- Construction delays eroded development fees in nine months to December
- Several agreements signed to scale-up the portfolio
A six-week shutdown in housebuilding weighed on development fees for Sigma Capital (SGM) during the nine months to December, but the groundwork has been laid for an acceleration in revenue.
The group signed an agreement with Countryside Properties (CSP) to deliver 5,000 private-rented homes over the next three years and extended its investment advisory agreement with PRS Reit (PRSR) to 2025. It also agreed a major joint venture with EQT Real Estate to manage the development of 3,000 homes in Greater London, which could generate up to £45m in fee income over the next five years.
In a sign of confidence, management maintained the dividend of 2p a share for the nine-month reporting period, in line with that declared over the prior 12 months.
At 152p, the shares trade at two times forecast book value at the end of December, broadly in line with the five-year average. Given the growing scale of the portfolio, that may provide room for further re-rating. Buy.
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