Final Results

 AIM: SGM

Sigma Capital Group plc

("Sigma" or "the Group" or "the Company")

Sigma is a finance, property and urban regeneration specialist

Key Points

·; Good progress in developing revenues from new property services - significant growth opportunity

·; Increased activity across local authority regeneration partnerships - esp. in Liverpool and Salford

·; JV established with property developer - with second JV established in 2013 - will accelerate the delivery of regeneration programmes

·; Winchburgh Development (350 hectare site), near Edinburgh, planning permission in principle granted and construction programme started

·; Board and management teams strengthened

·; Revenue from ongoing services up 40% to £2.33m (2011: £1.67m*)

- Property Division revenue more than doubled to £1.48m (2011: £0.61m)

- Venture Capital Division revenue reduced 20% to £0.85m (2011: £1.06m*)

·; Trading loss of £0.25m (2011: trading profit of £0.06m)

·; Operating loss of £1.08m (2011: loss of £0.12m)

·; Loss before tax reduced to £1.17m (2011: £1.42m)

·; Loss per share reduced to 2.57p (2011: 3.17p)

·; Cash balances at year end of £1.0m (2011: £1.3m)

·; Board confident of further progress - and work to develop funding model has the potential to accelerate growth significantly

* excluding a £0.8m one-off compensation receipt

David Sigsworth, Chairman, said,

"The Group has been wholly refocused on building its Property Division and this is now the Group's key growth driver. Our three local authority partnerships have been established to assist with large-scale residential and commercial urban developments to revive local economies and we estimate the gross development value across all three partnerships is c. £2bn over the next 10 to 15 years. The Winchburgh Development is one of the UK's single largest residential and mixed use developments, with a gross development value of c. £1 billion. In total across our contracted relationships, we control the delivery of in excess of 10,000 units of new housing stock revenues.

Our business model drives two sources of revenue for the Group, fees from the provision of property services as we deliver large development projects to our private and public-sector clients but also an equity share in the value we create for our partners.

We see strong growth opportunities and our work on developing a funding model has the potential to significantly accelerate the Group's rate of growth."

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CHAIRMAN'S STATEMENT

OVERVIEW

During the year, we made very encouraging progress in developing the Group's core property activities, and revenues in the Property Division in the second half were 57% ahead of the first half and up by 143% year-on-year. As we have previously reported, while these revenues are still maturing, our three local authority partnerships and close involvement with the major residential development at Winchburgh in Scotland provide a substantial opportunity for very significant revenue and earnings growth, especially as we develop our funding model. We have made important steps forward over the year in developing these opportunities with the benefits to be more evident in 2013 and beyond. Operationally, we have also strengthened our teams with some key appointments at both Board and management level. Financial results for the year to 31 December 2012 are in line with management expectations. As well as reflecting the development of our Property Division, they reflect our historic venture capital fund management activity.

As previously reported, the acquisition of Inpartnership Ltd (now named Sigma Inpartnership) in August 2011, which added three major local authority partnerships, in Liverpool, Salford and North Solihull, was the catalyst for the Group's transformation and we have substantially reshaped Sigma over the last 18 months. Our property activities now make up the Group's key growth driver, with our activities focused on property finance, residential and commercial development, and urban regeneration. We see strong growth opportunities and our work on developing a funding model has the potential to significantly accelerate the Group's rate of growth.

Over 2012, we moved forward across all property-related activities and I am especially pleased to highlight the increased activity within our local authority partnerships, where we are helping to deliver the regeneration goals of our local council partners. In particular, in Salford, we agreed terms for the delivery of further new homes in Higher Broughton and obtained detailed planning consent for a major new healthcare and retail scheme, triggering the completion of an associated development contract. We also established a joint venture with commercial property developer, Neptune Developments in May 2012 to help accelerate the regeneration of commercial sites in Liverpool. Another milestone in the year was the grant of planning permission in principle for the Winchburgh Development, near Edinburgh. This marks the start of a 15 to 20 year construction programme as the 350 hectare site is developed and we have signed an initial five-year contract to provide development management services.

We continued to work on the disposal of our residual venture capital interests, agreeing the sale of portfolio company, Extramed Ltd in the period and i-design group plc following the end of the period. We expect further realisations by the end of 2013, which should generate good cash flows and which will be reinvested in the Property Division. The total £0.8m provision against the carrying values of Sigma's holdings in the equity funds we manage has impacted our results for the year but the carrying value now stands below Sigma's share of the net asset value of the equity funds.

