Trading Statement

SGM

SIGMA CAPITAL GROUP PLC

("Sigma" or "the Group")

Trading Update

Sigma, the specialist asset management and advisory group, is pleased to provide the following update on trading for the financial year to 31 December 2010. It should be noted that Sigma has also issued a separate announcement today, which comments on the proposed admission to AIM of its subsidiary, Frontier IP Group Plc ("Frontier IP"), and an associated share placing.

In the Group's half year results, we stated that the general economy presented ongoing challenges but, at the trading level, we expected the second half to be better than the first half. We are now pleased to report that second half revenues on a like-for-like basis improved by 11% over the first six months, generating a small profit in the second half before exceptional items. Administrative costs reduced by circa 5% and we are continuing to manage costs down where possible. With the change in Frontier IP's status from subsidiary company to associate company in January 2011, our year end accounts will concentrate on the results for the continuing businesses, which comprise our venture capital fund management and property investment management activities. These businesses made a small combined profit in the second half. The Group's cash position at the year end remained strong with unencumbered cash balances* at 31 December 2010 of £1.82m.

Trading results for the year as a whole will be affected by two significant non-recurring exceptional items. The first relates to Frontier IP and the change in its classification to associate company, reflecting the change in Sigma's shareholding in 2011. As a result of this, we will be recognising a write down of goodwill amounting to £1.36m in our year end figures. The second non-recurring exceptional item relates to the Group's guarantee of £1.25m to Bank of Scotland ("the Bank") in support of the Group's property fund, SI Limited Partnership No 6. As we previously stated, we expect this guarantee to be called upon during the course of the balance of the Bank's lending on this asset up to 2012. We remain in discussions with the Bank, however, we now believe it prudent to make a full provision against the guarantee. This remains the Group's only negative exposure to the properties under its management. In addition to the exceptional items, the sale of some Frontier IP shares in December 2010 as part of Frontier IP's share placing announced today resulted in a loss of £0.27m. The impact of the exceptional items together with the loss on the sale of the Frontier shares and the write downs in the value of some of our venture investments will result in losses for the year of approximately £3.9m. It should be noted that of this figure, only £0.2m of losses (excluding write down of investments) relates to the continuing businesses of the Group.

*unencumbered cash balances exclude the £1.25m bank guarantee

Prospects

As we stated in our interims, we have extended our commercial relationship with our largest shareholder, West Coast Capital ("WCC") and are working on a number of material property related initiatives with the backing of WCC. In addition, we believe that our remaining investment portfolio is carried at a conservative value of circa £1.4m which is in addition to our holding in Frontier, which is valued separately at £1.6m. We would anticipate a number of realisations in prospect over the next 24 months. Frontier IP's admission to AIM and placing increases the potential value of our shareholding in Frontier IP, with the company now better positioned for growth. Sigma's relationship with the Bank has also resulted in income opportunities for the Group in 2011. The expected income should generate significant cash flows and revenue for the Group over and above its current work in progress.

Sigma's financial position remains robust and given the potential of some of our work in progress, we remain optimistic about growth prospects for the business.

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