(Alliance News) - Georgia Healthcare Group PLC on Wednesday announced plans to cut its capital expense, maintain its dividend policy, and invest in new opportunities over the next five years.
The healthcare provider is hosting an investor day in Tbilisi to update investors on its five-year goals, which includes the maintenance of its dividend policy to pay between 20% and 30% of annual profit as a dividend.
Strategically, the company plans to develop "a pipeline of new market growth portfolios" to create incremental earnings before interest, depreciation, taxation, and amortisation of GEL50 million or around GBP14 million. It hopes to achieve this from a GEL40 million to GEL50 million initial investment.
Georgia Healthcare is looking to improve free cash flow through increased earnings and reduced capital requirements, as well as a reduction in interest expense.
The firm will invest in new opportunities in assets which already generate revenue and have a more than 20% marginal return on invested capital.
Further, Georgia Healthcare will cut expected capital expenditure to around GEL35 million per year in the next few years and will allow its existing minority interests to be bought out.
Georgia Healthcare intends to keep its ongoing balance sheet at less than 2.0 times debt to Ebitda on average "from the end of 2020" and will target an Ebitda to cash conversion ratio of more than 80%.
"Over the next 5 years, [Georgia Healthcare] will seek to achieve double-digit compound annual revenue growth; and mid-teens compound annual Ebitda growth. In doing so, this is expected to support the delivery of [around 15% to 17% return on invested capital]," the company said.
Shares in Georgia Healthcare were down 0.2% at 240.00 pence on Wednesday morning.