The new financial year to 31 December 2013 has started well. A major focus remains the development of our funding model for the roll out of a large-scale, rented, residential portfolio of properties and we are devoting significant time and resource to this initiative. This exciting opportunity flows from our existing partnership arrangements, which gives us the control over the delivery of significant housing stock. The total housing stock is in excess of 10,000 units with the housing at various stages in the delivery process. We have now commenced a process which we aim to bring to fruition by the time of the publication of our half year results in September.

In addition, we are seeing continuing momentum across our property activities, including a flagship regeneration project in Liverpool City centre in the area around Lime Street and the creation of a second joint venture, with Countryside Properties (UK) Ltd, to assist with the delivery of residential regeneration projects in Liverpool. We are also well advanced with the delivery of a new retail and office scheme in North Solihull, having secured a buyer (in a forward sale of the completed development) as well as planning permission, and construction finance. The third phase of a major new housing scheme in Norris Green also started in the first quarter of 2013.

On behalf of all shareholders I would like to thank all our staff for the significant effort they have expended in the last year.

RESULTS

Revenue from services for the year to 31 December 2012 increased by 40% to £2.33m (2011: £1.67m excluding a one-off compensation payment of £0.8m). This reflects a full year's contribution from Sigma Inpartnership, which helped revenue from the Property Division to more than double to £1.48m (2011: £0.61m). Revenues from our historic Venture Capital Division decreased by 20% to £0.85m (2011: £1.06m excluding the £0.8m one-off compensation payment). Total revenue reduced by £0.9m to £1.49m (2011: £2.41m) due primarily to unrealised losses on the revaluation of investments. This is also the main factor in the increased operating loss before tax of £1.08m (2011: £0.12m). The trading loss from the Property Division reduced significantly to £0.04m (2011: trading loss of £0.66m) and the Venture Capital Division posted a small trading profit of £0.06m (2011: £1.06m). The loss before tax for the year reduced to £1.17m (2011: loss of £1.42m) due to smaller losses relating to the associate holding in Frontier IP Group Plc ("Frontier IP").

Excluding a write-back in 2012 of costs relating to the North Solihull development, administrative costs increased by 14% to £2.7m reflecting a full year of Sigma Inpartnership.

Net assets per share at the year-end stood at 5.7p (2011: 8.2p) and cash balances at the year end were £1.0m (2011: £1.3m). Owing to the lead time for producing cash from the various developments we have completed in the last twelve months we expect the cash position to fall in the first half of the new financial year and then start to recover in the second half as our cash flows come on stream. However, this excludes any cash flow impact from our major work on our residential funding model.

The Directors do not recommend the payment of a dividend for the year.

BOARD CHANGES

In 2012 and during the first quarter of the current financial year, we made a number of Board appointments which have significantly strengthened the senior team.

In the first half of 2012, we appointed Graeme Hogg to the Board as Partnership Director. Graeme, who was a founding director of Sigma Inpartnership Ltd, is responsible for managing two of the Group's three local authority partnerships, in Liverpool and Salford, having originally helped to establish and structure all three partnerships. He has over 20 years' experience in the property sector, encompassing project management, development and corporate finance roles. Subsequently, in 2013, we appointed him to the newly created role of Chief Operating Officer.

We also appointed two new Executive Directors in 2013, Duncan Sutherland and William ("Bill") MacLeod. Duncan Sutherland, co-founder of Sigma Inpartnership Ltd, has been appointed Regeneration Director. He has substantial experience in major regeneration and infrastructure projects in the private and public sectors. He was appointed recently as a Non-executive Director of High Speed Two (HS2) Ltd which is delivering the new high speed railway network between London and the North of England. Bill MacLeod has over 25 years' experience of property investment, providing specialist property fund management advice and launching and managing property funds. He is assisting in the development of our funding model.

