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RNS
ULS Technology PLC   -  ULS   

Half-year Report

Released 07:00 03-Dec-2019

RNS Number : 4063V
ULS Technology PLC
03 December 2019
 

3 December 2019

ULS Technology plc

(The "Group" or the "Company")

 

Half Yearly Report

"Robust financial performance in a challenging housing market"

 

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)

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."

 

 Enquiries:

ULS Technology plc

Tel: 01844 262392

Geoff Wicks, Chairman

 

Steve Goodall, CEO

 

John Williams, Finance Director

 

Numis Securities Limited (Nomad & Broker)

Tel: 0207 260 1000

Stuart Skinner / Paul Gillam

 

Walbrook PR Limited 

ulsgroup@walbrookpr.com or Tel: 020 7933 8780

Tom Cooper

 

Nick Rome

 

     

 

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

 

 

 

Chief Executive's Report

 

The Group continues to make good profits, generate significant cash and grow its dividend. Importantly, given the nature of our strong and growing product base, an increasing number of new introducers using us for the first time helped us to offset the effect of client losses. Overall this has driven increased margins and laid strong foundations for future growth. We have also been pleased with the significant number of new wins we have achieved.

 

Furthermore, we are delighted by the initial success of DigitalMove which is now available to most advisers using eConveyancer with over 4,000 instructions having been processed by the platform. We have received a lot of extremely positive feedback and statistics from these transactions going through the platform and can see that the conveyancing process is being shortened by a significant number of days. For example, we have found that house purchase cases instructed through DigitalMove are reaching the point of exchange 20 days quicker than usual.

 

The next phase of DigitalMove's development will enable conveyancers to use it for all their cases, not just ones that have come through eConveyancer. For many that will mean that they will be able to integrate it into their case management systems, which will maximise efficiency. We already have a number of sizeable conveyancers expressing firm interest in integrating with DigitalMove and we expect to start the first integrations in the first half of 2020.

 

Strategy

 

The Group's mission is to make the home-moving process better for everyone. To date this has been mainly achieved by presenting the consumer, primarily via introducers, with a range of quality conveyancers to choose from at competitive prices via easy-to-use technology. We are now going a step further with the launch of DigitalMove. Our technology is now directly involved in the conveyancing process after the conveyancer has been chosen right up to completion making that process easier, quicker, safer and digital.

 

In the short-term, the Group's revenue and profit will largely derive from the process of choosing the conveyancer through our technology. We are continuing to invest in this process and focus on increasing the number of advisers who use our platforms to help their customers choose a conveyancer. We are also concentrating on enhancing the range of products that are available through our platforms and ensuring that they are price competitive so that advisers have the full range of products that they need to offer. We believe that this will encourage more advisers to use our platforms and in doing so, recognise the value it provides to their customers.

 

Accelerated Investment to monetise DigitalMove

 

While DigitalMove firmly helps enhance our existing platforms, we also believe that it has huge potential as a standalone product and that there is significant opportunity for it to become the leading player in the conveyancing digital client-interface market. Initial feedback and case statistics have been very positive and as a result of expressions of interest from a number of conveyancers to integrate their case management systems with DigitalMove, we believe that now is the time to capitalise on this opportunity.

 

Therefore, we plan to utilise existing cash facilities to accelerate the development of DigitalMove as we significantly increase the resource devoted to this new product. In the short term this investment is expected to impact Group profitability by circa £1 million in the next financial year before the product starts to generate significant revenue and margin later in the development plan. However, we believe that this is a unique opportunity for the Group and that time to market will be a decisive factor in determining the extent of the success of the product. The accelerated investment is a key driver in the Group's new ambition to double profitability within three years of the investment, a target which we expect to be able to achieve from internally generated cashflow.

 

Finance Director's Report

The Group has continued to generate strong profits and cashflow over the period despite an unhelpful housing market. Over the last two years or so, we have been developing and, more recently rolling out, DigitalMove. We have now capitalised £1 million against this product. Increasingly, resource is being devoted to DigitalMove across the organisation over and above the amount capitalised. We have been able to do this due to the strength of the core business despite not yet being at a point where DigitalMove is generating incremental revenue.

