ULS Technology PLC – Half-year Report

ULS Technology plc (AIM: ULS), the provider of online B2B platforms for the UK conveyancing and financial intermediary markets, announces its half yearly results for the six months to 30 September 2019. During the period the Company continued to generate significant profits and remained highly cash generative whilst further developing its DigitalMove platform and positioning the business to scale up rapidly as and when market conditions improve.

 

Financial Highlights

·     Revenue declined by 8% to £14.55m (H1 2018: £15.79m) as expected

·     Gross margin improved to 43.9% (H1 2018: 41.8%)

·     Underlying Profit before Tax¹ declined by 4% to £2.78m (H1 2018: £2.89m)

·     IFRS Profit before Tax increased by 3% to £2.37m (H1 2018: £2.30m)

·     Adjusted basic EPS¹ declined by 3% to 3.60p (H1 2018: 3.73p)

·     Net debt of £3.8m as at 30 September 2019 (FY 2018: £3.4m)

o  Final payment of contingent consideration for CAL of £2.3m in the period

·     Cash from operating activities unchanged at £2.85m

·     Interim dividend of 1.25p per share, an increase of 4% on the same period last year

¹.  Before exceptional costs and amortisation of acquisition intangibles.

Operating Highlights

·     Increase in brokers actively using our platforms to 3,231, an increase of 6% over the 6-month period

·     Number of new introducers won including Principality Building Society

·     Continued investment in DigitalMove with successful initial roll out

·     46 solicitor or conveyancing firms now actively using DigitalMove on a regular basis

 

Steve Goodall, Chief Executive of ULS Technology plc, commented:

“We are pleased with our performance in the first half of the year in a difficult market. Over the past 12 months, and in line with the Company’s growth strategy, our customer base has evolved towards higher margin introducers. As such the loss of certain high-volume low-margin accounts has been partially offset by winning, retaining and growing more medium sized accounts which are already delivering results and will help drive near-term growth.

“Looking further ahead, we expect to generate significant growth opportunities via DigitalMove and are delighted by the early progress and potentially transformational nature of this product. It has been designed to benefit existing and new customers and to open up new high margin revenue streams for the Company.

 

“DigitalMove is currently already available for sale, purchase and remortgage transactions through ‘eConveyancer’ and is available to a wide range of our introducers. Initial feedback has been extremely positive and early statistics point to significant reductions in time in the conveyancing process. We are now entering the next phase where DigitalMove is due to be made available to conveyancing transactions generated outside of ‘eConveyancer’ with the potential for all conveyancers in the country to use it. We believe that this is the right time to increase the rate at which we are investing in this product and to accelerate its development and rollout. While this will initially impact profitability, we are targeting doubling profitability within three years of the investment.“