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Annual Report &
Accounts 2020
Innovate
Collaborate
Succeed
ULS Technology Annual Report & Accounts 2020
A UK leader in
the provision
of online
legal services
Must reads
03
03
Investment
case
Page 03
08
14
16
Our business
model
Page 08
Our
strategy
Page 14
DigitalMove
case study
Page 16
Contents
Overview
01 Highlights
02 At a glance
03 Our investment case
Strategic Report
06 Chairman’s statement
08 Our business model
10 Our market
14 Our strategy
18 Chief Executive’s statement
20 Financial review
22 Risk management
24 Section 172 (1) statement and
stakeholder engagement
26 Corporate social responsibility
Governance
30 Board of Directors
32
Chairman’s introduction to
governance
34 Corporate governance
statement
36 Directors’ report
39 Independent auditor’s report
Financial Statements
46 Consolidated Income
Statement
46 Consolidated statement
of comprehensive income
47 Consolidated
Balance Sheet
48 Consolidated statement
of changes in equity
49 Consolidated statement
of cash flows
50 Notes to the consolidated
financial statements
75
74 Parent Company
Balance Sheet
Parent Company
statement of
changes in equity
76 Notes to the Parent
Company financial
statements
82 Company
information
To find out more visit
ulstechnology.com
01
Operational highlights
Financial Highlights
Innovate
Launch of DigitalMove
The Group has launched DigitalMove which aims to make home moving a better
experience. It provides an easy-to-use secure portal allowing the consumer and
conveyancer to interact with each other in an efficient and paperless environment
transforming the speed and the way conveyancing is done. While launched and
already giving customers and solicitors a better experience than they previously
had it is still early in the development life cycle of the product and the Group
continues to invest and make improvements.
find out more on pages 16 and 17
Rapid Remortgage
Utilising the functionality of DigitalMove in conjunction with its core conveyancing
platform, the Group has been developing a product which enables a remortgage
case to be legally ready by the end of the working day following receipt of the
starter pack from the customer. This product has been launched in early FY21.
Collaborate
Team Approach
The Group has around 100 employees and there has always been a culture of
collaboration. This year the Group has created a number of cross-functional
teams to help ensure we are getting as many points of view into each stage
within each channel. Within each channel the Group has four teams called Vision,
Create, Share & Support.
Solicitor Conference
The Group is very proud of the wide panel of high-quality solicitors it has on its
panel and a close working relationship is key to the success of the Group. For the
first time, we decided to bring together as many of these solicitors in one place in
the Oxfordshire countryside. The Group put together a great line-up of speakers,
the event was over-subscribed and was a great success.
Succeed
Over 10,000 cases have gone through DigitalMove
Although only launched around a year ago over 10,000 instructions have already
gone into DigitalMove. Furthermore there have been great time savings for those
customers using it.
Over 3,500 intermediary advisers using our platforms
Currently nearly all the Group’s revenue is generated from its conveyancing
comparison platforms. Clearly this remains a key area of focus and the Group
is delighted that the number of intermediary advisers using the platform grew
by 18% over the period.
£28.3m -6%
Revenue
Revenue is generated principally from the
completion of conveyancing cases and also the
associated sales of searches and ID checks.
2020
2019
2018
£28.3m
£30.0m
£30.7m
£4.0m -2%
Profit before Tax
IFRS measure of profit which is after
exceptional costs.
2020
2019
2018
£4.0m
£4.1m
£2.7m
£4.8m -11%
Profit before Tax (underlying)
Non-IFRS measure of profit which excludes
items not likely to impact future cash flows
(see page 21).
2020
2019
2018
£4.8m
£5.4m
£5.5m
Overview Strategic ReportGovernanceFinancial Statements 02
At a glance
Our vision
To make home moving
and ownership a better
experience for everyone.
Our mission
To become the leading provider
of digital tools to transform the
experience of buying, selling
and owning property.
Our strategy
Our strategy is to continue to
generate profitable growth by:
Providing best in
class solutions
Continue to provide best in
class solutions that deliver
choice, service and
competitive pricing.
Innovation
Continue to develop new
products, such as DigitalMove,
which are better than what
currently exists in the market
and work for solicitors,
consumers and introducers.
Acquisition
We will continue to seek out
opportunities which provide
value and help us grow our
core proposition.
What we do
Our technology brings together
people buying, selling and
refinancing their homes
with DigitalMove enabled
conveyancers providing
customers with a better
experience, quality rated
choice and excellent value.