 

Having made the final payment for the CAL acquisition, we are now able to accelerate the investment in DigitalMove from internal cash resources. We expect this to have no material impact on our leverage or dividend policy. The increased investment planned is largely in extra headcount across the business to accelerate the development and the distribution of DigitalMove while making sure we are still fully focused on our successful core business. We also plan to increase our marketing spend in support of this activity. We do not expect to capitalise significant amounts of this additional spend and we will start to amortise that which we have already capitalised. With the revenue generation point of the product not expected until sometime in H2 FY21 this will therefore reduce profits initially.

 

Non-IFRS Profit Measures

 

In the Financial Highlights above we show the movement in Underlying Profit before Tax. This is a non-IFRS profit measure and the table below shows how that measure is arrived at from IFRS profit.

 

Underlying Profit before Tax                                            

 

 6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Reported PBT

2,371

 

2,296

 

4,110

 

 

 

 

 

 

Amortisation of intangible assets arising on acquisition

270

 

270

 

540

Exceptional costs

 

 

 

 

 

M&A activity costs

27

 

-

 

268

Adjustment of contingent consideration

113

 

323

 

484

 

 

 

 

 

 

 

2,781

 

2,889

 

5,402

 

Underlying Profit after Tax                                

 

 6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Underlying Profit before tax

2,781

 

2,889

 

5,402

 

 

 

 

 

 

Tax on profit on ordinary activities

(414)

 

(434)

 

(827)

Tax relating to amortisation of intangibles arising on acquisition

(48)

 

(48)

 

(96)

 

 

 

 

 

 

 

2,319

 

2,407

 

4,479

 

We believe that providing details of how these non-IFRS profit measures are calculated by reference to the IFRS profit number helps aid the understanding of the movement in the IFRS number as well as giving an indication to the long-term profitability and cash generating ability of the Group.

IFRS 16

 

IFRS16 has been applied for the first time in these interim financial statements. The Group has opted to use the modified retrospective approach. The application of IFRS 16 to the Group's three property leases has created right of use assets of £1.6 million prior to deprecation and corresponding lease liabilities split between current and non-current liabilities. The right of use assets are recognised within property, plant and equipment. The impact of applying IFRS16 on profit before tax is negligible.

 

Borrowing Facilities

 

In May 2019, the Company increased its revolving cash flow facility by £2 million to £4 million. The facility is now in place until December 2021 and the terms remain the same as the existing facility. The facility was increased to enable the final contingent consideration payment for CAL to be made without placing any strain on the Group.

 

Interim Dividend

 

The Company is pleased to announce that it will pay an interim dividend of 1.25 pence per share; this is a four per cent increase on the dividend paid for the six months to 30 September 2018. The dividend record date is 13 December 2019, and the dividend is expected to be paid on 3 January 2020.

 

Outlook

 

The UK housing market remains subdued and there is the possibility that this will remain the case until the Brexit process is concluded. However, there does appear to be a good degree of confidence in medium-term prospects for the market

 

The aim, however, is to grow regardless of the market backdrop. We continue to grow amongst the smaller brokers and work is underway to return to growth within larger introducers.

 

Importantly, DigitalMove presents a substantial new revenue opportunity. We aim to have an annual run rate of over 50,000 incremental transactions going through DigitalMove by the end of FY21 and to be starting to earn revenue from some of those transactions by that point. The Group is determined to take advantage of this unique product and looks forward to updating shareholders on the acceleration of investment over the coming months.

