Sigma Capital, the urban regeneration investor whose projects have been hailed by the Prime Minister, has reported a pre-tax loss of £860,000, which it says is a 26% improvement on the previous year.
The Edinburgh-based group created as a technology investor in 1996 said 2013 had been " a turning point", as it unveiled a placing to raise £8m and give it the "enhanced financial strength to execute the large-scale projects in which it is currently involved".
The AIM-listed shares, which were at around 6p a year ago, rose 5% to 79p, valuing Sigma at £36m.
The shares began to soar last November when Sigma unveiled a joint venture with Gatehouse, a Shariah-compliant investment bank, for a proposed £700m development of up to 6,600 new private rented sector (PRS) homes in partnership with local authorities in north-west England, sparking David Cameron's endorsement. Last month Sigma acquired its first London site at Barking, within one of the largest residential regeneration schemes in Europe, prompting similar praise from mayor Boris Johnson. Although Sigma's share is 318 mainly family homes with a £50m development cost, the group is hopeful of being involved in further phases. Sigma's original property management activities, centred on the major development at Winchburgh in West Lothian and City Wharf in Aberdeen, also delivered "good results".
David Sigsworth, chairman, said: "Although the full financial benefits are not yet evident in Sigma's financial performance, we believe that the year represents a turning point in the group's development and in its potential to accelerate growth and earnings." He said the Gatehouse venture was a significant milestone though the deal was still subject to debt financing and Sigma was "currently in advanced discussions with leading banks".
He added: "We are now focused on broadening our local authority relationships to widen the geographic exposure of our PRS model.
"We also believe that our PRS model is extendable into the social housing market. With both local and central government support for our PRS initiative and with the backing of Gatehouse, we believe that 2014 will be another significant year for the group."
Sigma reported a 150% rise in revenue from services to £5.8m, and a 261% rise in revenue from property activities to £5.34m.
The operating loss was cut from £1.08m to £360,000 and the pre-tax loss from £1,17m to £860,000. Net assets per share fell from 5.7p to 5.5p and there was a 5% uplift in year-end cash at £1.07m.
The group said the increase in its trading loss from £249,000 to £409,000 was largely due to its wound-down venture capital operation.