SGM, Looks Appealing.......5 Jan 2016 13:57
Sigma Capital Building For Growth 5 January 2016
While the China situation and Middle East issues continue to hold sway with the market heavyweights, those at the smaller cap end and with a UK focused operation appear to be fairing somewhat better.
One company that has caught my eye this morning is AIM listed SIGMA CAPITAL a company focused on residential property and urban regeneration, with a particular and increasing emphasis on the rented housing sector (PRS).
In delivering a Trading Update that cites pre-tax profits now anticipated to come in well above previous expectations, I though it worth taking a closer look at this one, despite the shares already rallying 7% to £1.00 each.
Before taking a closer look at the business operations which it must be said appear to be in a market ripe for growth potential and profitable returns, it is perhaps worth noting the revised numbers issued from Broker N+1 Singer today.
Having previously pencilled in a pre-tax figure of £1.5m for full year 2015, the Broker is now looking for a number that will exceed £2m on the back of an outperformance from its private rental home scheme for Gatehouse, along with some strong income generated from non-PRS projects.
Despite upping the near term numbers however, the same Broker for now at least, retains the existing 2016 and 2017 guidance, which calls for pre-tax profits of £8.7m and £13.6m which would in turn deliver EPS of 8.7p and 12.6p.
Sigma, with a current market cap of £86m now features as one of the UK's leading providers of housing in the Private Rented Housing space with offices in key cities such as Edinburgh, Manchester and London.
Edinburgh home of Sigma's Head Office
Edinburgh Office
The company, which was founded back in 1996 listed on AIM in 2000 and has endured something of real rollercoaster ride for long term shareholders, the price back in 2009 slumping to just a few pence from a 60p high achieved in 2007.
Since then, the tide appears to have turned as it has concentrated on delivering on large scale residential developments along with urban regeneration. A seemingly strong relationship cemented with Gatehouse the Kuwaiti backed Investment Bank appears increasingly important within an expanding business which sees the partnership delivering some 918 homes on fourteen sites across Greater Manchester and Liverpool.
Phase 1 within this strategic relationship is already well underway with some 350 units now completed in a project that underpins the medium term prospects, while there are also some ambitious plans for further projects across the Midlands and the South of England for the longer term.
Developments in such new regions could now drive Sigma’s run rate to circa 3,000 units by the end of 2016, which would be an impressive result for the company.
In addition to the Gatehouse tie up, Sigma has also recently announced that it is preparing the first sites
Sign In
Follow the stocks
