Sigma Capital Share Discussion Threads

[nurdin] 19/4/2016 08:11

Still under the radar of most but the press coverage over the next few days should hopefully change that.

[glasshalfull] 19/4/2016 07:49

Agree, strong results this morning with a positive outlook.

They've surpassed Singers "exceeding" forecasts,

"Sigma has delivered significant positive earnings growth from the first full year of institutional PRS development. Revenue grew by 74% to £6.7m and, with a relatively stable cost base, underlying EBITDA grew by nearly tenfold to £2.0m utilising the capacity in the cost base to deliver operational gearing.

Adj. PBT was 10% ahead of our upgraded estimate, at £2.3m, although the EPS beat was lower at 2% (FY15 2.9p vs N+1Se 2.8p) on non-cash tax and a higher than forecast share count."

Appears that they have retained PBT forecasts for this year & next at £8.7m & £13.6m respectively, per the header information. Adj EPS for the current year is raised marginally to 8.2p for a prospective PER of only 11.7

Regards,
GHF

[nurdin] 19/4/2016 07:22

Yes indeed!!

[saucepan] 19/4/2016 07:19

Stunning results and great outlook.

[glasshalfull] 13/4/2016 11:45

Another strong read-across following Countryside Properties t/s this morning. Is Sigma the partner referred to in respect of the West Midlands?



"We continue to be very successful at winning new business in the Partnerships division. In addition to those sites already included in the land bank, we have been awarded preferred bidder status on a further eight sites, including Beam Park, Dagenham (2,781 plots), Rochester Riverside, Kent (1,262 plots) and Hounslow School, London (284 units). We now have 7,727 plots in the Partnerships land bank with an additional 6,338 plots awarded as preferred bidder.

Our future bid pipeline continues to grow and now stands at over 30,000 potential plots as we see a growing appetite from the public sector to regenerate their assets. We have identified an opportunity to expand the Partnerships division into the West Midlands with demand from an existing partner and plan to open a regional office there by the end of the year."

Regards,
GHF

[nurdin] 13/4/2016 09:59

Stew,the very rapid growth in earnings is fast eating into the PE .At the current price the stock is trading on 2016 PE of 11.35x which drops to just 7.2x next year.That to me is very cheap for the growth!

GHF thanks for including the Midas tip. An excellent coverage by the way !

[stewy_18] 13/4/2016 07:18

Good write-up GHF. It is certainly interesting, although I would want to know what could go wrong here. It is on a (deservedly) hefty premium at the moment and I have been burnt with stories like this before. What could impact its progress? Changes in macroeconomic conditions? A slump in the housing market? (unlikely). Net cash is not an issue so that is always a good sign. I will put it on my watch list, but not for me at the moment.

Thanks for sharing.

Best

Stuart

[glasshalfull] 12/4/2016 23:17

Cheers nurdin.
Header updated with the MIDAS tip as requested.

Kind regards,
GHF

[glasshalfull] 12/4/2016 23:13

Evening buffy

The revenue & PBT figures are correct to the best of my knowledge. Last Singer update I'm aware of refers to the January "significantly ahead" statement but clarifies the numbers I've provided.

Sigma will generate c. £14m fee income over the next 3 years from the Gatehouse and Grainger partnerships according to Singers forecast & explained in p7 of their 2014 AR.

The JV with Gatehouse,

"The PRS Fund generates fees for the Group through each stage of its life. An upfront fee is paid on commencement of construction, a management fee is paid quarterly over the duration of the delivery period and a quarterly asset management fee is paid once the properties are completed. Sigma will also retain a share of the net disposal profits on the assets subject to a minimum return to investors. In addition, Sigma has made a loan to the PRS Fund in respect of the first phase which may be converted to equity conditional on the final construction costs of the initial investments."

In respect of Grainger PLC,

"At present, Grainger expects to fully own the initial developments sourced by Sigma, although in the future it may also seek to syndicate its investment to third party investors, including Sigma. In addition to sourcing development opportunities, the Group expects to act as development manager on the majority of projects. The Group will earn a profit share on each housing development, split into a sourcing fee and a development management fee."

Hope this assists your research.

Kind regards,
GHF

[nurdin] 12/4/2016 22:59

I think he means revenues dont look right as they are much lower than the PBTs

GHF could be worth inserting the recent Midas tip in the header?

