Review of LSE listed Georgia Capital Plc & Watches of Switzerland Group Plc

Review of LSE listed Georgia Capital Plc & Watches of Switzerland Group Plc
Georgia Capital Plc

Georgia Capital Plc, a Georgia (country) based holding company, it is in the business of acquiring, incorporating and developing business enterprises in that country. The company targets businesses in sectors with high growth potential and effects either direct investment into small but promising companies or effects merger and acquisition activities to create value.

The company presently has six private company holdings, a water utility business (GGU),a renewable energy business (GGU), a housing development business (m2), a hospitality and commercial real estate business (m2), a property and casualty insurance business (Aldagi) and, a beverages business (Georgia Beverages). Other than the above the company also has holdings in two public company (London Stock Exchange premium-listed Georgian companies), Georgia Healthcare Group PLC, (57 per cent equity stake) a United Kingdom incorporated holding company of the largest healthcare services provider in Georgia, which is also the largest pharmaceuticals retailer and wholesaler in the country and Bank of Georgia Group PLC (19.9 per cent equity stake), a leading universal banking company in the country of Georgia.

The company also has three new businesses in the pipeline, Auto Service, Education, and Digital Services.

The shares of the company have their listing on the London Stock Exchange on the Main Market Segment. The shares trade there under the ticker name CGEO.

Trading Update

The company on 29 October 2019 came out with a trading update regarding the 100 per cent acquisition of hydro electric company Hydrolea LTD.

  • The acquire company has three Hydro power plants under its fold having a total installed capacity of 21 Megawatts, other than that it has 19 megawatts worth of Hydro power projects in the pipeline.
  • The acquisition of Hydrolea LTD with raise Georgia Capital’s Renewable Energy portfolio to 71 megawatt installed capacity with a pipeline of 350 megawatts for the medium term.
  • All the three operational Hydro Power Plants shall be adding approximately between US$ 4.1 million to US$ 4.4 million to the EBITDA in aggregate to the company’s Renewable Energy vertical’s income during the financial 2020 on the back of 105 Giga Watt hour net annual power generation.
Performance at the London Stock Exchange
Daily Share Price performance as on 8 November 2019, before the market close (Source: Thomson Reuters)

On 8 November 2019, at the time of writing the report (before the market close, GMT 11.23 AM), CGEO shares were trading on the London Stock Exchange at GBX 1030.00.

The 52-week high stock price of the company was GBX 1251.00 and the 52-week low price of the company was GBX 927.00. The total market capitalization, at the time of writing of this report, of the company was £375.04 million.

Outlook

The businesses acquired by the company are high-quality power generating assets which are already having strong dollar-linked cash inflows and, along with the projects in the pipeline, have very robust prospects.

The company’s Renewable Energy Business is progressing well in achieving its medium-term objective of becoming a dominant company in Georgia’s the fast-growing electricity market, which incidentally has benefited immensely from the recent market deregulation.

Watches of Switzerland Group Plc

The Watches of Switzerland Group Plc is United Kingdom's largest retailer of luxury watches, having operations in both UK and the US. The company deals with four prestigious brands, , Watches of Switzerland (UK and US), Goldsmiths (UK), Mappin & Webb (UK) and Mayors (US) with jewelry as  complementary offering.

The company has 129 core showrooms spread across the United Kingdom and the United States (including 20 dedicated Rolex, TAG Heuer, Omega and Breitling mono-brand partnership stores).  The company also has its products in outlets at Heathrow Airport in Terminals 2, 3, 4 and 5 in addition to five online transactional websites.

The shares of the company have their listing on the London Stock Exchange in the main market segment. There they trade using the ticker name WOSG. The shares of the company also form part of the FTSE 250 Index.

Trading update

The company on 13 August 2019 came out with a trading statement for the First quarter of FY 2020 for three-month period ended on 28 July 2019.

  • The company for the quarter expects to report a total revenue of £209.4 million, which is a growth of 17.8 per cent over the corresponding period in previous year; this growth was driven by strong performances in UK and the USA.
  • The company also witnessed a strong Like for like growth of 10.8 per cent for the group as a whole (UK excluding Online witnessed growth of 11.5 per cent, the United States Like for Like sales growth was at 8.7 percent and Online-United Kingdom sales witnessed a like-for-like growth of 14.5 per cent.
Performance at the London Stock Exchange
Daily Share Price performance as on 8 November 2019, before the market close (Source: Thomson Reuters)

On 8 November 2019, at the time of writing the report (before the market close, GMT 11.33 AM), WOSG shares were trading on the London Stock Exchange at GBX 287.00.

The 52-week high stock price of the company was GBX 315.00 and the 52-week low price of the company was GBX 253.63. The total market capitalization, at the time of writing of this report, of the company was £718.37 million.

The stock’s volume (before the market close, at the time of writing) stood at 832. Stock's average daily traded volume for 5 days was 138,702.80; 30 days- 73,182.07 and 90 days – 126,048.84. The average daily traded volume for 5 days was up by 89.53 per cent as compared to the 30 days’ average daily traded volume. In last one month, the shares have generated a positive return of 9.6 per cent and 0.03 per cent return on year to date basis.

Outlook

The luxury watch markets of the United Kingdom and the United States remain very strong, despite the ongoing wider macro-economic weakness and political uncertainty in the United Kingdom and in the United States.

The management believes that the company is  well-positioned to deliver on its strategic objectives and would be able to meet the Board's expectations for FY20, as was envisaged during the release of FY19 results.

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