP - Hydro power plant.

19.  PPA - Power purchase agreement.

20.  Number of shares outstanding - Number of shares in issue less total unawarded shares in JSC GCAP's management trust.

21.  Market Value Leverage ("MVL"), also Loan to Value ("LTV") - Interchangeably used across the document and is calculated by dividing net debt to the total portfolio value.

22.  NCC - Net Capital Commitment, represents an aggregated view of all confirmed, agreed and expected capital outflows at both Georgia Capital PLC and JSC Georgia Capital levels.

23.  NCC Ratio - Equals Net Capital Commitment divided by portfolio value.

 

 

 

 

ABOUT GEORGIA CAPITAL PLC

Georgia Capital PLC (LSE: CGEO LN) is a platform for buying, building and developing businesses in Georgia (together with its subsidiaries, "Georgia Capital" or "the Group"). The Group's primary business is to develop or buy businesses, help them institutionalise their management and grow them into mature businesses that can further develop largely on their own, either with continued oversight or independently. Once Georgia Capital has successfully developed a business, the Group actively manages its portfolio to determine each company's optimal owner. Georgia Capital will normally seek to monetise its investment over a 5-10 year period from initial investment.

Georgia Capital currently has the following portfolio businesses: (1) a retail (pharmacy) business, (2) an insurance business (P&C and medical insurance), (3) a hospitals business, (4) a renewable energy business (hydro and wind assets), (5) an education business; and (6) a clinics and diagnostics business. Georgia Capital also holds other small private businesses across different industries in Georgia; a 20.0% equity stake in the water utility business and a 19.2% equity stake in LSE listed Lion Finance Group PLC ("Lion Finance Group" or the "Bank"), formerly known as "Bank of Georgia Group PLC", the holding company of leading universal banks in Georgia and Armenia.

 

 

Forward looking statements

This announcement contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position and future operations and development. Although Georgia Capital PLC believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. By their nature, these forward-looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements. Important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, certain of which are beyond our control, include, among other things: regional instability; currency fluctuations and risk, including depreciation of the Georgian Lari, and macroeconomic risk, regulatory risk across a wide range of industries; investment risk; liquidity risk; portfolio company strategic and execution risks and other key factors that could adversely affect our business and financial performance, which are contained elsewhere in this document and in our past and future filings and reports and also the 'Principal Risks and Uncertainties' included in 1H24 Results Announcement and in Georgia Capital PLC's Annual Report and Accounts 2023. No part of this document constitutes, or shall be taken to constitute, an invitation or inducement to invest in Georgia Capital PLC or any other entity and must not be relied upon in any way in connection with any investment decision. Georgia Capital PLC and other entities undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Nothing in this document should be construed as a profit forecast.

 

Disclaimer

Georgia Capital engaged Kroll, a third-party independent valuation firm to provide a range of fair values of certain subject investments. For the period ended 31 December 2024, Georgia Capital asked the independent valuation firm to independently estimate a range of fair value for 100 percent of Georgia Healthcare Group ("GHG"), A Group ("Insurance"), Georgia Pharmacy Group ("Pharmacy"), Georgian Renewable Power Holding ("GRPH") and Georgia Education Group ("GEG"). Kroll performed limited procedures and applied their judgement to estimate fair value range based on the facts and circumstances known to them as at the valuation date, 31 December 2024. The analysis performed by Kroll was based upon data and assumptions provided by Georgia Capital and received from third party sources, which the independent valuation firm relied upon as being accurate without independent verification. The advice of the third-party independent valuation firm is one input that the Georgia Capital considered for determining the fair value of GHG, Insurance, Pharmacy, GRPH and GEG for which the Company is ultimately and solely responsible. In this context, Kroll's role as independent valuation service provider did not constitute an endorsement of Georgia Capital either from a financial or operational point of view, nor did they provide a transaction, fairness or solvency opinion. The results of the independent valuation report should not be relied upon by anyone for any investment or transaction purpose related to the Company or any underlying investments.

 

 

 

 

COMPANY INFORMATION

 

Georgia Capital PLC

Registered Address

Central Square

29 Wellington Street

Leeds, LS1 4DL

United Kingdom

www.georgiacapital.ge

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

 

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.

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