LONDON (Alliance News) - Sigma Capital Group PLC said Wednesday revenue from services jumped 150% to GBP5.8 million as the firm reported a year of development, boosted by a new joint venture, and announced a share placing, raising GBP8.0 million.
The residential and urban remuneration specialists said 2013 was a "turning point" for the firm, reporting a 150% increase in revenues from services to GBP5.81 million from GBP2.33 million in 2012. Revenue from property activities reached GBP5.34 million from GBP1.48 million for the year, up 261%.
The revenues boosts helped the firm to narrow its pretax loss, reduced to a GBP860,000 loss from last years' loss of GBP1.17 million, a 26% improvement.
In its results for the year to December 31, 2013, the company said its objective to develop a funding model to support the creation of a large-scale portfolio of new privately rented homes in the UK moved forward significantly, with its growth ambitions boosted by a joint venture and a share placing which raised GBP8 million.
Formed in November last year, Sigma's joint venture with Gatehouse Bank PLC is for the proposed roll-out of up to 6,600 new rental homes across the UK with an estimated development value of GBP700 million. Sigma said commencement of the first phase of the venture, which is supported by its local authority partnerships, is subject to bank financing.
The company has also announced an oversubscribed share placing, raising GBP8.0 million, which it said will allow it to "capitalise on its early mover advantage in the rented residential sector and to successfully execute large scale development opportunities."
The placing, which remains conditional on shareholder approval, will be effected by the issue of 11,428,571 new ordinary shares of 1 pence each, conditionally placed with existing and new institutional investors at a price of 70 pence per Placing Share, a discount of 6.7% to the closing price of 75 pence on March 18, 2014.
While the firm said its growth prospects remain "very positive," Sigma will not pay a dividend for 2013.
"Although the full financial benefits are not yet evident in Sigma's financial performance, we believe that the year represents a turning point in the Group's development and in its potential to accelerate growth and earnings," said Chairman David Sigsworth.
"Our strong relationships with our local authority partners and track record in urban regeneration have been key to the development of our model and the Gatehouse agreement. Once bank financing is in place, the roll-out of the first phase of the joint venture, the construction of c. 2,000 new rental homes, can commence," he added.
Looking ahead, the company said it will remain focused on broadening its local authority relationships to widen the geographic exposure of its Private Rented Sector model, which Sigma believes could be extended into social housing.
"With both local and central government support for our PRS initiative and with the backing of Gatehouse, we believe that 2014 will be another significant year for the Group. The Board views the year ahead with confidence," said Sigsworth.
Shares in Sigma rose on the news, making it one of the biggest gainers on the AIM market Wednesday morning, trading 6% higher at 79.5 pence per share.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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