OUTLOOK

The Group has been wholly refocused on building its Property Division and there is considerable scope to grow revenues. Our three local authority partnerships have been established to assist with large-scale residential and commercial urban developments to revive local economies and we estimate the gross development value across all three partnerships is c. £2bn over the next 10 to 15 years. The Winchburgh Development is one of the UK's single largest residential and mixed use developments, with a gross development value of c. £1 billion. In total across our contracted relationships, we control the delivery of in excess of 10,000 units of new housing stock. Over the year, we have done much to drive projects within our local authority partnerships forward as well as agreeing the next phase of Sigma's involvement with the Winchburgh Development. This has resulted in greater visibility on revenue and profit into 2013 and beyond.

Our business model drives two sources of revenue for the Group, fees from the provision of property services as we deliver large development projects to our private and public sector clients but also an equity share in the value we create for our partners. The two joint ventures we have established in 2012 and 2013 for residential and commercial property development are important in quickening the pace of our delivery of projects and will also help to increase the breadth and scale of the projects we deliver. Even more significantly, our current work to develop our funding model has the potential to benefit significantly the Group's rate of growth over the foreseeable future.

Sigma has now positioned itself as a major player in the delivery of residential development and urban regeneration and the Board view growth prospects for the business with confidence.

David Sigsworth

Chairman

24 April 2013

BUSINESS REVIEW

Overview of the business

Sigma, together with its subsidiaries, is focused on property finance, property development, urban regeneration and property asset management.

The Group's property regeneration activities are largely undertaken by its subsidiary, Sigma Inpartnership Ltd ("Sigma Inpartnership"), which undertakes large scale property-related regeneration projects, working as a bridge between public and private sector organisations. Founded in 2001 and operating from offices in Manchester and Birmingham, Sigma Inpartnership has three long-term partnerships, with Liverpool City Council, Salford City Council and Solihull Metropolitan Borough Council, each ranging from 10 to 20 years' duration. The partnerships hold long term option arrangements with each local authority partner for the delivery of a mix of residential, commercial, education and health schemes.

Most of the Group's property management activities outside its local authority relationships are undertaken by Sigma Capital Property Ltd ("SCP"). In particular, SCP has the contract to manage the development at Winchburgh, near Edinburgh. The Group also acts as property manager for its remaining historic property limited partnership, SI Property Limited Partnership No 7. This partnership holds the investment in the City Wharf development in Aberdeen. The Group has a 19.3% holding in SI Property Limited Partnership No 7, although this investment was written down to nil in 2009.

The Group continues to manage its four venture funds, the Sigma Technology Venture Fund ("the Venture Fund"), the Sigma Innovation Fund (East of Scotland) ("the Innovation Fund"), the Sigma Sustainable Energies Fund ("the Sustainable Energies Fund") and the Sigma Sustainable Energy Fund II ("the Sustainable Energy Fund II") and is also an investor in these funds. In addition, Sigma holds some equity investments on its own balance sheet. The Group also manages two university funds on behalf of Frontier IP Group Plc ("Frontier IP"), an associate company, which assists in the commercialisation of university intellectual property. Frontier IP has a separate quotation on AIM and following a placing of its shares in December 2012, Sigma's holding decreased to 26.9% from 46.9%.

The activity in Sigma's Property Division and Venture Capital Division and the Group's strategy for the coming year is detailed below.

Property Division

The Winchburgh Development

The Winchburgh Development is situated eight miles from Edinburgh between the M9 and M8 motorways and encompasses approximately 350 hectares of land, making it one of the UK's single largest residential and mixed use developments, worth an estimated £1bn in total. Sigma has been actively involved in the Winchburgh Development since 2010 and has led the planning and commercial negotiations with West Lothian Council on behalf of Regenco (Winchburgh) Ltd. These negotiations resulted in the granting of planning permission in principle in April 2012 for a masterplan, which includes the construction of 3,500 new homes as well as associated mixed use infrastructure, of schools, a town centre, retail facilities and a commercial park.

The release of the master plan consent has enabled the commencement of a development period expected to be phased over the next 15 to 20 years and Sigma has been retained as Development Manager on behalf of Regenco Trading Ltd for the project implementation stages. This will generate fees of £1.8m over the five years from 2012 to 2016 with the potential to generate additional carried interest incentive fees based on profit targets.

In 2012, Sigma also procured the enabling works required for the construction of an initial 182 units of housing across the first two development plots. The construction is being undertaken by Barratt Homes and Miller Homes and started in the last quarter of 2012, with the first completed housing units forecast for occupation from May 2013.

