Last close As at 05/08/2026
GBP42.95
▲ −35.00 (−0.81%)
Market capitalisation
GBP1,466m
Research: Investment Companies
Georgia Capital (GCAP) reported a Q423 NAV total return (TR) of 7.7% in Georgian lari (GEL) terms (3.4% in sterling terms), bringing the FY23 NAV TR to a strong 26.5% (20.4% in sterling terms). The considerable increase in the sterling share price of Bank of Georgia (BoG) was the main contributor, adding c 5.1% and 19.5% to GCAP’s opening NAV in Q423 and FY23, respectively. This was further assisted by positive revaluation of all large and investment-stage private holdings, except for the hospital business. In aggregate, GCAP’s private holdings added 1.9pp to its Q423 NAV TR. NAV-accretive buybacks of US$8.3m added a further 0.9pp.
Georgia Capital |
FY23 NAV TR of 20% in sterling terms |
Investment companies |
23 February 2024 |
Analyst
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Georgia Capital (GCAP) reported a Q423 NAV total return (TR) of 7.7% in Georgian lari (GEL) terms (3.4% in sterling terms), bringing the FY 23 NAV TR to a strong 26.5% (20.4% in sterling terms). The considerable increase in the sterling share price of Bank of Georgia (BoG) was the main contributor, adding c 5.1% and 19.5% to GCAP’s opening NAV in Q423 and FY23, respectively. This was further assisted by positive revaluation of all large and investment-stage private holdings, except for the hospital business. In aggregate, GCAP’s private holdings added 1.9pp to its Q423 NAV TR. NAV-accretive buybacks of US$8.3m added a further 0.9pp.
Making good progress on its deleveraging agenda
GCAP’s net capital commitments ratio went down slightly during Q423 from 15.9% to 15.6% (now close to the 15% over-the-cycle target) and fell significantly versus the 21.1% ratio at end-2022. This was assisted by the increase in portfolio value, as well as the successful bond refinancing completed in August (see our previous update note). Further support came from GCAP’s solid US$31m free cash flow at holding level in FY23 (vs US$11m in FY22). This was driven by dividend income (recurring dividends were up 92% y-o-y to GEL180m in FY23, with management’s outlook for FY24 at GEL180–190m), prudent oversight of operating expenses, as well as lower interest expense following the bond refinancing. All of this bodes well for GCAP’s future buybacks.
Health insurance acquisition and hospital sale
In terms of recent portfolio highlights, BoG proposed the acquisition of Ameriabank, a leading universal bank in Armenia, at multiples of 0.65x its end-October 2023 NAV and 2.6x its 2023 EPS. The last 12-month revenue and EBITDA (and in turn net debt to EBITDA) of GCAP’s hospital business was affected by renovation projects in response to the new facility regulations in Georgia. In December 2023, the business signed an agreement to sell one of its low-ROIC regional and community hospitals for GEL34.6m (implying a 15.2x EV/EBITDA multiple and a 43% uplift to last pre-deal carrying value), with proceeds to be used for business deleveraging. GCAP’s retail (pharmacy) chain expanded by 40 pharmacies and 11 franchise stores over the last 12 months. Finally, in January 2024, GCAP’s medical insurance business signed a memorandum of understanding to acquire a competitor, which is the third-largest local player, to form the largest health insurer in Georgia with a c 35% share.
GCAP continues to trade at a wide discount to NAV
Despite the c 50% appreciation in GCAP’s share price over the last 12 months, its shares still trade at a c 52% discount to NAV (when adjusted for the post-balance sheet change in BoG’s share price). If GCAP’s stake in BoG (which at end-2023 made up 33% of total portfolio value) was valued in line with the last closing price, GCAP’s current market cap would imply a wide 71% discount to the end-2023 fair value of its private assets (with GCAP’s enterprise value excluding BoG roughly equal to the fair value of the retail (pharmacy) business alone).
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Research: Consumer
Galvanised by further strong investment-led sales in FY23 (up by 11% like-for-like), which more than absorbed a near-doubling of energy costs, Compagnie des Alpes (CDA) is awash with growth initiatives, backed by a targeted 15% rise in FY24 capex to €270m. The enhancement of a diverse and hugely popular estate, with over 23 million visitors pa across 22 key sites (12 of which are leisure parks and seven are outside France), provides scope for lucrative marginal revenue growth. Continued buoyancy in Q124, allowing for a change in timing of school vacations, complements the better-than-expected progress with environmental policy, which CDA sees as key to corporate wellbeing. On consensus FY24 EBITDA forecasts, double guidance of c 7% growth, CDA’s EV/EBITDA is 4.5x.