‘Remarkable year’ for Sigma Capital Group plc as REIT launch enhances growth prospects

Private rented sector (PRS) and urban regeneration developer Sigma Capital Group plc has recorded an uptick in pre-tax profits during what bosses are calling “a remarkable year”.

The company’s profit before tax rose to £4.06m in the 12 months to December 31 2017, a year-on-year increase of 10.6%.

Profit from operations was down slightly, falling from £3.37m in 2016 to £3.12m in Sigma’s latest earnings report.

The firm partly attributed the dip to a loss of £300k made by its managed PRS activities; a nil contribution from regeneration activities, compared to £1.5m the year previous; and a £900k increase in administrative expenses, which came in at £4.3m, resulting from a larger workforce.

Revenues for the period were likewise down, from £5.38m in 2016 to £4.4m last year.

But Sigma Capital Group is nevertheless celebrating a pivotal year.

The company, which has offices in Manchester, London and Edinburgh, launched The PRS REIT plc in May 2017 – the first UK-quoted real estate investment trust (REIT) to focus on PRS investment.

The Manchester-based company is now Sigma’s main focus, as the group is responsible for delivering the PRS REIT’s initial goal of creating a £1bn-plus portfolio of over 10,000+ new-build rental homes.

Sigma said The PRS REIT has been the main driver of its growth and earnings profile, with around 1,383 homes now under construction for the REIT and sites of thousands more homes (around 4,000) identified.

Sigma CEO Graham Barnet said: “It has been a remarkable year for Sigma.

“The successful launch of the PRS REIT, which is the UK’s first REIT dedicated entirely to investment in new rental homes, has created a huge opportunity for the group to capture, and cements our position as a leader in the Private Rented Sector.”

“2017’s results do not reflect the profound change to Sigma’s growth prospects and earnings profile. However our financial performance from the new financial year onwards will reflect the new model.

He continued: “We are wholly focused on delivering the PRS REIT’s initial goal of creating an initial 10,000 high-quality new rental homes for middle-income families, and are confident that, with our unrivalled PRS Platform, supported by our house building partners as well as by central and local government, Sigma is well-placed to achieve its objectives.”

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