We are now concluding final land sale terms with a further two national house builders and a major affordable housing provider. The conclusion of these agreements will bring the contracted development capacity at Winchburgh to a cumulative total of 502 residential units within 12 months of the grant of planning permission in principle.

Detailed master planning work has also progressed to the proposed town centre area and programme dates have been agreed with West Lothian Council for the transfer of further serviced development plots to the Council for 41 social rent housing units and a 16,000 sq ft community partnership/health centre.

Liverpool Partnership (also referred to as Regeneration Liverpool)

Our Liverpool Partnership is a limited liability partnership with Liverpool City Council formed in 2007 with SIP. The partnership was given an initial ten year option over a 60 acre residential development site, known as Norris Green, which has outline planning consent for around 800 new homes, with a total development value of c. £120m. The partnership has been established with the flexibility to develop additional sites at the discretion of the Liverpool City Council.

In 2012, we formed a joint venture company with a major local commercial property development company, Neptune Developments Limited, to accelerate the delivery of the commercial regeneration projects in Liverpool and in the first quarter of the new financial year, we established a second joint venture company, with house building specialist, Countryside Properties (UK) Ltd, to assist us in the delivery of residential regeneration projects in the City.

Over the last 18 months, Liverpool City Council has increased the number of sites under option (subject to the conclusion of formal option agreements) to the Liverpool Partnership. Sites added are Gateacre, Stonebridge Cross, Lime Street/Knowledge Quarter, Lodge Lane and Edge Hill District Centre.

The regeneration of the Norris Green site is progressing well with 115 units constructed. The third phase, of 63 homes, moved onto site in March 2013 and a detailed planning application was submitted in January 2013 for a fourth phase, of a further 167 units.

Land in the Liverpool Partnership can be developed using any one of the following three ways: by the Liverpool Partnership (with Sigma Inpartnership earning a management fee and participating in a profit share); by Sigma Inpartnership (with Sigma Inpartnership earning a fee and an agreed priority profit); or by the Liverpool Partnership selling a site on the open market, with Sigma Inpartnership earning a percentage of the sales price achieved. At least 20% of the land must be disposed of by sale on the open market. The majority of the land will be developed by Sigma Inpartnership through our new joint venture companies with Countryside Properties (UK) Ltd and Neptune Developments Limited. The third phase of housing noted above will be developed using our new residential joint venture company.

After the year end, we commenced site investigations at Gateacre, a 15 acre former school site, which has the capacity to be developed to accommodate around 200 new family homes. In addition, our proposals for the 70 acre Stonebridge Cross site are progressing well and we envisage the development of a major mixed use scheme, with a development value of c. £120m including a new secondary school, anchored by a 74,000 sq ft food store and 68,000 sq ft of ancillary non-food retailing and leisure. We have submitted a detailed planning application for the new secondary school and works are expected to start on site in autumn 2013. A planning application for the food store is also currently under submission. Sigma will benefit from a series of development management fees and profit sharing in relation to the commercial elements.

The Liverpool partnership secured a land option agreement to develop the Lime Street /Knowledge Quarter site in March 2013 - a major flagship mixed-use opportunity to the south and east of Lime Street railway station in the centre of Liverpool, with a development value for the initial three to five year phase of c. £140m. Together with our commercial joint venture company, we are initially bringing forward a development scheme for Lime Street Eastern Terrace, which will be followed by the redevelopment of the Mount Pleasant Car Park as part of the development strategy for the wider area.

Salford Partnership (also known as Higher Broughton Partnership)

The Salford Partnership is our partnership with Salford City Council and Royal Bank of Scotland and we made further good progress here over 2012. Planning consent for a major new 30,000 sq ft healthcare and retail scheme, worth approximately £9 million at Newbury Place, Higher Broughton was achieved in June 2012. The scheme includes a GP surgery, dental practice and associated retail space including a pharmacy, optician as well as a 4,000 sq ft food store pre-let to Tesco, and planning consent triggered the completion of the sale contract and a land payment and value point for Sigma generating in excess of £0.3m revenue in the year.

The Salford Partnership also completed the sale of six acres of land to housing developer, Countryside Properties Ltd, who started construction of 80 new family homes in late November 2012. This will realise a base fee over the next three years for Sigma of £350,000 and the potential for a further £150,000 of value as units are sold on a plot sale basis, providing income through 2013 and beyond.