Our distribution
channels
We primarily provide our
services through white-labels
to mortgage brokers, banks,
building societies and price
comparison websites amongst
others. Our service allows
our partners to provide their
customers choice and enables
them to complete mortgage
applications efficiently.
ULS Technology Annual Report & Accounts 2020 03
Our investment case
1
2
3
4
5
Cash Generative
In a normal economic environment the Group is highly
cash generative, turning a high percentage of profit in
to cash. This allows it to invest in future growth, product
development and acquisitions.
find out more on page 49
Innovative product development
The Group has a long track record of developing
innovative products. This started with eConveyancer
which was the first product of its kind and currently
it is illustrated by DigitalMove and Rapid Remo.
find out more on page 16
Proprietary IT
Innovative products such as eConveyancer through to
DigitalMove have all been built in-house with the Group
owning the IP.
Growing distribution base
The Group has a wide distribution network through
mortgage advisers, lenders, estate agents and
direct-to-consumer websites.
find out more on page 44
Independent
Unlike many of the other players in the market, the
business is not connected to other parts of the market,
in particular it does not own a conveyancer. This allows
it to give consumers an independent choice and
engenders a feeling of trust in the quality ratings that
the Group publishes on each solicitor on its panel.
find out more on page 04
£6.0m
EBITDA (underlying)
EBITDA (underlying) excludes
exceptional items
find out more on page 21
72,445
Conveyancing completions
A conveyancing completion is when
the conveyancing transaction has been
marked as completed on the ULS
platform by the conveyancer and
revenue is recognised.
106,051
Conveyancing instructions
A conveyancing instruction is the point where
a customer chooses a conveyancer through
the ULS platform. This provides a strong
indication of future revenues. Instructions
typically take three or four months to complete
with around 70% reaching completion.
Overview Strategic ReportGovernanceFinancial Statements 04
ULS Technology Annual Report & Accounts 2020
A better home moving experience for
Solicitors
Our work with solicitors and licensed conveyancers remains at the heart of what we
do and this year we have steadily migrated our panels onto the DigitalMove platform.
Conveyancers continue to
compete on service, location
and price, with the benefits of an
improved customer experience
and increases in efficiency,
security and communication
that DigitalMove brings.
These benefits are multiplied for
conveyancers who are integrating
with our systems and deeper
integration is a key objective for the
year ahead, allowing conveyancers
access to new technology-
driven products, such as Rapid
Remortgage.
We hosted the first annual ULS
Conveyancer Conference in
May 2019. This was extremely
successful and has provided
a springboard to progressively
more constructive relationships
with conveyancing firms. We hold
regular virtual round table meetings
for conveyancers to discuss
market developments, share best
practice and prepare for increasing
digitalisation and automation in the
housing market.
These discussions have fuelled
initiatives to provide searches
and other products for non-
introduced cases, develop new
conveyancing products, guide
DigitalMove development and offer
applications, such as electronic ID,
to a community that is increasingly
turning to remote and electronic
solutions.
92%
Average Quality Rating
For all cases completed on our
eConveyancer platform, we ask both the
consumer and the introducer to provide
feedback and marks on the service
received from the solicitor. We convert
this in to a percentage. Figure shown
was average rating in March 2020.
DigitalMove allows us to communicate in a safe
environment with customers, brokers and lenders and
for us this has seen a reduction in time spent on the
overall conveyancing process. It is testament to the hard
work of the team that they have managed to deliver
such a concept.”
Fiaz Khalid -LPL
05
Strategic report
06 Chairman’s statement
08 Our business model
10 Our market
14 Our strategy
18 Chief Executive’s statement
20 Financial review
22 Risk management
24 Section 172 (1) statement and
stakeholder engagement
26 Corporate social responsibility
Overview Strategic ReportGovernanceFinancial Statements 06
Chairman’s statement
We are delighted
with the progress
of DigitalMove
with over 10,000
instructions
having now
gone into it.
Martin Rowland
Chairman
Highlights
£6.0m
EBITDA (underlying)
EBITDA (underlying) excludes exceptional items.
£4.0m
Profit before tax
IFRS measure of profit which is after exceptional costs.
It has been a turbulent year with
Brexit dominating for large parts of
the year, a change in Prime Minister,
a general election and finishing
with the start of a pandemic.”
Martin Rowland
£28.3m
Revenue
Revenue is generated principally from the completion
of conveyancing cases and also the associated sales
of searches and ID checks.
ULS Technology Annual Report & Accounts 2020 07
It has been a turbulent year with Brexit
dominating for large parts of the year, a
change in Prime Minister, a general election
and finishing with the start of a pandemic.
