Fire & Security Systems (2024)

The economics, however, are the same: the equipment is imported and sits in the warehouse for 5–10 months on average before it is sold, so the cash put into the business comes back in 140–278 days. El Plus and Veziri cover that working-capital need with customer advances (₾21.3 million combined at end-2024), Neotech and GSC with equity and accumulated cash. Bank debt plays a minor role: the combined debt of four companies fell from ₾4.9 million in 2019 to ₾2.4 million in 2024.

In 2024 the combined revenue of the five companies rose 6.9% to ₾105.1 million, while adjusted EBITDA grew just 1.8% to ₾14.1 million. Over five years, the combined revenue of the four companies with data back to 2019 grew 49%, from ₾67 million to ₾100 million, with most of the growth coming after 2022, while the EBITDA margin stayed within 9–14% in all six years.

Most of the profit stays in the companies. Over 2019–2024 four companies paid ₾18.9 million in dividends (2024: ₾3.6 million), 31% of their combined net profit. Payout policy, however, differs sharply from one company to the next (see the Dividends section).

Four of the five companies grew revenue and three improved their EBITDA margin. A lower margin at Neotech, the largest by revenue, pulled the weighted EBITDA margin of the five down from 14.1% to 13.4%.

Neotech's revenue rose 11% to ₾35.0 million, while EBITDA fell from ₾5.0 million to ₾3.8 million. Cost of goods sold grew faster than sales, and gross margin dropped from 27.5% to 21.7%. As a result, EBITDA margin fell from 16.0% to 10.7%, the lowest level since 2020. The management report links the slower growth to market saturation; the same report puts the company's share of video camera and recorder imports at 56%.

El Plus grew revenue 7.2% to ₾30.1 million, while cost of goods sold fell 7.6%. Gross margin improved from 57.6% to 63.5%, EBITDA from ₾4.2 million to ₾5.1 million, and EBITDA margin from 15.1% to 16.9%. At ₾5.1 million, El Plus has the highest absolute EBITDA of the five. The filing does not break out the share of own manufacturing, so the statements cannot confirm that production explains the margin gain.

GSC's revenue fell 11.4% to ₾16.7 million, yet net profit rose 53% to ₾6.3 million. Goods sales fell 6.6% and installation services 45% (from ₾2.3 million to ₾1.3 million). Gross margin improved from 35.1% to 42.1%, but adjusted EBITDA slipped 8% to ₾3.4 million. Two items explain the increase in net profit: "other operating income", which rose from ₾0.9 million to ₾3.5 million and is not broken down in the filing, and interest earned on deposits (₾0.8 million). Together these two items (₾4.2 million) exceed the company's EBITDA and make up 57% of pre-tax profit.

Veziri's net profit fell, but its core business improved. EBITDA rose from ₾0.1 million to ₾0.8 million and the margin from 0.9% to 4.6%, still the lowest of the five. The fall in net profit from ₾1.5 million to ₾1.0 million reflects a one-off in 2023, when the sale of a land plot produced a ₾1.8 million gain. The revenue mix changed sharply within a single year: systems supply and installation grew from ₾4.8 million to ₾11.5 million (+142%), telecom and engineering services fell from ₾4.8 million to ₾0.6 million (−88%), and guarding services declined 9% to ₾6.2 million. Headcount fell from 353 to 279 (−21%), while salary expense rose 2% to ₾9.2 million. Salaries are 50% of revenue, the highest share of the five.

The salary share follows the business model. It is lowest at the goods traders, GSC (12%) and Intelectro (7%), higher at Neotech (22%) and El Plus (32%), which run installation crews, and highest at 279-employee Veziri (50%).

Intelectro grew fastest, up 46% to ₾5.0 million. Here too, growth came with a lower margin: gross margin fell from 33.9% to 30.5% and EBITDA margin from 21.9% to 20.5%. Even so, Intelectro's EBITDA margin (20.5%) edges out GSC's (20.2%), on absolute EBITDA of ₾1.0 million, a fifth of El Plus's. The reason is a lean cost structure: operating expenses are only 10% of revenue, which gives a 46% return on invested capital (ROIC).

