Housing investment group begins new financial year with strong foundations
Sigma Capital Group said it is in a strong position financially and operationally, as it announced its annual figures today.
The Manchester-based group focuses on urban regeneration and the private rented sector (PRS).
It unveiled figures for the nine months to September 30, 2020, following a change in its accounting period.
They showed revenues of £8m, compared with £13.9m for the 12 months to December 31, 2019.
Profit before tax of £3.2m compared with £13m in 2019. The 2p shareholder dividend remains unchanged.
The group said its results were in line with market expectations and its business model showed considerable resilience in the face of the coronavirus pandemic.
There was a strong bounce back after the opening up of the construction and lettings industries in May 2020, and the group signed a major joint venture, potentially worth £45m in fee income alone in the first five years, with EQT Real Estate in September, targeting a £1bn build-to-rent portfolio in Greater London.
Sigma works with Manchester-based PRS REIT and said a total of 1,017 new rental homes were delivered to the REIT in the nine-month period, taking its portfolio to 2,634 homes at September 30, 2020, with an estimated rental value (ERV) of £24.3m per annum.
Delivery of the REIT’s 5,000th completed home is expected in late 2021/early 2022.
Two self-funded developments were completed and sold to the REIT for a total of £11.9m after independent valuation. Sigma’s realised profit was £1.1m.
Six developments of around 395 homes, are currently under way, with a gross development cost of approximately £90.8m and ERV of about £5.1m. The two London developments will seed the EQT Real Estate joint venture.
Sigma Capital Group chief executive, Graham Barnet, said: “Sigma’s final results reflect the impact of the coronavirus crisis and the shorter nine month reporting period, following the change of year end.
“Nonetheless, we delivered over 1,000 new rental homes for The PRS REIT plc in the period, and delivery momentum has bounced back to almost pre-coronavirus level.
“The launch of our £1bn joint venture with EQT Real Estate, which is targeting 3,000 new London rental homes over the next five years, was a landmark event in September 2020.
“It sees us advance into a new geography, and adds new long-term income streams. Like the recent high profile sale of the ‘Thistle’ portfolio of suburban rental homes, which we created for Gatehouse Bank, it is further recognition of the value our model creates both for partners and for Sigma.”
He said: “The business is in a very strong position, financially and operationally.
“Our new agreements with Countryside Properties, for housing delivery, and with The PRS REIT plc, extending our advisory agreement, create added visibility.
“Trading in the first quarter of the new financial year is in line with management expectations, and with demand for our rental homes remaining high, the group is in a strong position to achieve its targets for the financial year.”
