Georgia Healthcare’s (GHG) chief executive Nikoloz Gamkrelidze characterised 2017 as “a significant year of transition” as the group continued to roll out an expanding range of services. Two recent pharma acquisitions were highlighted, along with “key investment and growth priorities" in the Tbilisi Referral Hospital and Deka hospital redevelopment. However, investments linked to these projects constrained earnings, as did changes to Georgia's Universal Healthcare Programme. Nevertheless, the scope of activities keeps widening. At the beginning of 2018, the group’s medical insurance business won a "significant" new client in the Georgian Ministry of Internal Affairs.
A year ago, we noted that Georgia Healthcare is the only public company to hold the leading position in any global healthcare market. Even in a country of 3.7m inhabitants that represents a tremendous commercial opportunity. This is borne out by the growth rates of the group’s pharma business, which last year registered a 250 per cent increase in retail sales, coupled with a 430-basis point improvement in the cash profit margin. These are sure pointers to the benefits of scaling-up operations, but we also shouldn’t be surprised if an associated (and unavoidable) capital drain continues to weigh on reported earnings.
Numis gives pre-tax profits of GEL 76.8m for the December 2018 year-end, leading to EPS of GEL 0.46, against GEL 46.3m and GEL 0.26 in 2017.
GEORGIA HEALTHCARE (GHG) | ||||
ORD PRICE: | 328p | MARKET VALUE: | £ 431m | |
TOUCH: | 316-335p | 12-MONTH HIGH: | 404p | LOW: 290p |
DIVIDEND YIELD: | NIL | PE RATIO: | 49 | |
NET ASSET VALUE: | GEL3.67* | NET DEBT: | 54% |
Year to 31 Dec | Turnover (GELm) | Pre-tax profit (GELm) | Earnings per share (GEL) | Dividend per share (p) |
2014 | 196 | 14.5 | 40.0 | nil |
2015 | 246 | 23.6 | 20.0 | nil |
2016 | 426 | 40.2 | 24.0 | nil |
2017 | 748 | 46.3 | 23.0 | nil |
% change | +75 | +15 | -4 | - |
Ex-div: | - | |||
Payment: | - | |||
£1=GEL3.44 (Georgian Lari). *Includes intangible assets of GEL 143.7m, or GEL1.09 per share. |