[battlebus2] 12/4/2016 22:52

Just checked the forecasts and looks right to me, it's amazing growth...

[buffythebuffoon] 12/4/2016 21:58

Sorry GHF, surely there's something wrong with the revenue and PBT figures for 2016 & 2017 in the header?

Buffy

[glasshalfull] 12/4/2016 13:45

You're welcome nurdin.

Further positive news, home completions also appear to be accelerating.

I noted that the Sigma website indicated 388 homes completed on 10th March; 421 on the 18th March...fast forward a further 3-weeks and we now have 539 homes completed.




Regards,
GHF

[glasshalfull] 12/4/2016 13:40

NEW THREAD

Broker info, forecasts & investment summary contained in the new thread header.
Results scheduled in a weeks time (19th April).



Regards,
GHF

[nurdin] 12/4/2016 12:48

Thanks GHF

[glasshalfull] 09/4/2016 13:19

Mf - If you're referring to my post, I mentioned results 10-days away. Not 3-days.

I've them pencilled in for 19.04.


Regards
GHF

[mfhmfh] 09/4/2016 04:05

Is it confirmed the results are in 3 days? I thought they were sometime in mid-April.

[glasshalfull] 08/4/2016 15:19

I'll create a new thread over coming days so that it's ready in time for the results which are only 10-days away. This one dates back to 2005 when Sigma was a far different proposition.

Regards,
GHF

[harry vederci] 08/4/2016 14:57

strong fundies as quoted by nurdin above

stakebuilding here while its quiet pre results

[shanklin] 21/3/2016 08:29

So how many years down the road is the intrinsic value 150p and what assumptions are built into that valuation please?

P.S. No position here. Just a little curious after nurdin mentioned it to me.

[nurdin] 18/3/2016 16:26

Good to see you here GHF...sp responding as well :o)

[glasshalfull] 18/3/2016 15:03

Time to declare an interest here.

Like yourself nurdin, also picking up a few as they languished @83.5p these last few weeks. Appears that a number of other respected posters have also observed value here ;-)

Share price has fallen back 21% since the "significantly ahead" statement at the beginning of January.

Home completions also appear to be accelerating. The Sigma website indicated 388 homes completed on 10th March...fast forward 8-days and this has risen to 421.



Singers had this to say in January,

FY15 ahead of expectations

"Sigma has released a positive trading update for FY15 indicating that group PBT will now exceed £2.0m (N+1Se £1.5m). A combination of factors has driven performance in H2:

i) expedited delivery of Private-Rented Sector (“PRS”) homes for Gatehouse, particularly in Phase 1
ii) positive rental performance of completed assets driving recognition of carried interest
iii) outperformance from non-PRS development fees. 2015 final results will be announced in mid-April.

Run rate to increase in 2016 Phase 1 with Gatehouse is now well underway (350 units completed) and Phase 2 has now been initiated (900 new PRS homes), complemented by 225 on-balance sheet PRS units (FY16).

We expect that Sigma will complete c.1,000 PRS homes during 2016. The update reiterates the ambition for further phases with Gatehouse in the Midlands and the South of England. Developing sites equivalent in scale to those in the North West would drive Sigma’s run rate to 3,000 units by the end of 2016.

Sigma expects to deliver PBT in excess of £2.0m. We upgrade our FY15 PBT forecast by 38% to £2.1m (from £1.5m) from a 12% underlying revenue upgrade and no change in operating costs; observing the benefits of operational gearing in the model. We leave our existing earnings forecasts for FY16 and FY17 unchanged and will review these in April when a further update on prevailing performance is expected.

We value Sigma using an OpCo/PropCo model which points to a 150p/share intrinsic valuation once existing funding capacity has been deployed and multiple phases of development have been completed for Gatehouse."

Forecasts:-

2015 (year end Dec)

Rev £6.8m
PBT £2.1m (+950%)
EPS 2.8p (+600%)

2016

Rev £7.2m
PBT £8.7m (+314%)
EPS 8.1p (+189%)

2017

Rev £10.2m
PBT £13.6m (+56%)
EPS 12.8p (+58%)

Regards,
GHF

EDITED post to include Forecasts