Sigma share price rises ahead of profit rise news

The group, which specialises in development of the private rented sector (PRS) in urban regeneration, said its second half has progressed ahead of schedule, with the rate of delivery of PRS units ahead of management’s initial targets.

In a statement, the group, which saw shares rise 10p to 103.5p on the news to value Sigma at £91m, said: “Sigma is expected to deliver profit before tax in excess of £2 million, which is significantly ahead of current market expectations.”

It added “The company remains very well positioned for 2016 with work in progress ahead of plan as recent announcements have indicated.”

The second phase of its venture with Gatehouse Bank to build about 900 new rental homes is now under way across Greater Manchester and Liverpool, and its target for 2016 is to launch similar-sized phases in two further regions in the Midlands and the South.

“This will deliver a run rate of over 3,000 units by the end of 2016, firmly positioning the company as one of the largest housing delivery platforms in the UK and the largest in PRS,” Sigma said.

“During the first half of 2016, we also expect to begin construction with our second housebuilding partner Keepmoat. This will add additional capacity alongside our long-term partner, Countryside Properties, as well as access to further land opportunities in addition to our current pipeline.”

In August Sigma said half-year pre-tax losses widened from £200,000 to £400,000, while revenue was down from £1.8m to £1m.

But in September the AIM-listed firm raised £20m from investors at 75p a share.

It said last month it was confident of securing debt finance that would enable it to build about 550 new rental homes with a total development value in excess of £60m by the end of 2017.

Chief executive Graham Barnet has said his ultimate target is 25,000 homes, including developments in Scotland.