Georgia Capital LON: CGEO said its net asset value (NAV) per share was flat in the first quarter, while emphasizing strong operating momentum across its major private holdings and continued progress on share buybacks and deleveraging.
Q1 NAV and portfolio drivers
Management said NAV per share was unchanged in Q1, though it increased 2.1% in pound sterling terms. The company attributed the flat quarter primarily to a decline in the share price of Lion Finance Group (LFG) during the period. Management said LFG’s share price has since recovered, helping drive “more than 9%” NAV per share growth year-to-date, including 9.2% year-to-date growth in Georgian lari (GEL) terms.
In discussing the quarter’s NAV bridge, management said LFG contributed a negative 0.6% to NAV per share, while private large portfolio companies contributed nearly 3% positively. A change in valuation multiples was a nearly 1% negative, emerging and other portfolio companies declined by 0.5%, buybacks added 0.3%, operating expenses were a 0.3% drag, and “other” contributed 0.9%.
Management also pointed to an “exceptional” quarter for large portfolio companies, citing 13.7% top-line growth and 27% year-over-year EBITDA growth. The CEO said the company applies “pretty conservative” valuation multiples to private holdings and expects operating performance to support NAV growth over time.
Macro backdrop and market positioning
The CEO described Georgia’s macro environment as “firing on all cylinders,” citing 7.5% real GDP growth in 2025 and monthly readings of 7.9% in January and 8.8% in February. He attributed some of the momentum to stronger trade and logistics activity and inward investment, including flows tied to regional geopolitical developments.
He highlighted record foreign exchange reserves of $6.3 billion and said the current account deficit reached what he described as Georgia’s lowest level in 35 years at -2.6%. Inflation was described as “manageable” at 4.3%, while the policy rate was said to be 8%.
Capital returns, discount, and balance sheet
Georgia Capital continued buying back shares in the quarter, repurchasing 475,000 shares. Management said buybacks totaled $22 million in value during Q1 and that, cumulatively, the company has bought back “more than one-third” of its issued share capital. The CEO said the company would continue buybacks and noted the NAV discount had narrowed to 16%, which he called a historically low level.
The company also updated investors on leverage and liquidity. Management said net capital commitments (NCC) were around the mid-single digits as a percentage of NAV, and reiterated its goal to eliminate holding company leverage. The CEO said gross holdco debt is $50 million and “we may delever it in this year.”
CFO Giorgi Baratashvili said that despite spending roughly $22 million on buybacks and paying a half-year bond coupon, Georgia Capital ended March with about $85 million of liquidity and $50 million of gross debt, implying net cash of around $35 million.
Portfolio company performance: pharmacy, healthcare, and insurance
Retail pharmacy. Retail pharmacy CEO Tornike (and Nikoloz Shurgaia, as introduced) said the business remained the largest player in Georgia’s organized retail pharmacy market with around 34% market share based on 2024 figures. He said retail accounts for around 85% of revenue, with two core brands (GPC and Pharmadepot) plus franchise brands The Body Shop and Alain Afflelou Optics, and operations in Armenia and Azerbaijan.
He said the group added five pharmacies in Q1 (including one in Armenia) and ended March 2026 with 458 pharmacies, 14 Body Shop stores, and five optics stores. Retail revenue rose 8.6% year-over-year, supported by 4.5% same-store revenue growth and an 11% increase in average bill size. Wholesale revenue grew 6.7%. Gross margin reached a record 34% in Q1 2026, up 1.7 percentage points year-over-year.
Pharmacy EBITDA rose 20.5% year-over-year to a record GEL 29 million. Tornike said EBITDA-to-cash conversion was 114%, above a 90% target, and leverage was “1 time” adjusted net debt to last-twelve-month EBITDA, below a 1.5x target.
Healthcare services. Management said outpatient revenue grew 17% in Q1 2026, lifting outpatient share of total revenue by 1.4 percentage points to 46.2%. The business cited several clinical capability additions, including neuronavigation in two large hospitals and catheterization labs in two regional hospitals, as well as opening what it said is Georgia’s first human milk bank in Batumi. The company also said it recruited more than 60 physicians in Q1 and expanded its lab retail network to 12 branches.
Healthcare EBITDA grew 16% year-over-year to GEL 27 million, with EBITDA margin rising to 20.4%. Hospital occupancy declined from 75% to 71%, which management attributed to a lighter flu season; it noted flu-related admissions typically carry above-average margins. On cash conversion, management said Q1 reflects seasonality in state collections and expects improvement in the second half of the year.
Insurance. The insurance CEO (also named Giorgi in the transcript) said insurance revenues increased 27% in Q1, while profits grew 70%, with record-high revenues “on the base of last year’s high results.” He said property and casualty (P&C) and medical insurance each had 34% market share. He reported P&C revenues up 13%, profits up 27%, and ROE at 32%. In medical insurance, he said revenues grew 37% and profits rose 200%, with ROE “almost 50%.”
He also pointed to a new requirement that foreigners entering Georgia must buy travel insurance, which he said added GEL 1.5 million of revenue. He said the insurance business paid GEL 5.5 million in dividends to Georgia Capital in Q1.
Valuation updates, dividends outlook, and strategic priorities
Baratashvili said Q1 and Q3 are in-house valuation quarters and that the portfolio value was around GEL 5 billion, split roughly evenly between LFG shares and private portfolio companies. He said valuation multiples were flat in healthcare services, while multiples in retail pharmacy and insurance decreased slightly despite strong performance; he said the declines were partly due to results running ahead of prior discounted cash flow assumptions and that multiples could recover if performance continues.
He said LFG value declined by about GEL 100 million during the quarter, with roughly half due to dividends and buyback dividends received and half due to share price and exchange-rate effects, along with a small reduction in stake from 16.9% to 16.6%. Large portfolio companies saw valuation gains in excess of GEL 150 million, which were partly offset by multiple changes. He added that “other portfolio companies” decreased by GEL 24 million, including an impact from discontinuing two renewable energy pipeline projects.
On income, Baratashvili said Georgia Capital still expects dividend inflows in excess of GEL 200 million in 2026 across public and private holdings. He said GEL 40 million had been received so far, from LFG and the insurance business, and that the pharmacy business would begin paying 2026 dividends in Q2.
During Q&A, management said it remains active on M&A in Georgia and is increasingly focused on Armenia, primarily through bolt-on acquisitions via existing portfolio companies. The CEO said the company does not view any holdings as “strategic assets,” adding, “if we can sell expensively, we sell it,” and stated a preference for divestments to strategic buyers when pricing is attractive. On buybacks, management argued the current discount remains accretive and said it plans to continue repurchases.
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.
Recommended Stories
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Georgia Capital, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Georgia Capital wasn't on the list.
While Georgia Capital currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Wondering what the next stocks will be that hit it big, with solid fundamentals? Click the link to see which stocks MarketBeat analysts could become the next blockbuster growth stocks.
Get This Free Report