Detailed negotiations are now underway on the development of the remaining frontage site at Higher Broughton, which will see the development of around 90 new apartments with a head lease to a local housing association. If successful, Sigma will undertake the financing and development management function and will generate fees from both activities. We have also opened up further discussions with Salford City Council on other sites in the City.

North Solihull Partnership

The partners of the North Solihull Partnership are Solihull Metropolitan Borough Council, Bellway Homes, West Mercia Housing Association and Sigma Inpartnership. The North Solihull Partnership's remit is to coordinate and deliver the regeneration of an area in North Solihull. This project commenced in 2007 and has an anticipated 20 year life cycle to deliver new and replacement housing stock, ten new primary schools and five new village centres incorporating neighbourhood retail facilities with new medical and council facilities. Our key role is the provision of development management services, including strategic development planning, coordination and procurement of development works and general development management in return for agreed fees for these services. Thereafter there are specific sites which we have the right to develop directly on a commercial basis.

Of the ten new primary schools, four have been delivered and we are progressing with the design and procurement of two new primary schools with a combined value of circa £15m.

We are presently working on two village centres budgeted to generate development management fees and development profit in excess of £0.3m in 2013. For the first we are coordinating the procurement and delivery of a £6m contract to deliver new infrastructure and an enterprise centre. Sigma Inpartnership is the developer for the second village centre, North Arran Way, and we are now on site delivering a new 30,000 sq ft neighbourhood retail and office scheme with the office pre-let to Solihull Metropolitan Borough Council and the eight retail units pre-let to a mix of local and national retailers. Post the year-end, we secured a forward commitment from a buyer for the completed development. The construction phase will be funded by way of a loan from the Growing Places Fund.

We are also working on plans for a new medical centre with two local GP practices and with the local care trust for the delivery of a circa 19,000 sq ft facility to deliver medical services to the community. Looking forward we will be undertaking some initial strategic planning of a third new village centre within the area.

City Wharf, Aberdeen

On the back of the good progress made in 2011 and 2012 in securing lettings for the development, which resulted in the scheme producing 85% of its full rental potential, the lender continues to be supportive of our asset management strategy to seek further tenants for the remaining vacant space in order to maximise the long term value of the asset.

In early 2013, we secured funding from the lender to carry out a refurbishment of the two vacant floors and the common areas of Exchequer House, the original office building on the site constructed in the 1970s. This refurbishment will bring the building up to the standard demanded by the large oil companies which are currently very active in acquiring new office accommodation in Aberdeen. These works should be completed during the latter half of 2013.

The four remaining leisure units have proved more difficult to let as demand from this sector of the market is aligned to the wider national economy which remains difficult for the retail and leisure sectors. Further marketing initiatives are being undertaken to promote the available space including other potential uses for the units.

Property finance

Initiatives on property finance solutions and opportunities, both within individual local authority partnerships and associated projects, continues to be a focus for the Sigma team. The majority of these projects are for residential development for the private rental market and we are looking to source institutional and private equity finance in this developing and active marketplace. Funding structures vary but predominantly focus on a capital recovery model taking advantage of current strong rental market performance and prospective uplifts in capital values from base values enhanced by low entry costs. Discussions are also ongoing around an income model for long-term income secured against housing association covenants. The potential scale of these funding opportunities is considerable with progress, particularly on the capital recovery model, having been very encouraging to date and we would hope to see traction by the time of our results in September.

In addition, Sigma is involved in a number of financing opportunities in the commercial and infrastructure sectors, with the aim of unlocking new sources of institutional and private equity funding. One project is a development for student accommodation in Edinburgh, which requires £7m of construction finance.

Venture Capital Division

The Group manages six funds, four venture capital funds and two university funds. It has a limited partner interest in each of the four venture capital funds: 11.8% in the Venture Fund; 10.8% in the Innovation Fund; 6.7% in the Sustainable Energies Fund; and 5.1% in the Sustainable Energy Fund II.

As the four venture funds we currently manage come to the end of their lives during the period to June 2015, the investment team continues to focus on managing the process of realising value from the 16 remaining investments held in these funds. The resulting cash will be delivered back to the limited partners of each of the funds, which in each case includes Sigma.

