Georgia Capital PLC Edison issues update on Georgia Capital (GCAP)
May 26 2023 - 2:15AM
RNS Non-Regulatory
TIDMCGEO
Georgia Capital PLC
26 May 2023
London, UK, 26 May 2023
Edison issues update on Georgia Capital (GCAP)
Georgia Capital (GCAP) continued to make progress on its
strategic priorities in Q123: reduction in the net capital
commitment (NCC) ratio, deleveraging its portfolio companies,
selling subscale businesses, executing tactical buybacks (a US$10m
programme was announced in April 2023), further investments in the
renewable energy and education businesses and moving to the LSE
standard listing. GCAP operates against the backdrop of strong GDP
growth in Georgia at 7.2% y-o-y in Q123 (after 10.1% in 2022),
where inflation seems largely contained, with headline and core
inflation rates of 2.7% and 4.7% in April 2023, respectively.
GCAP's share price has been rising but is yet to catch up with the
growing NAV and implies a 64% discount to the 'live' NAV
estimate.
GCAP's Q123 NCC ratio was down by 1.4pp to 19.7% at end-March
2023 (vs an over-the-cycle target of c 15%) on the back of a 7.8%
increase in portfolio value and broadly stable NCC. After
accounting for post-period end developments to 5 May (BoG dividend
and share price increase, further GCAP buybacks and FX), the NCC
ratio stood at 19.1%. We note that GCAP currently holds US$79m of
its US$300m Eurobonds (maturing in Q124) after buying US$28m ytd.
In Q123, it sold two operational hotels and a vacant land plot in
Tbilisi (in line with its strategy of selling down subscale
businesses) for US$28m, which was used in full to deleverage the
hospitality business. This helped reduce net debt to EBITDA across
its private businesses to 3.0x at end-March 2023 from 3.3x at
end-2022. GCAP also agreed to sell a hotel under construction in
April 2023 for US$8.4m.
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