Much of this has created uncertainty in the
housing market but we have continued to
generate cash, grow the number of advisers
using our platforms and develop innovative
products such as DigitalMove.
Review of the year
Gross margin was broadly in line with the
prior year as was reported profit before
tax. We have continued to invest in the
development of the business and this
meant an increase in overheads but this
was offset by lower exceptional costs
resulting in operating profit that was broadly
in line with the previous year.
We entered the year having lost a two high
volume but low margin pieces of work and
this has been offset by a wider range of
lower volume work with better quality of
earnings. This meant that although revenue
fell the gross margin percentage increased
largely offsetting each other.
During the year, we announced that we
had not retained a significant contract with
a direct to consumer introducer. While we
were disappointed to lose this contract
where we believed that we were providing
an excellent proposition we have noticed
an increase in instructions coming through
other direct to consumer introducers that
we work with since the loss of that contract.
It also means that outside of Lloyds Banking
group, we have a balanced portfolio
of introducers, and do not have
concentration concerns.
As we started the year we had recently
launched the pilot of DigitalMove. Since
then we have added many new features,
had over 10,000 instructions started to be
processed through it for a mixture of sale,
purchase and remortgage work and had
extensive positive feedback. DigitalMove
transforms the way that the consumer
interacts with the solicitor by providing
an easy to use digital, secure portal,
allowing all forms and communication to
be processed digitally. So far it has only
been available for customers choosing their
solicitor through eConveyancer. However,
we are shortly due to launch our Solicitor
Portal which will allow solicitors to use
DigitalMove wherever the work originates.
DigitalMove has been designed to transform
the home moving and remortgage process,
particularly relevant at a time when more
people want to work and interact remotely.
We also continued to develop our lender
proposition during the year and have
continued to attract new introducers. Most
notable was Principality Building Society
who initially went live with our Fees Assist
offering and are due to go live with our
panel management offering shortly. At the
year-end we were also in the process of
onboarding two more lenders.
In December, we announced that we
planned to increase spend to accelerate
the development and roll-out of
DigitalMove while ensuring we remained
fully resourced to grow and develop
our core conveyancing comparison
proposition. We have commenced with
this planned spend increase recruiting
a number of additional staff members
including building the sales team for
DigitalMove who are already growing the
sales pipeline. However, we have paused
further headcount increases until the
economic outlook is more certain.
Final dividend
Due to the current COVID-19 situation, the
Board has decided not to propose a final
dividend. This is in order to preserve cash
in order to give the Group as much room
to manoeuvre as possible in uncertain
circumstances.
Board changes
Geoff Wicks stepped down as Chairman
in February this year when I became
Chairman. Geoff joined the Board as Non-
Executive Director when the Group floated
in 2014 before becoming Chairman in 2017.
I would like to thank Geoff for the support
and guidance he has given to the Group.
His extensive knowledge and experience
was highly valued by the Board.
Oliver Scott joined the Board in January
this year as Non-Executive Director. As a
partner at our largest shareholder Kestrel
Partners, Oliver brings a new perspective to
the Board as well as a wealth of experience.
I believe that this diversity of view is
important and Oliver is a valuable addition.
Outlook
It is difficult to talk about the outlook for
the business without obviously mentioning
COVID-19. As we went into lockdown there
was around a 90% fall in transactional
conveyancing instructions although
remortgage instructions held up a lot better.
Meanwhile completions fell to a lesser
extent as a surprising number of people
who had already reached the instruction
point found ways to still complete their
house sale or purchase. The housing
market has been one of the first to come
out of lockdown and instructions and
volumes are already starting to recover
towards pre-lockdown levels. It will remain
an uncertain market for many months to
come and it will take some time for volumes
to sustainably return to pre-COVID levels
but the recovery in volumes post the easing
of the lockdown for the housing market has
been better than anticipated.
We are delighted with the progress of
DigitalMove with over 10,000 instructions
having gone into the platform. Our Solicitor
Portal will launch this year and will enable
solicitors beyond those on our comparison
platforms to use DigitalMove, giving the
Group access to a substantial new source
of conveyancing transactions and creating,
what we expect to be, a significant new
revenue stream.
We have also worked hard to develop
and grow our sales teams and continually
improve the products they have to sell;
this has generated material growth in the
number of advisers using our platforms
to provide conveyancing choice to their
customers. We have continued to keep the
sales teams working during the lockdown
to provide a full business as usual service
so that we come through this period as a
stronger business.