The investment team is continuing to work with the management teams of the investee companies and our co-investors to ensure that there is an active focus on exit activity where appropriate. During the year one investee company, Extramed, was sold resulting in a small payment to Sigma and we engaged advisors in connection with the potential sale of two others. Following the year end, one investee company, i-design group plc, was acquired by Cardtronics, Inc, returning approximately £0.2m to Sigma and another is actively in discussions with multiple potential acquirers. In addition, early discussions have taken place with respect to the potential sale of two other investee companies.

The venture capital fund management business is expected to generate strong cash flows for Sigma during 2013 from a mix of management fees, retainers from investee companies and investment realisations.

Financial Review of 2012

Overall, the Group made a small trading loss in the year of £249,000 (2011: trading profit £61,000) due primarily to costs incurred by the holding company on Group matters. The Property Division made a small trading loss and showed a much improved position from 2011, benefitting from the opportunities provided by Sigma Inpartnership and other management contracts. The Venture Division made a small trading profit. The Group made an operating loss of £1,082,000 (2011: operating loss £123,000) due to unrealised losses on the revaluation of its investments of £826,000 (2011: unrealised profits £3,000). Losses arising from the holding in Frontier IP of £111,000 (2011: loss and provision £1,307,000) resulted in a loss for the year of £1,171,000 (2011: loss £1,415,000). Administrative costs include a write back of costs of £159,000 incurred on the development in North Solihull. Excluding this write back, administrative costs for the year totalled £2,734,000 (2011: £2,407,000), an increase of 14% due to the inclusion of a full year's cost for Sigma Inpartnership.

During the year, Sigma Inpartnership did not generate any development profit and so no amounts were payable to West Coast Capital Trading Limited ("WCC Trading") as deferred consideration. We expect that Sigma Inpartnership will generate development profit from 2013 onwards which will trigger payments to WCC Trading as detailed in note 10 of these financial statements.

Net assets of the Group decreased to £2,597,000 at 31 December 2012 (31 December 2011: £3,753,000), equivalent to 5.7p per share (31 December 2011: 8.2p).

Balance sheet

The principal items in the balance sheet at 31 December 2012 are the investments in the venture capital funds of £691,000 (2011: £1,473,000) and cash of £1,024,000 (2011: £1,265,000). The investments in the venture capital funds are spread across the four funds managed by Sigma which hold investments in 16 companies (2011: 17 companies). The spread of the underlying investments across the four funds is given in this Business Review under Venture Capital Division. The Group's current assets exceed its current liabilities by £952,000 (2011: £1,502,000). The Group has no long term liabilities.

Cash flow

The Group's cash balances reduced by £241,000 to £1,024,000 in 2012 (2011: reduction of £556,000 to £1,265,000). Cash outflows included the payment of £282,000 to the limited partners of the Venture Fund, satisfying that commitment in full. Other changes in working capital accounted for a cash inflow of £169,000 (2011: outflow £571,000) and the purchase of investments in the year net of disposals resulted in a cash inflow of £55,000 (2011: £122,000).

Key performance indicators

The key performance indicators used by management to assess the success of the business are:

·; Ratio of recurring income to operational costs: target to be a minimum of one

·; Cash flow: to be positive

The Venture Capital Division met this performance indicator in 2012 but, as expected, the Property Division missed this target although the ratio of total income to operational costs improved to 0.9 times (2011: 0.5 times). With the Group's focus now firmly on property activities, the ratio is expected to show improvement in 2013. The Venture Capital Division was not cash flow positive due to the payment of the commitment to the limited partners referred to above. The Property Division was cash flow positive.

Principal risks and uncertainties

The specific financial risks of price risk, interest rate risk and credit risk are discussed in the notes to the financial statements. The broader risks - financial, operational, cash flow and personnel - are considered below.

The principal financial risks of the business are a reduction in value of the Group's investment in its venture capital funds and a reduction in the value of its holding in Frontier IP. As far as the investments in the funds are concerned, the risk is mitigated to a certain extent with the funds being invested in 16 underlying companies. The focus for the investment team in 2013 is to continue to work with the portfolio companies on their exit strategies and to assist in identifying potential acquirers for these businesses, thereby realising value for the Group. At the same time, the investment team continues to work with the portfolio companies to ensure that the companies remain properly funded.

