Sigma bullish as pipeline approaches £1bn

Sigma, the PRS and residential developer, expects to report a 205% increase in pre-tax profit for 2018 to around £12.4m, it has said in a trading update.

The group said that trading in the second half of the financial year, especially in the last quarter, was very strong, and the board expects full year results to show a significant uplift in revenue and profitability. The company’s pipeline now stands at around £1bn.

Sigma said that the results partly reflect the strong macro-economic drivers underpinning the continuing successful growth of the PRS REIT, describing the REIT’s launch in May 2017 as a “significant milestone” in the development of Sigma’s business model. Sigma subsidiary Sigma PRS Management acts as investment Adviser to the PRS REIT, which continues to be highly acquisitive, with 43 sites completed or contracted as of year end.

Over the second half of 2018, Sigma said that good progess had been made with main PRS partner Countryside Properties, securing 20 development sites for the PRS REIT. Sigma also completed two self-financed PRS sites in the second half that were subsequently purchased by the PRS REIT for a total consideration of £22m.

The company has a further five self-financed sites under construction that are under contract to be purchased by the PRS REIT when completed and let. The sites are expected to deliver 280 homes for a gross development cost of £46.3m and deliver £2.85m in rental income per year.

By the year end, Sigma PRS had £900m of the PRS REIT’s funding either deployed or committed to deployment, including £530m of completed or contracted development.