 

 

Steve Goodall

Chief Executive Officer

 

 

 

UNAUDITED INCOME STATEMENT

Six months to 30 September 2019

                                                                                                                               

 

 

Note

 

 6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year ended 31 Mar 2019

 

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

 

£'000s

 

£'000s

 

£'000s

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

14,546

 

15,795

 

29,963

Cost of sales

 

 

 

(8,154)

 

(9,189)

 

(17,450)

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

6,392

 

6,606

 

12,513

 

 

 

 

 

 

 

 

 

Administrative expenses

 

 

 

(3,798)

 

(3,928)

 

(7,531)

 

 

 

 

 

 

 

 

 

Operating profit before exceptional expenses

 

 

 

2,594

 

2,678

 

4,982

Exceptional administrative expenses

 

3

 

(140)

 

(323)

 

(752)

 

 

 

 

 

 

 

 

 

Operating profit

 

 

 

2,454

 

 

2,355

 

 

4,230

 

 

 

 

 

 

 

 

 

Finance income

 

 

 

7

 

5

 

12

Finance costs

 

 

 

(90)

 

(64)

 

(132)

 

 

 

 

 

 

 

 

 

Profit on ordinary activities before taxation

 

2,371

 

2,296

 

4,110

 

 

 

 

 

 

 

 

 

Tax on profit on ordinary activities

 

 

 

(414)

 

(434)

 

(827)

 

 

 

 

 

 

 

 

 

Profit for the financial period

 

 

 

1,957

 

1,862

 

3,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (£)

 

4

 

0.0303

 

0.0289

 

0.0509

Diluted earnings per share (£)

 

4

 

0.0289

 

0.0274

 

0.0483

                   

 

 

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

Six months to 30 September 2019

                                                                                                                               

 

 

 

 

6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year ended 31 Mar 2019

 

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

 

£'000s

 

£'000s

 

£'000s

 

 

 

 

 

 

 

 

 

Profit for the period

 

 

 

1,957

 

1,862

 

3,283

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

 

1,957

 

1,862

 

3,283

 

 

UNAUDITED BALANCE SHEET

At 30 September 2019

 

 

Note

 

30 Sep 2019

 

30 Sep 2018

 

31 Mar 2019

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

£'000s

 

£'000s

 

£'000s

NON-CURRENT ASSETS

 

 

 

 

 

 

 

Intangible assets

 

 

6,333

 

6,510

 

6,442

Goodwill

 

 

11,008

 

11,008

 

11,008

AFS financial assets

 

 

100

 

100

 

100

Investment in Associates

 

 

528

 

566

 

551

Property, plant and equipment

 

 

2,016

 

380

 

437

Long-term receivables

 

 

200

 

200

 

200

Prepayments

 

 

152

 

182

 

151

 

 

 

20,337

 

18,946

 

18,889

CURRENT ASSETS

 

 

 

 

 

 

 

Inventory

 

 

49

 

46

 

48

Trade and other receivables

 

 

2,151

 

2,160

 

1,874

Cash and cash equivalents

 

 

2,455

 

1,828

 

1,852

 

 

 

 

 

 

 

 

 

 

 

4,655

 

4,034

 

3,774

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

24,992

 

22,980

 

22,663

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY ATTRIBUTABLE TO EQUITY

 

 

 

 

 

 

 

HOLDERS OF THE COMPANY

 

 

 

 

 

 

 

Share capital

5

 

259

 

259

 

259

EBT reserve

 

 

(484)

 

(484)

 

(484)

Share premium account

 

 

4,609

 

4,585

 

4,585

Capital redemption reserve

 

 

113

 

113

 

113

Share based payment reserve

 

 

367

 

223

 

293

Retained earnings

 

 

7,161

 

5,603

 

5,973

TOTAL EQUITY

 

 

12,025

 

10,299

 

10,739

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

Borrowings

6

 

1,250

 

2,250

 

1,750

Lease liabilities

 

 

1,389

 

-

 

-

Deferred taxation

 

 

983

 

695

 

1,031

 

 

 

3,622

 

2,945

 

2,781

CURRENT LIABILITIES

 

 

 

 

 

 

 

Trade and other payables

 

 

3,706

 

6,422

 

5,813

Borrowings

6

 

5,000

 

3,000

 

3,000

Lease liabilities

 

 

172

 

-

 

-

Current tax payable

 

 

467

 

314

 

330

 

 

 

9,345

 