Frontier IP has a separate quote on AIM and its value is therefore linked in part to its share price. Although the share price may be affected by general market conditions, it will primarily be affected by the market's view of the growth potential of the company. There are inherent risks for Frontier IP as it is a small company in the early stages of its development. At the end of 2011, Sigma made a provision against its investment in Frontier IP to reflect these risks and the illiquid nature of the stock. At 31 December 2012, the bid price of Frontier IP's shares was 12p per share whereas Sigma held its shares in Frontier IP at a value equivalent to 9p per share.

The principal operational risks of the business reside around management's ability to secure new contracted income streams and to minimise the risks arising from property development. The acquisition of Sigma Inpartnership has increased the Property Division's recurring income stream and its pipeline of work for recurring fee opportunities and one-off fee transactions. The current economic environment increases development risk, both execution risk and time to completion. Development risk is managed by maintaining close control of pre-contract costs and by limiting the number of early stage developments financed by the Group at any one time.

The main cash flow uncertainties of the business centre around the timing of property project development fees, the receipt of profits arising out of the partnerships with the councils and the timing of investment realisations by the venture funds.

The Group is dependent on its Executive Directors and senior management for its success. There can be no assurance that the Group will be able to retain the services of these key personnel although historically the turnover of senior staff has been low. Incentives for senior staff include share options and carried interest in managed funds.

At 31 December 2012, the four venture funds held investments in the following companies.

In addition, the RGU Fund held an investment in Counterweight Ltd, a developer of low cost, nurse-led weight management programmes.

CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

For the year ended 31 December 2012

There were no comprehensive gains or losses in either year other than those included in the comprehensive income statement.

CONSOLIDATED BALANCE SHEET

At 31 December 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2012

CONSOLIDATED CASH FLOW STATEMENTS

For the year ended 31 December 2012

NOTES

1. This preliminary announcement was approved for issue by a duly appointed and authorised committee of the Board of Directors on 24 April 2013.

2. Basis of preparation

The financial information set out in this announcement does not constitute statutory financial statements for the year ended 31 December 2012 or 31 December 2011. The report of the auditor on the statutory financial statements for each of the years ended 31 December 2012 and 31 December 2011 were (i) unqualified; (ii) did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006. The statutory financial statements for the year ended 31 December 2011 have been delivered to the Registrar of Companies. The statutory financial statements for the year ended 31 December 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) as endorsed for the use in the European Union, this announcement does not itself contain sufficient information to comply with IFRS.

3. Segmental information - business segments

At 31 December 2012 the Group is organised into two main business segments: property (finance, residential development and regeneration) and venture capital fund management plus holding company activities. The segment analysis for the year ended 31 December 2011 has been adjusted to include holding company activities.

The segment analysis for the year ended 31 December 2012 is as follows:

The segment analysis for the year ended 31 December 2011 is as follows:

4. Unrealised losses on the revaluation of investments

The total fair value adjustments made during the year relating to investments, both financial assets at fair value through profit and loss and trading investments are set out below.

5. Taxation

There is no charge to taxation as the Group did not generate taxable profits.

The Group's deferred tax assets, other than those relating to short term timing differences, are not recognised in accordance with Group policy.

6. Loss per share

The calculation of the basic loss per share for the year ended 31 December 2012 and 31 December 2011 is based on the losses attributable to the shareholders of Sigma Capital Group plc divided by the weighted average number of shares in issue during the year.

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all dilutive potential ordinary shares. The Company has only one category of dilutive ordinary shares, those share options granted where the exercise price is less than the average price of the Company's shares during the year. Diluted loss per share is calculated by dividing the same loss attributable to equity holders of the Company as above by the adjusted number of ordinary shares in issue during the year ended 31 December 2012 of 45,571,656 (2011: 44,404,212).  For both the year ended 31 December 2012 and the year ended 31 December 2011, as the calculation for dilutive loss per share reduces the net loss per share, the diluted loss per share shown is the same as the basic loss per share.

7. Cash used in operations

8. Availability of statutory financial statements

Copies of the full statutory financial statements will be available from the Company's offices at 41 Charlotte Square, Edinburgh EH2 4HQ no later than 31 May 2013 and are available on its website at www.sigmacapital.co.uk.