Strong first half for housing group as takeover moves proceed

Graham Barnet

Sigma Capital, the housing developer which works in tandem with Manchester housing group PRS REIT, reported strong first half results today.

Revenues for the six months to March 31, rose from £5m to £6.6m, while pre-tax profits soared from £1m to £4.1m.

Cash balances at the period end stood at £25.4m, up slightly from £23.4m the previous year.

Its work with PRS REIT saw 956 new homes delivered in the six month period, taking the total portfolio to 3,590 at March 31, 2021, with an estimated rental value (ERV) of £33.3m per annum.

Rental demand and collection remained strong, and there are, currently 1,008 homes under way with an ERV of approximately £9.4m pa.

The 4,000th new rental home is due imminently, just four years after the REIT’s launch.

Sigma also works with the EQT Real Estate joint venture, and Gatehouse Bank and UK PRS Properties partnerships.

Earlier this month, Sigma announced that an agreement had been reached on the terms for a recommended cash offer for by PineBridge Benson Elliot, part of PineBridge Investments, a private global asset manager with $133bn in assets under management at March 31, 2021.

Sigma’s independent directors have unanimously recommended the offer, and at the time of announcement, shareholders accounting for approximately 61% of Sigma’s issued equity indicated their support.

Sigma Capital Group chief executive, Graham Barnet, said: “These results reflect Sigma’s continuing good progress.

“The recent offer for Sigma by PineBridge Benson Elliot LLP was unanimously recommended by Sigma’s independent directors as in the best interests of staff, partners and shareholders as a whole, and is now following due process.”

Chairman, Ian Sutcliffe, said: “PineBridge’s offer to Sigma shareholders, the independent Sigma directors, have given due consideration to PineBridge’s intentions for the business and the impact of the acquisition on all of Sigma’s stakeholders, including its customers, house building partners, joint venture partners, business locations and management and employees given their importance to Sigma’s future strategy.

“Following the completion of the acquisition, it is envisaged that Sigma would continue to operate materially in the same way without significant disruption.

“In particular, PineBridge wishes to maintain and strengthen Sigma’s key and successful existing relationships with the PRS REIT and EQT Real Estate. PineBridge intends to support the existing management of Sigma in delivering their current strategy.”

He added: “Should all necessary approvals for the offer pass, including shareholder assent, it is intended that following the anticipated completion of the transaction, which is likely to be towards the end of July, a request will be made to the London Stock Exchange to cancel trading in Sigma shares and to de-list Sigma from AIM, following which Sigma would be re-registered as a private limited company.”

The board does not intend to propose an interim dividend, in line with prior years.