8th Jan 2019 10:52
LONDON (Alliance News) - Sigma Capital Group PLC on Tuesday said it expects to report a significant uplift in revenue and profitability in 2018, benefiting from the launch of PRS REIT PLC the year before.
The stock was trading 4.2% higher on Tuesday at 138.00 pence a share. PRS REIT shares up 0.3% at 94.08p.
The residential development company said trading in the second half of 2018 was "very strong". As a result the company expects to report pretax profit for 2018 slightly ahead of current market forecasts.
Sigma said it anticipates to deliver pretax profit of GBP12.4 million for the year to December 31, more than tripled year-on-year, on revenue of GBP12.5 million. In 2017, Sigma's pretax profit was GBP4.1 on revenue of GBP4.4 million.
The results were boosted by continued growth of PRS REIT, which was launched in May 2017, Sigma said. Over the second half, the company said it made "very good" progress in driving the PRS REIT's expansion, including into new geographic regions, securing 20 additional development sites.
Sigma's subsidiary, Sigma PRS Management Ltd, is an investment adviser to the PRS REIT, a real estate investment trust which listed on the London Main Market the same month as its launch.
PRS REIT itself reported that in the second quarter of its financial year, it achieved its initial target of committing GBP900 million in funding to new rental homes.
This is equal to 5,600 new rental homes when completed, in the three months to the end of December, up from GBP756 million committed for 5,100 homes the quarter before.
The estimated rental value of these homes is GBP57 million per annum, up from GBP47.1 million per annum the quarter before, PRS REIT said.
The number of homes completed as at December 31 rose to 775, up from 595 homes at the end of September.
Completed and contracted development totalled GBP530 million in gross development cost, up from GBP384 million the prior quarter, while committed development rose to GBP406 million from GBP372 million.
Rental income for the quarter rose to GBP7.0 million from 775 completed homes, compared to GBP5.7 million from 595 completed homes the year before.
PRS REIT said it expects to declare an interim dividend relating to the second quarter at the end of January, continuing to target a total dividend of 5 pence per share for the year.
Sigma said it has completed two self-financed private rented sector sites in the second half of 2018, which were purchased by PRS REIT for GBP22 million.
Sigma has a further five self-financed sites under construction that are under contract to be purchased by PRS REIT when completed and let. These sites are expected to deliver 280 private rented sector units with estimated rental value of GBP2.9 million per annum. Completion is expected during 2019 and first half of 2020.
Sigma said it will announce its 2018 results towards the end of April.
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