Martin Rowland
Chairman
ULS Technology plc
23 June 2020
Find out more about a financial performance
in the Financial Review on pages 20 and 21
Overview Strategic ReportGovernanceFinancial Statements
08
Our business model
We bring consumers and legal
professionals together via housing
market comparison services,
delivered through our systems.
We partner with solicitors and conveyancing firms to create panels that
compete for consumers’ business on price, location and service rating.
Buying
Home
Selling
Home
Buy & Sell
Remortgage
Residential
Buy to Let
Commercial
Equity
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ULS Technology Annual Report & Accounts 2020
09
How we create value for stakeholders
ULS has created an ecosystem where there are benefits for all parties involved.
This is why the system is successful and allowed it to be sustainable over many years.
Benefits for
Consumers
Benefits for
Introducers
Benefits for
Solicitors
Cost Saving
ULS aims to reduce the cost of
services to users by creating price
competition between providers.
Scope
ULS enables intermediaries to
offer their customers a range of
conveyancing services from a wide
choice of providers nationwide at
competitive prices.
Volume
ULS connects service providers
with a large pool of potential clients
via intermediaries, increasing work
flow at a low cost of acquisition.
Choice
ULS increases the choice of
services available to users by
aggregating a broad range of
providers via a single platform.
Service
ULS provides ratings on its
providers helping the consumers
to make an informed choice.
Reward
ULS allows intermediaries to
access multiple related services
from a single interface, helping
them to generate multiple sales
from their customer in one sitting
and to increase profitability.
Time saving
ULS’ user-friendly interface is
designed to reduce the time taken
to complete the sales process,
further enhancing broker ROI.
Market Reach
ULS provides a platform for
service providers such as lawyers
with low brand recognition to raise
their profile, helping them attract
new business.
Overview Strategic ReportGovernanceFinancial Statements 10
Our market
We are focussing on using technology
to deliver a better mortgage
experience for buyers and sellers.
There are many changes going on in the housing market and the wider economy which
we discuss below. We believe that by focussing on delivering solutions that work for
consumers, solicitors and introducers the business will be well-positioned to succeed
whatever the market backdrop.
Over our reporting period it has been an
interesting year politically with Brexit to the
forefront which triggered a Conservative
leadership contest followed by a General
Election which in turn triggered a Labour
leadership election. While all these things
influenced housing market sentiment and
confidence it would turn out to be nothing
compared to the global pandemic that hit us
at the start of 2020 and continues to have a
profound influence. So far the UK housing
market is bouncing back amazingly well but
it remains early days.
Looking at a wider timespan, the UK is in the
midst of a long-run, structural change in the
liquidity of housing. The roots of this change
are founded in a mix of economics,
demographics and policy changes. Most
important is the shift to a low rate of inflation
which means households cannot rely on
inflation to reduce the value of their debt in real
terms and quickly build equity. But equally
challenging is an aging population, lender
regulatory affordability tests and a new build
housing programme that is still well short of
the government target of 300,000 per year.
Housing transactions were therefore under
pressure again and held-up remarkably well
considering the uncertainty.
At the end of our trading period;
• The outstanding value of all residential
mortgages loans was £1,509bn at the
3.9% higher than a year earlier.
Bank of England/FCA
• The value of gross mortgage advances
was £65.8bn, 3.8% higher than in 2019
Q1. Bank of England/FCA
• The value of new mortgage
commitments (lending agreed to be
advanced in the coming months) was
6.1% higher than a year earlier, at
£67.6bn. Bank of England/FCA
• The collective value of homes in Great
Britain increased by £124 billion pushing
total housing wealth up to £7.8 trillion by
the end of 2019. Zoopla
• Employment levels continued at their
record highs until March 2020. About
856,500 people signed up for universal
credit and jobseeker’s allowance benefits
in April, driving up the overall UK claimant
count by 69% in a single month.
Office for National Statistics
• Mortgage finance saw many borrowers
moving to longer-term fixed rate loans.
For the trading period an average of
92% of loans were fixed rate products.
Bank of England/FCA
• The share of gross mortgage lending
for buy-to-let purposes (covering house
purchase, remortgage and further
advance) at the end of Q1 2020 was
14.0%, unchanged from 2019 Q1.
Bank of England/FCA
The property market
Who moves, when and how are all evolving as
average tenures continue to lengthen owing to
an ageing population, lack of stock and issues
of affordability for younger buyers who are
dependent on support from the government
or the Bank of Mum and Dad.
• UK average house prices increased
by 2.1% over the year to March 2020,
up from 2.0% in February 2020.