The cash cycle runs from 140 to 278 days, but that measure ignores customer advances. Net of advances, it becomes clear who actually funds the inventory: customers at Veziri and El Plus, equity at Neotech and GSC.

El Plus's advances grew from ₾3.0 million to ₾10.8 million, and that is what funded the ₾8.2 million increase in inventory and receivables. Inventory rose from ₾6.4 million to ₾10.2 million (275 days) and trade receivables from ₾1.8 million to ₾6.2 million. The company grew without bank debt, although ₾10.8 million of prepaid work has yet to be delivered.

Veziri holds ₾10.5 million of advances (75% of assets) against equity of ₾1.5 million. The main risk sits on the other side of the balance sheet: the company has ₾5.8 million tied to its associate, canned-food producer Geonaturals (33.3%): a ₾2.6 million loan, a ₾0.35 million investment and co-borrower status on ₾2.9 million of bank loans. That is four times Veziri's equity, while Geonaturals' own equity is negative (−₾3.0 million). ₾0.9 million of interest accrued on the loan has not been received, and the auditor was unable to obtain evidence on the impairment assessment. In 2025 the company lent Geonaturals a further ₾1.7 million.

Neotech funded its growth from accumulated cash. Inventory rose by ₾4.5 million (a one-off bulk purchase, according to the management report), operating cash flow was −₾1.9 million, and capital expenditure took another ₾2.9 million, mostly land and the construction of a new central warehouse. As a result, cash fell from ₾4.4 million to ₾0.6 million and the company took on bank debt for the first time in five years (₾1.2 million, Debt/EBITDA of 0.3x).

With ₾13.3 million of cash and no debt, GSC has the strongest financial position of the five. In 2024 trade receivables rose from ₾0.4 million to ₾3.7 million, against falling sales and with no explanation in the filing. Real estate makes up 35% of assets (land, buildings and ₾3.2 million of construction in progress). Unlike the other four, GSC accrues profit tax every year at 15% of accounting profit and pays it when dividends are distributed. ₾4.9 million has built up in liabilities this way, and 2024 net profit is stated after a ₾1.1 million tax charge.

Dividends distributed over 2022–2024, in total and as a share of net profit for the same period:

1️⃣ GSC: ₾3.70 million² (2024: ₾1.55 million), 29% of net profit

2️⃣ Veziri: ₾3.31 million (2024: ₾1.13 million), 115%

3️⃣ El Plus: ₾1.68 million (2024: ₾604 thousand), 15%

4️⃣ Neotech: ₾1.51 million (2024: ₾314 thousand), 15%

5️⃣ Intelectro: ₾825 thousand³ (2024: ₾388 thousand), 36%

Owners as stated in the filings:

1️⃣ Neotech LLC (Neotech)
💼 Davit Archvadze — 60%; Ivane Gagua — 40%

2️⃣ El Plus LLC (El Plus)
💼 Paata Chumburidze — 100%

3️⃣ Veziri LLC (Veziri)
💼 Paata Aroshidze — 43%; Davit Gamtsemlidze — 42%; Grigol Tsaava — 15%

4️⃣ GSC LLC (GSC)
💼 Suliko Simaevi — 50%; Mamuka Simaevi — 50%

5️⃣ Intelectro LLC (Intelectro)
💼 Zurab Tabukashvili — 50%; Viktor Rtveladze — 50%

Methodology note. EBITDA and operating profit are adjusted under finSPOT's methodology. Gross margins are not directly comparable: Neotech books direct salaries (₾4.6 million) in cost of sales, while El Plus and Veziri book them in operating expenses. The salary share is only broadly comparable as well: for Neotech it includes the direct salaries booked in cost of sales, whereas GSC and Intelectro do not show salaries separately within cost of sales.