Georgia Healthcare Group (LSE: GHG) was unmoved in Thursday trading despite the release of impressive trading details.
This is a repeat performance of when I last covered the share back in August.
Today Georgia Healthcare declared that gross revenues boomed 75.1% during 2017, to 747.8m Georgian Lari (or GEL), a result that powered pre-tax profit 15.3% higher to GEL46.3m.
While sales at its Healthcare business again impressed, rising 7.8% last year to GEL265.4m, it was once again the Pharmaceuticals unit that stole the show — turnover here jumped 238.6% to GEL450.3m. This outstanding result was down to the acquisition of its Pharmadepot and GPC pharmacy chains last year.
The integrated healthcare provider’s Medical Insurance business was the only fly in the ointment. Revenues here dropped 12.7% in the 12 months to December, to GEL53.7m.
Medical marvel
The emerging markets of Eastern Europe can be played in a variety of ways, and Georgia Healthcare is arguably one of the best as strong economic growth in the country boosts healthcare demand. And the company is riding this train by investing heavily across its operations.
At its Healthcare division, Georgia Healthcare has embarked on a number of hospital redevelopment and modernisation programmes, which included the completion of two hospitals in the last year in the capital, Tbilisi. It has been splashing the cash over at its Pharmaceuticals arm too, with plans to raise the number of pharmacies to 300 from 250 presently, while it also has a raft of other plans to expand its market share (which currently stands at around 30%).
Reflecting its favourable earnings picture, City analysts expect the bottom line to explode 169% in 2018, and by an additional 29% last year. Consequently the London-headquartered firm can be considered a bona-fide bargain (provided investors look past a forward P/E ratio of 20.5 times and instead consider its corresponding sub-1 PEG readout of 0.1).
But these great growth forecasts and low valuation are not Georgia Healthcare’s only good points. A maiden dividend of 0.5p per share is currently predicted for 2018, and this is expected to sprint to 1.8p next year. Subsequent yields of 0.2% and 0.5% may not be impressive, but those seeking hot growth dividend shares may still want to give the company serious consideration.
Major merger
Renewi (LSE: RWI) is another cut-price growth share that has been updating investors in recent days.
On Monday the FTSE 250 firm advised: “We have continued to make good operational progress and overall trading across the group during the seasonally quieter second half has been in line with our expectations.”
Renewi added that, following the merger with Dutch competitor Van Gansewinkel a year ago, that its synergy and integration plans “continue to progress well” and that it remains “on track with the target synergies and delivering significant value accretion from the merger.”
It isn’t difficult to see earnings growth impressing at Renewi as strong economic growth in Europe boosts business, and the benefits of the aforementioned merger come to fruition. And my optimistic take is shared by the Square Mile, which is predicting profits expansion of 28% and 41% in the years to March 2018 and 2019 respectively.
A forward P/E ratio 19.8 times may not inspire, although a corresponding PEG reading of 0.7 certainly should. I reckon the Milton Keynes firm is another brilliant growth bargain to check out today.
