Changes to Georgia’s universal healthcare policy caused trouble for two of Georgia Healthcare Group’s (GHG) subsidiaries in the first half. The government has increased the proportion of hospital bills that middle-income citizens have to pay out of pocket, which sent community hospital revenue down by a tenth. Those changes to eligibility criteria caused disruption in the medical insurance business which, once again, reported a pre-tax loss. The upshot is a GEL5m-GEL6m (£1.6m-£1.9m) drag on revenue in the 2017 financial year, which has caused broker Numis to soften its guidance for the 2017 financial year. EPS is now expected at 35 tetri, from pre-tax profit of GEL60.1m, up from 24 tetri last year.
But operational expansion has been impressive in the last six months. The group has successfully rebranded its outpatient clinics as Polyclinics – which offer a range of medical help – and has seen patient growth accelerate by 39 per cent in the last two months. Meanwhile, two hospital modernisation programmes helped send healthcare services revenue up by 12 per cent to GEL133m.
Similar top-line growth is expected in the second half, now that GHG has finished transferring patient records from its two new pharma businesses. The acquisition of Pharmadepot and GPC pharmacy chains means GHG now has 247 pharmacies in Georgia which brought in revenue of GEL222m.
| GEORGIA HEALTHCARE (GHG) | ||||
| ORD PRICE: | 350p | MARKET VALUE: | £461m | |
| TOUCH: | 335-355p | 12-MONTH HIGH: | 404p | LOW: 255p |
| DIVIDEND YIELD: | nil | PE RATIO: | 50 | |
| NET ASSET VALUE: | 358 tetri | NET DEBT: | 52% | |
| Half-year to 30 Jun | Turnover (GLm) | Pre-tax profit (GLm) | Earnings per share (tetri) | Dividend per share (p) |
| 2016 | 173 | 16.8 | 0.29 | nil |
| 2017 | 370 | 24.3 | 0.12 | nil |
| % change | +114 | +45 | -59 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=3.11 Georgian Lari *100 tetri in 1 Georgia Lari | ||||
