Georgia Capital ((GB:CGEO)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Georgia Capital reflected a predominantly positive sentiment, underscored by significant growth in NAV and EBITDA across various sectors. The company reported successful share buybacks and strategic acquisitions, although it faced some challenges with litigation affecting liquidity and a temporary dip in healthcare cash conversion.
NAV per Share Growth
The Net Asset Value (NAV) per share saw a healthy increase of 7.9%, primarily driven by the rising share price of the Bank of Georgia and the strong operating performance of large portfolio companies. This growth highlights the company’s effective management and strategic positioning in the market.
Strong EBITDA Growth
Georgia Capital’s private large portfolio companies demonstrated remarkable resilience, with nearly 30% EBITDA growth in Q3. This performance trend has been consistent over the past nine months, showcasing the company’s robust operational capabilities.
Successful Share Buybacks
In Q3, Georgia Capital successfully executed share buybacks of 1.4 million shares, bringing the total to 15.2 million shares valued at $221 million. This move has been instrumental in creating shareholder value and reflects the company’s confidence in its financial health.
Healthcare and Insurance Expansion
The healthcare group completed a strategic bolt-on acquisition at an attractive valuation of less than 4x forward-looking EBITDA. Meanwhile, the insurance business achieved a record-high Return on Equity (ROE) of over 40%, indicating strong performance and growth potential in these sectors.
Retail Pharmacy Growth
Retail pharmacy operations reported a 30.6% increase in EBITDA over nine months, with wholesale revenue surging by 33%. This growth underscores the company’s successful expansion and market penetration strategies.
Capital Return Program Progress
Georgia Capital is ahead of schedule in its GEL 700 million capital return program, with nearly half completed. This progress includes $100 million in debt repayments and $26 million in share buybacks, demonstrating the company’s commitment to returning value to shareholders.
Litigation Impact
A legacy litigation case has slightly impacted the company’s operating performance by 0.2%, necessitating a $50 million liquidity buffer. While this presents a challenge, the company remains focused on mitigating its effects.
Decrease in Healthcare Operating Cash Conversion
The healthcare segment experienced a temporary decrease in operating cash conversion during Q3. However, the company expects a recovery in Q4, indicating a short-term issue rather than a long-term concern.
Forward-Looking Guidance
Georgia Capital’s forward-looking guidance remains optimistic, with expectations for continued high growth and cash flow improvements in Q4. The company aims to become debt-free at the GCAP level, reduce its NCC ratio to 5.4%, and continue its strategic share buybacks and acquisitions. The outlook is supported by strong economic performance and strategic investments.
In summary, Georgia Capital’s earnings call conveyed a positive outlook, with significant growth in NAV and EBITDA, successful strategic initiatives, and a clear path forward. Despite some challenges, the company’s robust performance and strategic focus position it well for future success.