Land Registry
• Average house prices increased over
the year in England to £248,000 (2.2%),
Wales to £162,000 (1.1%), Scotland to
£152,000 (1.5%) and Northern Ireland to
£141,000 (3.8%). Land Registry
Property transactions and forecasts (thousands)
1,493
796
897
879
921
928
1,134
1,202
1,330
1,158
1,207
1,190
1,178
?
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
ULS Technology Annual Report & Accounts 2020 11
Total ULS completions v Total UK market
Cumulative % change from FY14
ULS Purchase Completions
UK Market Sales
80%
70%
60%
50%
40%
30%
20%
10%
0%
2014
2015
2016
2017
2018
2019
2020
House
transactions
Mortgage
lending
• London’s average house prices increased
by 4.7% over the year to March 2020; this
is the largest 12-month growth London
has seen since December 2016. Land
Registry
• 61% of gross advances at the end of Q1
2020 were for house purchase and 20%
of that number were for first-time buyers.
Bank of England/FCA
• Cash buyers account for 29 per cent
of sales in Great Britain according to
the ONS – the proportion of cash sales
has held relatively steady for the last
five years. This group is a mix of cash
investors and homeowners who have
no mortgage. UK Finance
• Existing homeowners are at their lowest
share of housing moves for a decade.
This group tends to under occupy
homes which limits the drive to trade
up. This group has taken advantage of
lower mortgage rates, through product
transfers or remortgaging. UK Finance
Despite year-on-year increases in the
number of dwellings in the UK, the
number of housing transactions haven’t
grown at the same pace, meaning that
people are moving less often. It is our
belief that it is the cost of moving,
particularly stamp duty that is causing.
However, numbers of first time buyers
remain buoyant helping to maintain
housing transaction numbers.
Interest
rates
House
building
Drivers of
demand
impact our
market
Overview Strategic ReportGovernanceFinancial Statements 12
Our market continued
Mortgage finance
• Mortgage lending supports over 70 per
cent of housing transactions. Gross
mortgage lending has doubled to £268
billion over the last decade, supported
by rising sales and house price growth.
The expansion in gross lending has been
achieved with limited mortgage product
innovation. UK Finance
• Net lending, after repayments, has
recovered strongly from post-global
financial crisis lows of less than £10 billion
per annum, but recent levels of £40–50
billion remain less than half pre-crisis
levels. UK Finance
• As we expected the slew of remortgage
deals sought by home-owners in 2016
did support a first quarter uplift for the
remortgage market as many borrowers
looked to avert a return to Standard
Variable Rates from their two-year fixed
rate period. UK Finance
• The majority of new lending is currently
based on five-year fixed mortgages.
UK Finance
• Product transfers, where a lender
refinances a borrower after the initial
rate have continued to grow. 1.2 million
homeowners switched mortgage product
with their existing provider during
2019 (1.4 per cent more than in 2018).
By value, Q4 2019 product transfers
represented £44.3 billion of mortgage
borrowing. Of these, £25.2 billion was
advised and £19.2 billion was execution-
only. UK Finance
• At the end of Q1 2020 remortgages
accounted for 32% of UK lending.
Bank of England/FCA
• The share of advances to owner
occupiers was 86.0%.
Bank of England/FCA
• The share of mortgages advanced in
2020 Q1 with loan to value (LTV) ratios
exceeding 90% was 5.2%, 0.7pp higher
than a year earlier. Bank of England/FCA
Our aims
ULS Technology’s principal aim remains to
design and deliver technology into the
conveyancing sector that can support and
directly benefit the entire home-moving
value chain. The financial cash-flow benefits
of our market places and services such as
eConveyancer, CAL and DigitalMove to all
the transaction driven businesses in the
property sector, allow us a platform to
provide further products and services to all
who use it whether they be from home-
movers, re-mortgagors, estate agents,
mortgage brokers, valuers, conveyancers
or lenders.
The home-owning value chain
The home-moving value chain has been
adopting technology into its businesses for
some time. But the fragmented nature of the
house-purchase and selling market means
that there is no one solution that has emerged
for all the participants in the value chain.
It is our belief that one reason for this is that
arguably the hardest piece of the puzzle to
solve is the legal piece. It is our USP that this
is our core market as a technology firm.
Conveyancing is the piece that consumers
must undertake and with which other parties
must interact. While property law may not be
reformed for the digital age, we can and have
rewired the process to make sure it is more
efficient for all concerned.
