Sigma Capital Group PLC – SGM – Interim Results

Sigma Capital Group PLC – SGM – Interim Results

Financial

Six months to 31 March 2021

Six months to 30 June

2020

Nine months to 30 Sept 2020

Revenue

£6.6m

£5.0m

£8.0m

Profit from operations

£4.1m

£0.9m

£3.2m

Profit before tax

£4.1m

£1.0m

£3.2m

Earnings per share

3.82p

0.85p

2.84p

Cash flow from operating activities

£4.3m

(£1.6m)

(£1.3m)

Cash balances at period end

£25.4m

£23.4m

£25.8m

Net assets per share

70.4p

65.9p

68.3p

 

Following the change in Sigma's accounting reference date, the financial period under review comprises the six months ended 31 March 2021 while the comparative period comprises the six months ended 30 June 2020.

Operational

 

Managed PRS activities

 

The PRS REIT plc ("the PRS REIT")

·    956 new homes delivered in H1, taking total portfolio to 3,590 at 31 March 2021, with an estimated rental value ("ERV") of £33.3m p.a.

·     Rental demand and collection remained strong.

·     Currently 1,008 homes under way (excl. Sigma-funded sites), with ERV of c. £9.4m p.a.

·     4,000th new rental home due imminently - just four years after REIT's launch.

·     PRS REIT shares admitted to trading on the Premium Segment of the Main Market of the London Stock Exchange in March 2021

EQT Real Estate joint venture

·    Launched in September 2020, targeting an initial portfolio of c.3,000 build to rent homes with a value in excess of £1bn.

·     Two sites developed by Sigma, are expected to be acquired by the joint venture at completion, due before the financial year end. They will deliver 157 homes with an ERV of c.£2.5m

·     A further two development sites have been acquired and are under way, together comprising 142 rental homes with an ERV of c.£2.6m p.a. and  gross development cost ("GDC") of c.£48.6m

·     Additional pipeline sites are progressing well

Gatehouse Bank and UK PRS Properties partnerships 

·    Sale of initial PRS portfolio with Gatehouse Bank (c.918 homes) for c.£150m triggered realisation of carried interest, amounting to £2.7m - 43% above book value, reflecting the strength of the valuation on disposal

·     A 66-unit site for UK PRS Properties is on track for delivery in the spring of 2022

 

Self-funded PRS activities

·    Five developments providing 321 homes are currently under way, with a GDC of c. £72.3m and ERV of c.£4.2m. The two London sites will seed the EQT Real Estate joint venture (as mentioned above).

·     Post period, in May 2021 a 28-unit development site with ERV of £0.6m, completed and fully let in H1, was sold to the PRS REIT for c.£10.5m, following an independent valuation by Savills.

·    First development in Scotland has been agreed with Springfield Properties plc - a 75-unit site within Springfield's Bertha Park Village project near Perth.

 

Recommended acquisition

 

·    As reported on 11 June 2021, an agreement was reached on the terms for a recommended cash offer for Sigma by PineBridge Benson Elliot LLP ("PineBridge"), part of PineBridge Investments, a private global asset manager with $133.0 billion in assets under management at 31 March 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.

 

Graham Barnet, CEO of Sigma Capital Group plc, commented:

 

"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."

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