9,736

 

9,143

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

12,967

 

12,681

 

11,924

 

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

 

24,992

 

22,980

 

22,663

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED STATEMENT OF CHANGES IN EQUITY

Six months to 30 September 2018

 

 

 

Share capital

 

 

EBT reserve

 

 

Share premium

 

Capital redemption reserve

Share- based payment reserve

 

 

Retained earnings

 

 

Total equity

 

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

 

 

 

 

 

 

 

 

For the period ended 30 September 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 April 2019

259

(484)

4,585

113

293

5,973

10,739

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

1,957

1,957

Total comprehensive income

-

-

-

-

-

1,957

1,957

 

 

 

 

 

 

 

 

Issue of shares

-

-

24

-

-

-

24

Exercise of options

-

-

-

-

(5)

5

-

Share-based payments

-

-

-

-

79

-

79

Dividends paid

-

-

-

-

-

(774)

(774)

Total transactions with owners

-

-

24

-

74

(769)

(671)

 

 

 

 

 

 

 

 

At 30 September 2019

259

(484)

4,609

113

367

7,161

12,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the period ended 30 September 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 April 2018

259

(527)

4,585

113

267

4,643

9,340

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

1,862

1,862

Total comprehensive income

-

-

-

-

-

1,862

1,862

 

 

 

 

 

 

 

 

Purchase of shares by EBT

-

(207)

-

-

-

-

(207)

Exercise of options

-

250

-

-

(16)

(161)

73

Share-based payments

-

-

-

-

(28)

-

(28)

Dividends paid

-

-

-

-

-

(741)

(741)

Total transactions with owners

-

43

-

-

(44)

(902)

(903)

 

 

 

 

 

 

 

 

At 30 September 2018

259

(484)

4,585

113

223

5,603

 

10,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended 31 March 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 April 2018

259

(527)

4,585

113

267

4,643

9,340

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

3,283

3,283

Total comprehensive income

-

-

-

-

-

3,283

3,283

 

 

 

 

 

 

 

 

Purchase of shares by EBT

-

(207)

-

-

-

-

(207)

Exercise of options

-

250

-

-

(16)

(161)

73

Share-based payments

-

-

-

-

42

-

42

Deferred tax share options

-

-

-

-

-

(277)

(277)

Payment of dividends

-

-

-

-

-

(1,515)

(1,515)

Total transactions with owners

-

43

-

-

26

(1,953)

(1,884)

 

 

 

 

 

 

 

 

At 31 March 2019

259

(484)

4,585

113

293

5,973

10,739

 

 

 

 

 

 

 

 

 

UNAUDITED STATEMENT OF CASH FLOWS

Six months to 30 September 2019

 

 

6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year ended 31 Mar 2019

 

 

Unaudited

 

Unaudited

 

Audited

 

 

£'000s

 

£'000s

 

£'000s

Cash flows from operating activities

 

 

 

 

 

 

Profit before taxation

 

2,371

 

2,296

 

4,110

Finance income

 

(7)

 

(3)

 

(12)

Finance costs

 

90

 

64

 

132

Loss on disposal of plant and equipment

 

-

 

-

 

1

Share of loss / (profit) of associate

 

23

 

(19)

 

(4)

Amortisation

 

557

 

531

 

1,076

Depreciation

 

128

 

110

 

204

Share-based payments

 

79

 

(28)

 

42

Tax paid

 

(325)

 

(506)

 

(824)

 

 

 

 

 

 

 

 

 

2,916

 

2,445

 

4,725

Changes in working capital

 

 

 

 

 

 

(Increase) / decrease in inventories

 

(1)

 

9

 

7

(Increase) / decrease in trade and other receivables

 

(278)

 

(678)

 

(361)

Increase in trade and other payables

 

211

 

1,073

 

463

 

 

 

 

 

 

 

Net cash generated from operating activities 

 

2,848

 

2,849

 

4,834

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of intangible software assets

 

(447)

 

(319)

 

(798)

Purchase of property, plant and equipment

 

