Announcements

Completion of capital framework review and announcement of the Group’s first dividend

Completion of Capital Framework Review

 

In November 2018, the Board of Georgia Healthcare Group PLC (the “Group”) announced a review of the company’s expected cash generation, considering the performance potential of its businesses, its growth opportunities and risks. The objective of the review was to ensure that the company maintains a capital structure and dividend policy that is consistent with sustainable value creation. This review has now been finalised.

 

In addition to providing greater access to affordable high-quality healthcare, the Group is pursuing attractive new growth opportunities. It is building markets in areas such as medical tourism, outpatient services, the provision of dental services, aesthetics, and laboratory diagnostics. When combined with the organic growth in our existing businesses, the higher utilisation of the recently-launched new hospitals and polyclinic network, and the expansion of our pharmacy and distribution business, we are targeting a double-digit compound annual growth rate in revenues over the next few years.

 

The Board and the management also expect the Group to deliver an improved return on invested capital in each business and to generate substantially increased free cash flow. This reflects both higher earnings and reduced investment requirements over the next few years, following the completion of our significant three-year investment programme. Our capital allocation framework considers the likely capital required over the next few years to finance our growth and maintain our assets.  Accordingly, management and the Board have decided the following:

 

  • To recommend to shareholders at the 2019 Annual General Meeting, a final dividend of GEL 0.053 per share, to be paid in respect of the 2018 financial year. This represents a payout of 20% of 2018 earnings.
  • To adopt a new dividend policy reflecting our intent that 20%-30% of annual profit attributable to shareholders will be distributed as dividends. For a detailed formal statement of the Group's new dividend policy, see below. 
  • To target managing the Group balance sheet, on an ongoing basis, at an average less than 2.0 times net debt to EBITDA from the end of 2020.

Group Dividend Policy

Beginning with 2019 earnings and until further notice, the Group intends to pay a dividend of 20%-30% of annual profit attributable to shareholders.

 

 

Nikoloz Gamkrelidze, the Group CEO commented:

“In addition to market growth, over the next few years we expect to benefit from recent investments and the increased utilisation of our new and existing hospitals as these translate into good growth and improved margins. The Group’s strong balance sheet and increasing operating cash flows, with improved earnings and lower investment capital expenditure requirements, will enable us to gradually reduce the business leverage and further improve our returns on invested capital. Against this backdrop, we are pleased to announce our new dividend policy and recommend to shareholders a final dividend of GEL 0.053 per share to be paid in 2019 in respect of our 2018 earnings.”

 

 

Dividend timetable:

If the final dividend amount of GEL 0.053 per share (payable in British Pounds Sterling at the prevailing rate), is approved by shareholders at the Annual General Meeting in May 2019, the following dividend timetable will apply:

 

Ex-Dividend Date: 27 June 2019

Record Date: 28 June 2019

Currency Conversion Date: 28 June 2019

Payment Date: 12 July 2019

 

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