Sigma raises £8m to accelerate PRS development

Sigma, the residential and urban regeneration with major private rented schemes underway in Merseyside and Greater Manchester, said it has raised £8m through an oversubscribed share placing to "capitalise on its early mover advantage in the rented residential sector".

Sigma said in a statement to the stockmarket: "These opportunities already have support from local and national government to address the need for new homes in the UK's private rented sector. The directors believe the placing will also strengthen Sigma's balance sheet and give Sigma's key relationships (UK Government, the Greater London Authority, other local authorities and housebuilders) confidence in the company's ability to deliver large-scale housing development opportunities."

The placing will see 11.4m new ordinary shares issued with existing and new institutional investors at a price of 70p a share, a discount of 6.7% to the closing price of 75p on 18 March 2014. The placing is conditional on shareholder approval.

Shares in Sigma opened up 4p at 79p on Wednesday.

Graham Barnet, chief executive of Sigma, said: "This share placing helps to support Sigma's growth ambitions and I am delighted that it has been so well supported by both existing and new shareholders.

"There is an urgent need for new homes in the UK and we believe that Sigma is very well positioned to assist in the delivery of substantial numbers of new homes. We have been working on our innovative funding model to support this over the last three years, aided by our local authority partners in particular. Now we have moved closer to seeing first fulfilment through our Joint Venture with Gatehouse Bank plc. Once bank financing is in place, our proposed initial roll-out of new homes can begin."

Sigma announced a pre-tax loss of £860,000 on turnover of £11.15m in the year to the end of December 2013, improved from a £1.17m loss in 2012 on turnover of £3.81m.

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