We are focussing on using technology to
deliver a better mortgage experience for
buyers and sellers but that experience is also
better for all the other parties in the value
chain because was we make it more efficient
we deliver an explicit time saving that means
cash-driven businesses get paid quicker.
The initial recovery
from the lockdown
has demonstrated the
resilience of the UK
housing market and the
ongoing desire for people
to buy or move home.”
ULS Technology Annual Report & Accounts 2020
13
People are consuming digital
solutions in all parts of their
life and they expect to be
able to do so when buying or
selling a house. DigitalMove
meets and exceeds these
expectations.”
Overview Strategic ReportGovernanceFinancial Statements 14
Our strategy
ULS has a unique advantage in
its combination of significant
market share and proven track
record of delivering innovative
technology in the field.
Our experience in the residential property and home-moving industries means we
can leverage our position in the conveyancing market to the benefit of the entire value
chain. We have consistently designed, built and acquired technology solutions that
simultaneously deliver innovation while assiduously continuing to improve our existing
portfolio of platform services.
Bringing new opportunities to everyone
At the time of writing, the UK housing economy remains
significantly impacted by the Coronavirus pandemic albeit on an
upward trajectory. We believe that among the many consequences
of this event will be an acceleration of the uptake of digital services.
Our collective behaviour and willingness to meet, interact and
purchase face-to-face will evolve both through the increasing
availability of digital solutions and through enforced behaviour.
Technology and public health risk are driving the way we all live
and work and will exacerbate our take-up of digital services
and experiences.
Growth in
advisers using
platform
18%
DigitalMove
cases
10,000+
DigitalMove gives the
opportunity for growth
beyond our current
core offerings.”
Purchase
transactions
market share
3%
ULS Technology Annual Report & Accounts 2020 15
This trend was already underway owing
in part to the natural evolution, growth
and availability of digital services but also
because of other pressures to change
behaviour. Climate Change prompted the
Prudential Regulatory Authority in 2017
to ask all financial institutions how they
were intending to respond to the risks and
challenges it brings and what impacts and
actions they are planning to undertake
to mitigate these. Firms across the value
chain have been quick to understand that
technology plays a huge role in reducing
the UK’s collective carbon footprint –
something the government has explicitly
stated must be neutral by 2030. In
housing, we believe policy makers will want
developers to look again at carbon neutral
housing and estate agents are looking
to recalibrate their high-street models.
Mortgage brokers are already moving
increasingly on-line and will need to do
so more quickly in future and lenders will
know they need to minimise not only their
carbon footprint but also that of suppliers.
However, supply side pressures to change
in themselves are not enough to encourage
market adoption of our solutions. Our
solutions must address other very demand
led issues. We have done this, for example,
by delivering improved cash-flow and
improved security to those using our
DigitalMove platform. Since the launch of
DigitalMove last year we have conducted
over 10,000 cases on the platform shaving
as much as 20% off the time it takes to
complete a purchase and sale. This has
very tangible affects clearly on the cash-
flows in the house-buying value chain. This
demand-side benefit is now a central selling
point of our platform and, in cash-stricken
times, this resonates with estate agents,
brokers, valuers and conveyancers alike.
But doing things more quickly cannot
compromise quality or security. We
know conveyancing firms are concerned
about fraud not least because so much
of their business is conducted by email.
DigitalMove addresses not only the ‘digital’
high-tech low touch approach now in
demand from consumers and policy makers
but it addresses these security concerns
through features such as its industry leading
electronic ID system.
Our solutions are built to address all the
touch-points in the value chain and address
both demand and supply-side pressures
and use our current distribution through
CAL and eConveyancer and additional
reach through DigitalMove to support our
own evolution in this space.
Bringing new opportunities to
more conveyancing firms
Our long-standing contractual relationships
with solicitors on our established
conveyancing comparison platforms
means firms are already able to provide
quotes, be instructed, process and be
monitored for their work. This happens at
a fixed and known cost that enables them
to plan and scale their operations. But our
recent innovations through DigitalMove
will provide quicker transactions, more
security and more efficient workflow to a
growing number of firms not on our current
platforms. This means incremental growth
for our business outside of our current
core offerings.
Bringing new opportunities to the
value chain
ULS acquires conveyancing from mortgage
intermediaries, mortgage lenders, estate
agents, and directly via consumer online
portals. All of these businesses, with
perhaps the exception of mortgage lenders
are very cash driven. Transactions are
frequently one-off. The current temporary
market abeyance means firms’ minds will
be very focussed on which technology
delivers quick financial benefit, is proven,
easy to embed into their business and
offers a better experience for their
consumers. We are acutely aware that
our business has to deliver benefits to
businesses and to consumers and we will
continue to design and deliver solutions
to that standard. DigitalMove promises
to deliver efficiencies to solicitors while
increasing customer satisfaction.
