Georgia Capital LON: CGEO reported strong first-half 2026 operating momentum across its private portfolio, with net asset value per share rising 13% in the first quarter and aggregate portfolio-company revenue growth accelerating to 19.1% in the second quarter.
The company said its NAV gain was driven primarily by an increase in Lion Finance Group’s share price, which contributed about 9.5 percentage points to NAV growth, alongside a roughly 4.5 percentage-point contribution from private portfolio operating performance. Liquidity management and foreign exchange had a negative 0.9 percentage-point effect.
Georgia Capital also completed its GEL 700 million capital-return program and said it expects to have no holding-company debt after repaying its remaining $50 million bond on Aug. 19. The company plans to launch a new $50 million share buyback and cancellation program after completing the current repurchase program, which it expects in the fourth quarter.
GEL 1 Billion Capital Allocation Plan
Management announced a GEL 1 billion capital allocation program to be deployed by the end of 2029. At least GEL 500 million is earmarked for shareholder distributions through buybacks or dividends, while the remainder may be used for investments in Georgia and Armenia. If investment opportunities do not materialize, Georgia Capital said that portion could also be directed to buybacks or dividends.
The company said its investment focus in Armenia would principally be bolt-on acquisitions in industries where it already operates, including pharmacy, healthcare and potentially insurance. During the question-and-answer session, management said a potential acquisition would likely be below $50 million and would not exceed $100 million.
Georgia Capital said it would generally favor buybacks over dividends while its shares trade below NAV, with a NAV premium potentially serving as a trigger for a dividend program.
The company’s net capital commitment ratio moved into negative territory at nearly negative 3%, supported by higher cash balances after trimming its Lion Finance Group stake for PFIC management. Georgia Capital said it had about GEL 500 million in cash following the sale, and estimated pro forma cash of about GEL 310 million after retiring debt.
Portfolio-company leverage has also declined substantially, with aggregate private-business net debt falling to 2.1 times EBITDA from five times at the end of 2019. Retail pharmacy leverage stood at 0.8 times EBITDA, healthcare services at 3.5 times, and insurance at a lower level, according to the company.
Pharmacy Posts Record EBITDA
Tornike Nikolaishvili, CEO of Retail Pharmacy, said the pharmacy business delivered another quarter of growth, supported by same-store sales, new stores and wholesale performance. The business operates the GPC and Pharmadepot brands and held approximately 34% of Georgia’s organized retail pharmacy market as of June.
The network expanded by six pharmacies during the quarter, including one in Armenia, bringing its footprint to 464 pharmacies, 14 Body Shop stores and five optical stores. The company opened 34 pharmacies over the prior 12 months.
- Retail revenue rose 13.7% year over year in the second quarter and 11.1% in the first half.
- Same-store retail revenue increased 8.5% in the quarter.
- Wholesale revenue increased 16.5% in the quarter.
- EBITDA rose 22.3% to a record GEL 29.8 million in the second quarter.
- First-half EBITDA increased 21.4% to GEL 58.9 million.
Gross profit margin reached 34.1% in the quarter, up 1.4 percentage points from a year earlier, as the business shifted sales toward higher-margin products and secured improved supplier terms. Nikolaishvili said wholesale margin expansion was driven by product mix, including non-medical products and the company’s strategic portfolio, and indicated wholesale gross margins could reach as much as 30%.
Healthcare Expands Higher-Acuity Services
Irakli Gogia, CEO of Healthcare, said healthcare-services revenue increased 18% year over year in the second quarter, while EBITDA rose 25% to GEL 30 million. EBITDA margin expanded 1.3 percentage points to 21%, and last-12-month EBITDA exceeded GEL 100 million for the first time.
The business reduced net debt to EBITDA to 3.5 times in June from 3.7 times in March. It introduced robotics-assisted surgery, expanded transcatheter aortic valve implantation services to a second hospital, and opened a renovated and enlarged outpatient department at its largest hospital.
Within the hospitals segment, revenue grew 18% and EBITDA increased 24%, while admissions rose 26%. Occupancy increased two percentage points to 71%, and average patient stays declined to four days from 4.5 days. The polyclinics and diagnostics segment reported combined revenue growth of 17% and EBITDA growth of 27%, with retail diagnostics revenue nearly doubling from the comparable 2025 quarter.
Insurance Growth Offsets Hailstorm Impact
Giorgi Alpaidze, Deputy CEO and CFO, said insurance revenue rose 32% in the second quarter and 30% in the first half. Pre-tax profit increased 13% in the quarter and 36% in the first half, despite a severe hailstorm in Tbilisi that generated motor-fleet claims.
Excluding the hailstorm claim, adjusted pre-tax profit would have increased 34% in the quarter and 50% in the first half, Alpaidze said. Property and casualty revenue rose 11% in the quarter, while health-insurance revenue increased 50%, aided by medical tenders, corporate growth, rate increases and product diversification.
The insurer paid more than GEL 6 million in dividends to Georgia Capital during the second quarter, bringing first-half dividends to nearly GEL 12 million.
Separately, Head of Internal Audit Giorgi Berishvili said Georgia Capital’s portfolio value reached GEL 5.4 billion. Retail pharmacy was valued above GEL 1 billion for the first time. The company’s Lion Finance Group stake was reduced to 14.9%, but its value still increased by GEL 154 million during the quarter as the bank’s share price rose about 22%.
Georgia Capital said it expects around GEL 200 million of dividend inflows in 2026 and expects NAV per share to continue growing, supported by portfolio EBITDA generation and continued economic growth in Georgia.
About Georgia Capital (LON:CGEO)
Georgia Capital PLC (“Georgia Capital” or “the Group” or “GCAP”– LSE: CGEO LN) is a platform for buying, building and developing businesses in Georgia with holdings in sectors that are expected to benefit from the continued growth and further diversification of the Georgian economy. The Group's focus is typically on larger-scale investment opportunities in Georgia, which have the potential to reach at least GEL 300 million equity value over 3-5 years from the initial investment and to monetise them through exits, as investments mature.
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