(86)

 

(219)

 

(371)

Disposal of property, plant and equipment

 

-

 

-

 

1

Payment of deferred and contingent consideration

 

(2,337)

 

(2,935)

 

(2,934)

Interest received

 

7

 

3

 

12

 

 

 

 

 

 

 

Net cash used in investing activities

 

(2,863)

 

(3,470)

 

(4,090)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Share issue proceeds

 

24

 

-

 

-

Dividends paid

 

(774)

 

(741)

 

(1,515)

Interest paid

 

(90)

 

(64)

 

(132)

Lease payments

 

(42)

 

-

 

-

Repayment of term loan

 

(500)

 

(500)

 

(1,000)

Movement on rolling cash flow facility

 

2,000

 

1,000

 

1,000

Share transactions by EBT

 

-

 

(135)

 

(134)

 

 

 

 

 

 

 

Net cash generated from / (used in) financing activities

 

618

 

(440)

 

(1,781)

 

 

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents 

 

603

 

(1,061)

 

(1,037)

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,852

 

2,889

 

2,889

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

2,455

 

1,828

 

1,852

 

 

 

Notes to the financial information

Six months to 30 September 2019

 

1.    GENERAL

 

The interim financial information for the six months to 30 September 2019 is unaudited and was approved by the Directors of the Company on 26 November 2019.  The condensed financial information set out above does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

 

The Company's operations is subject to some seasonality and also some cyclicality both in line with the housing market.

 

A dividend of £774,110 has been paid in the six months ended 30 September 2019 (six months to 30 September 2018: £741,273).

         

2.    ACCOUNTING POLICIES

 

The interim financial information in this report has been prepared on the basis of the accounting policies set out in the Group's most recent annual financial statements for the year ended 31 March 2019.

 

The Company adopted IFRS 16 'Leases' in the six-month period, following the standard becoming effective for periods commencing on or after 1 January 2019.

 

IFRS 16 'Leases' provides a new model for lessee accounting in which all leases, other than short-term and small-ticket-item leases, will be accounted for by the recognition on the balance sheet of a right-to-use asset and a lease liability, and the subsequent amortisation of the right-to-use asset over the lease term.

 

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an on-going process of review and endorsement by the European Commission.

 

The financial information has been prepared using accounting policies that the Directors expect to be applicable as at 31 March 2020, with the exception of IAS 34.

 

The Directors have adopted the going concern basis in preparing the financial information.  In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the foreseeable future. 

 

The condensed financial information for the period ended 31 March 2019 set out in this interim report does not comprise the Group's statutory accounts as defined in section 434 of the Companies Act 2006.

 

 

 

 

3.    EXCEPTIONAL EXPENSES

 

Exceptional Administrative Expenses                                           

 

 6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

£'000

 

£'000

 

£'000

Acquisition related expenses

27

 

-

 

269

Adjustment to expected contingent consideration

113

 

323

 

483

 

 

 

 

 

 

 

140

 

323

 

752

 

 

 

 

4.    EARNINGS PER SHARE

 

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

 

Basic and diluted earnings per share                                             

 

 6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

£

 

£

 

£

 

 

 

 

 

 

Total basic earnings per share

0.0303

 

0.0289

 

0.0509

Total diluted earnings per share

0.0289

 

0.0274

 

0.0483

 

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

 

 

6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

£'000s

 

£'000s

 

£'000s

Earnings used in the calculation of total basic and diluted earnings per share

1,957

 

1,862

 

3,283

 

 

Number of shares

 

6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

Number

 

Number

 

Number

Weighted average number of ordinary shares for the purposes of basic earnings per share

64,496,307

 

64,459,290

 

64,462,605

 

Taking the Group's dilutive potential ordinary shares into consideration in respect of the Group's weighted average number of ordinary shares for the purposes of diluted earnings per share, is as follows:

 

 

 

 

 

 

Number of shares

6 months to 30 Sep 2019

 

6 months to 30 Sep 2018

 

Year to

31 Mar 2019

 

 

 

 

 

 

Potential dilutive effect of share options and warrants

3,273,128

 

3,550,829

 

3,475,267

 

 

 

 

 

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

67,769,435

 

68,010,119

 

67,937,872

 

  

5.    SHARE CAPITAL

 

a)    Share Capital

 

The Company has one class of Ordinary share with 0.4p nominal value per share which carries no right to fixed income nor has any preferences or restrictions attached.

