SGM.L Regulatory News (SGM)

4 Sep 2009 07:00



SGM

4 September 2009

Sigma Capital Group plc

("Sigma" or "the Group")

Trading Update

Sigma, the specialist asset management and advisory group, is providing the following update on trading for the six months to 30 June 2009.

Half year results are expected to be significantly ahead of current market expectations for the year, with profit before tax in excess of £1.4m (2008: £0.5m). This principally reflects the realised gain on the sale of Sigma's investment in its university IP commercialisation subsidiary, Frontier IP Limited. The subsidiary was reversed into a PLUS-quoted investment company and re-listed as Frontier IP Group plc on the PLUS Market on 13 May 2009. 

Net assets per share attributable to equity shareholders at 30 June 2009 are expected to be approximately 20p per share (31 December 2008: 15.9p). Net cash at 30 June 2009 stood at approximately £3.8m (31 December 2008: £3.8m). This figure excludes cash of £0.7m within Frontier IP Group plc.

A summary of trading at Sigma's three subsidiaries is set out below: 

Property Investment  

The trading backdrop for Strategic Investment Management Limited ("SI"), Sigma's property subsidiary, remained extremely difficult. During the first half, SI was focused on the completion of its 7th limited partnership and the launch of a new limited partnership. SI now intends to capitalise the outstanding fees of approximately £1.9m due from this 7th partnership, which will result in the successful full capitalisation of this partnership and the acquisition of a significant asset for the Group. This will be in addition to the investment of £0.5m in this partnership already held in the balance sheet. At the same time, in the light of commercial property values, SI has taken a cautious view of the current value of the total asset and has made a provision of £1.8m as at 30 June 2009. Notwithstanding this, the directors believe there will be significant realisable future value in this asset, in excess of the current carrying value. 

The launch of a new limited partnership was announced on 26 June 2009. However, SI is disappointed to report that this new limited partnership will not be proceeding, after the vendor subsequently withdrew from the deal. The associated abort costs will be £50,000. In addition, SI will not benefit from an expected £0.2m net contribution to overheads in the second half of this year.

On 2 August 2009, SI became a wholly owned subsidiary of Sigma and the management is engaged in a number of initiatives to enhance the business. 

Venture Capital Fund Management

Sigma's venture capital portfolio, in which the Group also has a direct investment interest of £1.7m, continues to perform well. This is despite the economic backdrop and credit must go to the management teams at the investee companies as well as to the executive investment team working to assist them.  

We see significant value for the Group in these holdings going forward. 

University IP commercialisation 

Sigma's interest in university IP commercialisation is held in Frontier IP Group plc, which is currently accounted for as a subsidiary as Sigma owns 77.4% of the equity in the company.

Frontier IP Group plc has made a good start to its life as a PLUS listed company, with its involvement in the establishment and First Closing of the first dedicated private equity fund for investment in intellectual property developed by Robert Gordon University as well as its first portfolio client investment. It is currently working on a number of interesting new initiatives.

Sigma's half year results are expected to be announced on 29 September 2009.

Enquiries

Company website: www.sigmacapital.co.uk