From design to delivery- DigitalMove
DigitalMove launched in January 2019
and has already exceeded 10,000 cases.
Funded from cash-flow, our innovative
platform securely improves communication
and crucially the speed of transactions,
eliminating along the way bad cost by
reducing cancellations and aborted cases
and rekeying.
Most gratifying is the increased speed of
completion. A possible 20% saving from
instruction to completion means that not
only is DigitalMove delivering on its promise
to consumers to make the home-moving
experience better but it is also bringing
faster transactions that have a real cash-
flow benefit for businesses. There are
reported benefits around the edges too
with many firms telling us that they are
benefitting from reduced ‘chase’ calls.
We know property fraud is an issue in the
conveyancing process but our platform has
proven exceptionally robust to date and our
lenders, panel managers, conveyancers,
intermediaries, valuers and estate agents
have secure access to the same correct,
accurate information concurrently.
Consistent reporting, improved data
analysis, as well as accurate monitoring
of trends and performance mean we have
delivered to market a platform from which
to springboard other products and services
to the value chain.
Crucially however, DigitalMove is not
just a platform for our panel of current
conveyancing firms. We are currently
engaging with conveyancing firms that
operate outside our current conveyancing
platforms – delivering benefits to an even
bigger market and increasing our potential
revenues from their activity.
Our experience with DigitalMove over the
last year has shown that estate agents
and mortgage intermediaries can engage
more quickly with buyers and sellers.
Instructions and initial reports are now
delivered in minutes not days and its case
tracking / sales progression features are
giving consumers comfort earlier that
things are happening and businesses
certainty that transactions are moving.
Together with our existing conveyancing
comparison platforms, it gives us a
compelling proposition for the coming years
as the market and value chain as a whole
increasingly embraces digitalisation.
Acquiring the right businesses
at the right time
Currently ULS is focussed on growing
its distribution in its core conveyancing
comparison market developing new
products such as Rapid Remo and the
continued development and distribution
of DigitalMove. However, the Group will
continue to look to make complementary
acquisitions of businesses in sectors that
we understand and that complement what
we offer should opportunities arise. Our
acquisition strategy is about buying the right
business at the right time for the right reason.
Overview Strategic ReportGovernanceFinancial Statements ULS Technology Annual Report & Accounts 2020
16
What is DigitalMove?
DigitalMove is our innovative new digital conveyancing
platform, which enables all stakeholders in the
homemoving or refinancing journeys to communicate
and collaborate more effectively.
At the beginning of the DigitalMove project, we set out
five core aims, which are:
• To provide an exceptional customer experience
• To minimise fraud
• To reduce mistakes
• To improve communication
• To reduce the time it takes to move house/remortgage
DigitalMove launched as a pilot in January 2019 and
has since managed more than 10,000 Sale, Purchase
and Remortgage cases, with work being distributed to
more than 60 of the UK’s leading conveyancing firms.
Since pilot, DigitalMove has received regular updates to
improve the experience for consumers and solicitors.
As a result of our agile development approach,
DigitalMove has been able to improve and adapt to
new requirements, enabling us to deliver increasingly
impressive results when compared against equivalent
non-digital cases.
Benefitting Consumers
Homemovers and refinancers using DigitalMove have
access to a library of pre-built forms and tasks which
they can quickly and easily progress through on their
smartphone, tablet and desktop devices. DigitalMove
also provides a secure, direct communication channel
with the solicitor, removing the need for vulnerable
email communications and minimising fraud.
With the system available 24 hours a day, 7 days a
week, DigitalMove is also offering greater flexibility than
traditional conveyancing, with consumers able to view
and work on their case from the comfort of their own
home, at their own convenience.
Consumers have shared with us some overwhelmingly
positive feedback over the last 12 months and we are
delighted with the impact that the product is having on
home movers across the country.
Benefitting Solicitors
As a provider of successful conveyancing comparison
solutions, we have an extremely strong understanding
of what conveyancers need. In building DigitalMove,
we have used this understanding to design a process
which delivers information from the consumer to the
solicitor which is accurate, complete and provided
quickly. This is reducing the amount of work the
solicitor is having to do chasing information and
checking that everything is complete. It is also reducing
queries from the customer. This all adds up to a more
efficient process for the solicitor.