 

On the 24 April 2019, the Company issued 43,219 new ordinary shares of 0.4p with a share premium of £24,030. The issue of shares was in connection with an exercise of share options.

 

                Issued and fully paid:

 

30 Sep 2019

 

30 Sep 2018

 

31 Mar 2019

 

£'000s

 

£'000s

 

£'000s

 

 

 

 

 

 

Ordinary shares of 0.40p each

259

 

259

 

259

 

 

 

30 Sep 2019

 

30 Sep 2018

 

31 Mar 2019

 

Number

 

Number

 

Number

 

 

 

 

 

 

At the beginning of the period

64,828,057

 

64,828,057

 

64,828,057

 

 

 

 

 

 

Shares issued in the period

43,219

 

-

 

-

 

 

 

 

 

 

At the end of the period

64,871,276

 

64,828,057

 

64,828,057

 

 

b)    Share based payments

 

During the period the Group granted no new options.

 

All options in issue vest in 3 equal tranches, three, four, and five years after date of grant. The options are settled in equity once exercised. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Options are forfeited if the employee leaves the Group before the options vest.

 

 

 

Number of options

 

Weighted average exercise price

 

 

 

£

 

 

 

 

Outstanding at 1 April 2019

3,329,055

 

0.93

 

 

 

 

Granted

-

 

-

Forfeited prior to vesting

(33,630)

 

1.13

Exercised

(43,219)

 

0.56

 

 

 

 

 

 

 

 

Outstanding at 30 September 2019

3,252,206

 

0.93

 

 

 

6.    BORROWINGS

 

 

 

Bank loans
£'000

Total debt
£'000

Balance at 1 April 2019

4,750

4,750

Loan repayments

(500)

(500)

Movement in revolving cash flow facility

2,000

2,000

Balance at 30 September 2019

6,250

6,250

 

 

 

Balance at 1 April 2018

4,750

4,750

Loan repayments

(1,000)

(1,000)

Movement in revolving cash flow facility

1,000

1,000

Balance at 31 March 2019

4,750

4,750

 

In December 2016, the Group took out a 5-year term loan for £5 million and a £2 million revolving cash flow facility. Both had an initial interest rate of 1.90% above LIBOR but this has reduced to 1.55% above LIBOR during the period as certain financial criteria were met. The term loan is subject to repayments of £250,000 plus accrued interest quarterly. In May 2019, the revolving cash flow facility was increased to £4 million with the interest rate remaining unchanged.

 

Loans are secured by way of fixed and floating charges over all assets of the Group.

 

  

7.    CONTINGENT CONSIDERATION

 

In December 2016, the Group acquired 100% of the issued ordinary share capital of Conveyancing Alliance Holdings Limited and its 100% subsidiary Conveyancing Alliance Limited (together referred to as "CAL"), companies incorporated in England and Wales. Part of the consideration is contingent based on a range of between 0.5 and 1.75 times annualised PBT of CAL for the period between completion to 31 March 2018 and also for the 12 months ending 31 March 2019. A first payment of £2,935,000 relating to this contingent consideration was paid in July 2018. The second and final amount was £2,337,000 and was paid in July 2019.

 

The amounts shown in the balance sheet are at net present value and the movement arising on this is shown below

 

 

30 Sep 2019

 

£'000s

 

 

At 1 April 2019:

 

Current (included in trade and other payables)

2,224

Non-current

-

 

4,675

 

 

Movements during the period:

 

Payments of contingent consideration

(2,337)

Change in NPV due to movement in time

113

 

 

At 30 September 2019:

 

Current (included in trade and other payables)

-

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Half-year Report - RNS