Georgia Capital Reports 11.2% NAV Growth and Strong Q1 2025 Performance

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:

1. Execution: Private portfolio companies are delivering operationally, not just riding macro trends.
2. Alignment: Aggressive buybacks show skin in the game.
3. 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.