Sigma profits rise as social PRS strategy takes shape

The specialist in affordable private rented housing, with pilot schemes in Liverpool and Manchester, produced healthy final results for the year ended 31 December 2015.

Revenues increased by 74% to £6.72m (2014: £3.87m). Profit before tax was up nearly 10 times to £2.14m (2014: £0.21m).

Net assets per share more than doubled to 35.9p (2014: 17.4p). Cash at year end increased to £25.14m (2014: £5.22m).

The first homes in the PRS joint venture with Gatehouse Bank completed and let in March 2015, with demand “above initial expectations”. So far 549 homes have been completed and let, forecast to produce an annual rental income of £7m (gross) by end of Q3 2016.

The second phase of 813 homes, with a gross development cost of over £100m, started on site in December 2015 backed by UK PRS Properties, a fund principally backed by the Kuwait Investment Authority and institutional shareholders from the State of Kuwait.

There was also a self-funded PRS portfolio, also begun in December, supported by a £20m share placing, with the initial phase due to contain 346 family homes with a gross development cost of £44m in Greater Manchester, Merseyside and Sheffield.

Sigma said it expected a run-rate of 3,000 PRS units by end of 2016 across sites in process.

David Sigsworth, chairman, said: “This has been another landmark year for Sigma and we are delighted to report that the group’s results are now beginning to show the benefits of our PRS strategy, with profit before tax up nearly 10 times to £2.14m.

“Sigma is now firmly established as a leading participant in unlocking the PRS opportunity in the UK, delivering family homes across the regions, which the UK needs. Macro drivers of undersupply of new homes and historic poor management of rental stock mean that our PRS platform is gaining significant traction. With our PRS venture with Gatehouse performing ahead of expectations on the first phase, our launch of a second phase, with UK PRS Properties, and our own PRS portfolio underway, we are confident of further progress during 2016.”

Shares in Sigma rose 3p to 100p, valuing the business at £85m.

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