Asset manager Sigma Capital Group has signed a management contract with Regenco Trading worth £1.8m over five years.
The deal involves the Winchburgh development in Edinburgh, which is valued at more than £1bn. Planning Permission in Principle is expected to be granted by the council in April 2012 and Barratt Homes and Miller Homes have been signed up to develop an inital 180 new homes. Work could start by the end of the summer.
The revenues should be recognised equally each year across the five years. The recurring nature of the revenues is a positive aspect of the deal for Sigma. There are also potential carried interest incentive fees based on profit targets.
Sigma is focusing on its Sigma Inpartnership urban property regeneration operations, which were bought in August 2011. The business has been involved with Winchburgh since 2010.
Sigma will report its 2011 figures by the end of April. Revenues will rise from £1.8m to £2.4m in 2011 and the loss will be less than half the £1m reported in 2010. Net assets per share will be approximately 8.2p a share. Net cash was £1.2m at the end of 2011.
At 6.75p a share, up 0.5p, Sigma is valued at £3.3m.
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