Georgia Capital Delivers Stellar Q1: NAV Growth, Buybacks, and Strategic Clarity
A Standout Quarter for NAV Growth
Georgia Capital (GCAP) has kicked off 2025 with a bang, reporting an 11.2% surge in NAV per share (GEL) to GEL 106.73. In sterling terms, NAV per share rose 9.8% to £29.80. This marks the company’s strongest Q1 performance in recent years, driven by two powerhouse factors:
- Lion Finance Group’s rally: The listed banking giant (formerly Bank of Georgia) saw its share price leap 15.9%, contributing GEL 247.9 million to NAV.
- Private portfolio momentum: Core businesses in pharmacy, insurance, and healthcare delivered aggregated revenue growth of 21.2% and EBITDA up 45.8% YoY.
Strategic Portfolio Tweaks: Sharpening the Focus
GCAP isn’t just growing – it’s getting smarter about how it communicates value. Starting this quarter, the private portfolio is split into:
- Large Portfolio Companies (41.1% of NAV): Pharmacy, insurance, and healthcare services – the “heavy lifters” with scale and predictable cash flows.
- Emerging & Other (13.8% of NAV): Education, renewables, and niche plays with high growth potential but needing time to mature.
This reclassification isn’t just window dressing. It signals where management expects 80% of the portfolio’s value to come from – a nod to investors craving clarity in complex holding structures.
Buybacks: Returning Cash with Conviction
GCAP’s share repurchase programme is hitting its stride:
- US$50 million programme now active: Expanded from US$25 million in March, reflecting strong liquidity.
- 2.1 million shares bought in Q1: Totalling GEL 87.9 million, contributing 2.7 percentage points to NAV per share growth.
- 27.6% of peak shares cancelled since demerger: A clear statement that management sees value in the current valuation.
While the NCC ratio ticked up to 13.5%, this reflects deployment of capital, not distress – a nuance worth highlighting.
Private Portfolio Deep Dive: Where the Magic Happens
Pharmacy Chain: Prescription for Success
- 55.6% EBITDA surge: Driven by same-store sales growth (2.8%) and margin expansion from supplier renegotiations.
- Wholesale segment up 40.6%: State healthcare tenders and timing effects played their part.
Insurance: Acquisition Power
- Medical insurance revenue doubled: Thanks to April 2024’s Ardi portfolio purchase.
- 13.6% pre-tax profit growth: Despite slight combined ratio deterioration in P&C.
Healthcare Services: Outpatient Boom
- 46.8% EBITDA jump: Outpatient services now make up 35.7% of hospital revenue.
- Diagnostics business flying: Patient numbers up 4% with higher-margin tests per visit.
Macro Backdrop: Georgia’s Growth Engine
While geopolitical risks linger, Georgia’s economy remains robust:
- 9.3% Q1 GDP growth: Supported by domestic consumption and foreign inflows.
- Inflation at 3.5%: Slightly above target but manageable.
- GEL stability: Appreciated 2.3% against USD, though down 6.2% vs EUR.
Looking Ahead: Gilauri’s Growth Playbook
CEO Irakli Gilauri strikes an optimistic tone, emphasising:
- Portfolio optimisation: Continued focus on institutionalising management teams in core businesses.
- Capital discipline: Balancing buybacks with selective investments in renewables and education.
- Economic tailwinds: Leveraging Georgia’s position as regional growth hub despite geopolitical noise.
Final Thoughts: A Compounding Machine?
With a 15.1% NAV CAGR since 2018, GCAP is no flash in the pan. The Q1 numbers reinforce three key themes:
- Execution: Private portfolio companies are delivering operationally, not just riding macro trends.
- Alignment: Aggressive buybacks show skin in the game.
- Clarity: Simplified reporting helps investors “see through” the holding structure.
For those comfortable with frontier market exposure, GCAP offers something rare – a London-listed vehicle with concentrated exposure to Georgia’s growth story, managed by a team with proven capital allocation chops. The 11.2% NAV jump is impressive, but the real story is in the compounding potential of that 15%+ long-term CAGR.
