Georgia Healthcare Group PLC (“GHG” or the “Group” – LSE: GHG LN), announces the Group’s fourth quarter 2015 and full year 2015 preliminary consolidated financial results. Unless otherwise mentioned, figures are for full year 2015 and comparatives are for the full year 2014. The results are based on International Financial Reporting Standards (“IFRS”) as adopted in the European Union (“EU”), are unaudited and extracted from management accounts.
The information in the preliminary results announcement for the year ended 31 December 2015, which was approved by the Board of Directors on 12 February 2016, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006.
Highlights
GHG announces today the Group’s full-year 2015 and 4Q 2015 consolidated results reporting a record full-year profit for 2015 of GEL 23.6 million (US$ 9.9 million/GBP 6.7 million) and earnings per share (“EPS”) of GEL 0.15 (US$ 0.06 per share/GBP 0.04 per share). The Group also reported 4Q 2015 profit of GEL 5.1 million (US$ 2.1 million/GBP 1.4 million), or GEL 0.03 per share (US$ 0.01 per share/GBP 0.01 per share). A glossary of terms is provided on page 24.
GHG Highlights
4Q15 performance
- Net profit was GEL 5.1 million (US$ 2.1 million / GBP 1.4 million), up 435.2% y-o-y and down 3.7% q-o-q
- Net-profit, adjusted1 was GEL 9.5 million
- EPS was GEL 0.03 (US$ 0.01 / GBP 0.01 per share)
- Revenue was GEL 68.7 million (up 26.6% y-o-y, up 8.5% q-o-q)
- EBITDA was GEL 16.5 million (up 131.6% y-o-y, up 3.1% q-o-q)
- Operating leverage was positive at 45.2 percentage points y-o-y and positive at 6.6 percentage points q-o-q
- Return on Average Equity (“ROAE”), adjusted2, was 7.8%
2015 performance
- Net profit was GEL 23.6 million (US$ 9.9 million/GBP 6.7 million), up 78.1% year-on-year (y-o-y)
- Net-profit, adjusted was GEL 28.0 million
- EPS was GEL 0.15 (US$ 0.06 / GBP 0.04 per share)
- Revenue was GEL 242.7 million (up 22.5% y-o-y)
- Gross profit was GEL 93.1 million (up 32.5% y-o-y)
- EBITDA was GEL 56.1 million (up 52.3% y-o-y)
- Operating leverage was positive at 14.8 percentage points y-o-y
- Net debt to EBITDA was zero, as cash and bank deposits exceeded borrowings
- ROAE, adjusted, was 11.4%
Healthcare services business highlights
4Q15 performance
- Revenue was GEL 55.5 million (up 25.7% y-o-y, up 8.5% q-o-q)
- Gross profit was GEL 24.4 million (up 24.1% y-o-y, up 12.7% q-o-q)
- EBITDA was GEL 16.5 million (up 77.9% y-o-y, up 13.0% q-o-q)
- EBITDA margin was 29.8% (up 870 basis points (bps) y-o-y, up 120 bps q-o-q)
- Operating leverage was positive at 35.3 percentage points y-o-y and positive at 13.9 percentage points q-o-q
- Net profit was GEL 5.7 million (up 117.0% y-o-y, up 51.6% q-o-q)
2015 performance
- Revenue was GEL 195.0 million (up 32.5% y-o-y)
- Organic revenue growth was 17.3% y-o-y
- Gross profit was GEL 84.1 million (up 35.6% y-o-y)
- EBITDA was GEL 53.5 million (up 49.6% y-o-y)
- EBITDA margin was 27.4% (up 310 basis points y-o-y)
- Operating leverage was positive at 10.3 percentage points y-o-y
- Net profit was GEL 21.9 million (up 78.2% y-o-y)
Medical insurance business highlights
4Q15 performance
- Net insurance premiums earned were GEL 14.5 million (up 37.3% y-o-y, up 1.2% q-o-q)
- Gross profit was GEL 1.6 million (down 47.5% q-o-q)
- Loss ratio was 88.9% (down 14.6 percentage points y-o-y, up 10.3 percentage points q-o-q)
- Expense ratio was 13.8% (down 0.9 percentage points y-o-y, up 1.0 percentage points q-o-q)
- Combined ratio was 102.7% (down 15.6 percentage points y-o-y, up 11.3 percentage points q-o-q)
- EBITDA was GEL (0.02) million (up 99.2% y-o-y)
- Net profit was GEL (0.6) million (up 64.0% y-o-y)
2015 performance
- Net insurance premiums earned were GEL 55.3 million (down 20.8% y-o-y)
- Gross profit was GEL 9.2 million (up 7.7% y-o-y)
- Loss ratio was 83.4% (down 4.3 percentage points y-o-y)
- Expense ratio was 13.4% (up 1.6 percentage points y-o-y)
- Combined ratio was 96.7% (down 2.8 percentage points y-o-y)
- EBITDA was GEL 2.6 million (up 144.0% y-o-y)
- Net profit was GEL 1.8 million (up 76.4% y-o-y)
Strong growth supported by all business lines and primarily driven organically
- Healthcare services operated 45 healthcare facilities, of which 16 referral hospitals, 19 community hospitals, and 10 ambulatory clinics, as of 31 December 2015
- Total beds operated were 2,670, of which 2,209 beds were at referral hospitals and 461 beds were at community hospitals, as of 31 December 2015
- Healthcare services market share by number of beds was 26.6% as of 31 December 2015
- Hospital bed occupancy rate was 51.9% in 4Q15 and 51.7% in 2015
- Referral hospital bed occupancy rate was 59.9% in 4Q15 and 59.3% in 2015
- Average length of stay was 4.7 days in 4Q15 and 4.6 days in 2015
- Number of insured clients was 234,000 as at 31 December 2015
- Medical insurance market share was 38.4% based on net insurance premium revenue, as at 30 September 2015
- Insurance renewal rate was 92% in 2015
- Total number of employees was 9,709, of which 9,295 were at the healthcare services business and 414 at the medical insurance business, as of 31 December 2015
- Number of physicians was 2,705 and number of nurses was 2,738, as of 31 December 2015
1 We show adjusted net profit, to exclude the effect of the IPO. The adjusted profit includes add back for a non-recurring one-off FX loss as well as an add back of one quarter interest expense released through prepayment of debt at the end of 2015 and in January 2016.
2 We show Adjusted Return on average total equity (“Adjusted ROAE”) to exclude the effect of the IPO, which was completed at year end 2015. Adjusted ROAE equals Profit for the period attributable to shareholders of the Group divided by average equity attributable to shareholders of the Group for the same period net of IPO proceeds.
