LONDON (Alliance News) - Sigma Capital Group PLC on Tuesday said it expects to report a significant uplift in revenue and profitability in 2018, benefiting from the launchof PRS REIT PLC the year before.
The stock was trading 4.7% higher on Tuesday at 138.68 pence a share. PRS REIT shares up 0.3% at 94.08p.
The residential development company said trading in the second half of 2018 was "very strong". As a result the company expects to report pretax profit for 2018 slightly ahead of current market forecasts.
Sigma said it anticipates to deliver pretax profit of GBP12.4 million for the year to December 31, more than tripled year-on-year, on revenue of GBP12.5 million. In 2017, Sigma's pretax profit was GBP4.1 on revenue of GBP4.4 million.
The results were boosted by continued growth of PRS REIT, which was launched in May 2017, Sigma said. Over the second half, the company said it made "very good" progress in driving the PRS REIT's expansion, including into new geographic regions, securing 20 additional development sites.
Sigma's subsidiary, Sigma PRS Management Ltd, is an investment adviser to the PRS REIT, a real estate investment trust which listed on the London Main Market the same month as its launch.
Sigma said it has completed two self-financed private rented sector sites in the second half of 2018, which were purchased by PRS REIT for GBP22 million.
Sigma has a further five self-financed sites under construction that are under contract to be purchased by PRS REIT when completed and let. These sites are expected to deliver 280 private rented sector units with estimated rental value of GBP2.9 million per annum. Completion is expected during 2019 and first half of 2020.
At the end of 2018, the total number of sites that were completed or contracted for PRS REIT stood at 43 across six regions, Sigma said. These sites have a gross development cost of GBP530 million and will deliver 3,575 new homes, with 798 homes already completed.
Sigma said it will announce its 2018 results towards the end of April.
Prs Reit (PRSR)