Sigma Capital Group PLC Trading Update (4328M)
08 January 2019 - 6:00PM
UK Regulatory
TIDMSGM
RNS Number : 4328M
Sigma Capital Group PLC
08 January 2019
8 January 2019
AIM: SGM
Sigma Capital Group plc
("Sigma" or "the Company" or "the Group")
The Private Rented Sector ("PRS") and urban regeneration
specialist
Trading Update
Sigma, the PRS, residential development and urban regeneration
specialist, is pleased to provide a trading update for the
financial year ended 31 December 2018.
Trading in the second half of the financial year, especially in
the last quarter, was very strong, and the Board expects the
Company's full year results to show a significant uplift in revenue
and profitability over the prior year, with pre-tax profit slightly
ahead of current market forecasts. Profit before tax is expected to
be approximately GBP12.4m (a year-on-year increase of 205%) on
revenue of approximately GBP12.5m.
These encouraging results partly reflect the strong
macro-economic drivers underpinning the continuing successful
growth of The PRS REIT plc ("PRS REIT"), the launch of which in May
2017 marked a significant milestone in the development of Sigma's
business model. Sigma's subsidiary, Sigma PRS Management Limited
("Sigma PRS"), is Investment Adviser to the PRS REIT and the PRS
REIT retains 'first access' rights to Sigma's PRS Platform.
Over the course of the second half, the Company made very good
progress in driving the PRS REIT's expansion, including into new
geographic regions. Together with its main PRS partner, Countryside
Properties, Sigma secured 20 additional development sites for the
PRS REIT in this period. Sigma also completed two self-financed PRS
sites in the second half that were subsequently purchased by the
PRS REIT for a total consideration of GBP22m. The Company has a
further five self-financed sites under construction that are under
contract to be purchased by the PRS REIT when completed and let.
The sites are expected to deliver c. 280 PRS units for a GDC of c.
GBP46.3m, and have estimated rental value ("ERV") of GBP2.85m p.a.
Completion is expected over the course of 2019 and first half of
2020.
As at 31 December 2018, the total number of sites that are
completed or Contracted* for the PRS REIT stood at 43 across six
regions. These sites have a gross development cost of GBP530m and
will deliver 3,575 new homes, with 798 homes completed at the year
end, including homes under direct development by Sigma. The ERV of
these homes is GBP33.2m.
By the year end, Sigma PRS had c. GBP900m of the PRS REIT's
funding either deployed or Committed to deployment, including the
GBP530m of completed or Contracted development referred to above.
The Pipeline of development opportunity continues to grow, and now
stands at around GBP1bn, all sourced through Sigma's PRS
Platform.
Rental demand for family homes remains strong, helping to
underpin yield targets, and management remains positive about
growth prospects in 2019 and beyond. It is also investing to
support the Company's ongoing growth over the coming year.
Results for the full year to 31 December 2018 are expected to be
announced towards the end of April. It is also the Company's
intention to propose a final dividend for the year, marking the
start of a progressive dividend policy.
*DEFINITIONS
Contracted refers to sites under construction (under a design
& build contract), which have been purchased by the
PRS REIT or the PRS REIT's Investment Adviser (forward
sold to the PRS REIT).
Committed refers to development sites that have been approved
or are under formal appraisal by the Investment Adviser,
and where planning consent is being sought, and/or
are in the process of being acquired.
Pipeline refers to sites that have been identified as being
suitable for appraisal. These sites are typically
sourced from Sigma's PRS Platform, and are typically
under a Framework Agreement or Collaboration Agreement
with a construction partner.
Enquiries:
Sigma Capital Group Graham Barnet, Chief Executive T: 020 3178 6378
plc (today)
Malcolm Briselden, Finance T: 0333 999 9926
Director
KTZ Communications Katie Tzouliadis, Dan Mahoney T: 020 3178 6378
N+1 Singer James Maxwell, James Moat, T: 020 7496 3000
(NOMAD and Broker) Ben Farrow
NOTES TO EDITORS
About Sigma Capital Group plc
(www.sigmacapital.co.uk)
Sigma Capital Group plc is a private rented sector, residential
development, and urban regeneration specialist, with offices in
Edinburgh, Manchester and London. Sigma's principal focus is on the
delivery of large scale housing schemes for the private rented
sector. It has a well-established track record in assisting with
property-related regeneration projects in the public sector, acting
as a bridge between the public and private sectors. Its subsidiary,
Sigma PRS Management Limited, is Investment Adviser to The PRS REIT
plc.
About Sigma PRS Management Limited
Sigma PRS Management Limited is a wholly owned subsidiary of
AIM-quoted Sigma Capital Group plc and is the Company's Investment
Adviser. It sources investments and manages the assets of The PRS
REIT plc and advises the Alternative Investment Fund Manager
("AIFM") and the PRS REIT on a day-to-day basis in accordance with
the PRS REIT's Investment Policy. The Investment Adviser is an
appointed representative (reference number: 776293) of the
AIFM.
About The PRS REIT plc
(www.theprsreit.com)
The PRS REIT is a closed-ended real estate investment trust
established to invest in the Private Rented Sector and to provide
shareholders with an attractive level of income together with the
potential for capital and income growth. In its Initial Public
Offering, on 31 May 2017, the Company raised GBP250m (gross) of
equity capital, and, on 20 February 2018, raised a further GBP250m
(gross) through an additional Placing. Both fundraisings were
supported by the UK Government's Homes England, with direct
investments totaling c. GBP30 million.
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END
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