Benefitting Brokers
DigitalMove was made available for all brokers
using eConveyancer, either directly or via one of our
Introducers, at the end of 2019. In the intervening
period we have achieved substantial time savings,
with the average transaction completing up to 20%
more quickly when DigitalMove is utilised. Quicker
transactions that means that, for mortgage brokers,
they are getting mortgage procuration fees more
quickly. Quicker transactions also opens up the
possibility of higher rates of completion which means
not just introducers receiving their fees more quickly
but receiving more in total.
We now find that DigitalMove cases account for
more than 50% of all cases through eConveyancer,
an incredible rate of penetration for an entirely new
platform and a demonstration of the value brokers see
in the offering.
What next?
Having put over 10,000 eConveyancer instructions
through DigitalMove the next step is to enable solicitors to
put all their instructions through DigitalMove, not just the
ones that come through eConveyancer. We also want all
solicitors who do conveyancing to use DigitalMove not just
those on the eConveyancer panel. This opens up a whole
new revenue stream for the Group.
So the next steps are:
Launch solicitor portal in first half of the year
• This will allow any solicitor to use
Integrate digital ID
• Providing a secure proof of ID suitable for a digital
environment
Integrate ordering of search packs in to DigitalMove
• This will allow the consumer to self-serve rather than
waiting for the solicitor to order increasing efficiency
and, crucially, providing the key revenue stream
for DigitalMove
For more information www.ulstechnology.com/digitalmove/
17
Key achievements in the year
2.5
days
13
days
21
minutes
The average time savings on
Client Care Packs being sent
The average time savings on
Client Care Packs being returned
Our record time for a Client
Care Pack turnaround
1-2
weeks
8
days
The average time saving on
Purchases cases to Exchange
The average time saving on
a Remortgage Completion
Overview Strategic ReportGovernanceFinancial Statements 18
Chief Executive’s statement
The 18% growth
in the number
of mortgage
advisers using
our conveyancing
comparison
platforms has
been particularly
pleasing.
Conveyancing Completions
2020
2019
2018
2017
72,445
83,364
83,756
56,789
2016
53,830
Conveyancing Instructions
2020
2019
2018
2017
2016
106,051
117,731
123,847
89,208
74,657
72,445 (2020)
Conveyancing completions
106,051 (2020)
Conveyancing instructions
Steve Goodall
Chief Executive
Officer
Our technology is aligned with
society’s demand for greener remote
digital solutions and the results of the
roll out to date of DigitalMove have
been impressive.”
ULS Technology Annual Report & Accounts 2020 19
With Brexit, a Conservative leadership
contest, a second General Election in two
years, a Labour leadership battle and the
start of a pandemic it was a busy year with
plenty going on politically to sway house
market sentiment and confidence.
Evolving political, economic, social and
technology trends continue to support and
challenge our business in equal measure.
An ageing population and too little housing
stock affect the liquidity in the housing
market but support house prices. Historic
low interest rates, questions of affordability,
and government support for sectors
such as New Build and First-time buyers
all contribute to shape the market within
which we operate. But our technology is
aligned with society’s demand for greener
remote digital solutions and the results
of the roll out to date of DigitalMove have
been impressive.
ULS has performed well in this context and
I am pleased to say has the right portfolio
of offerings to make the most of our
market leading share of the conveyancing
comparison market. We will continue to
look to invest and grow in our core market
while using this to springboard our Digital
services and other products into other parts
of the value chain.
A business in transition
Last year we launched DigitalMove into the
market. Funded entirely from existing cash
flows, DigitalMove has already delivered
over 10,000 cases shaving as much as
20% off the time it takes to complete a
purchase and sale. The ramifications of
this for the entire industry are profound.
Quicker transactions mean quicker
payments and happier home-movers. The
lack of uncertainty about the progress of
transactions in addition to the security of
the platform means everyone can know
when a task or activity has been completed.
Our intention is to roll-out the delivery
across the value chain and into additional
conveyancing firms that are not currently
part of our platforms thereby securing
additional transactions for the Group. We
had always believed DigitalMove offered
a digital conveyancing solution that is
unrivalled in the market and the evidence to
date has shown that this is exactly the case.
While DigitalMove presents a
proposition for the entire value chain,
our conveyancing comparison platforms
provide complementary propositions
for the conveyancing market that are a
crucial part of the current support for our
developing business. We recognise this
and part of managing this transition is that
the right people have to be in the right
positions. We appointed a new Head of
Sales for DigitalMove and I am delighted to
say Mark Snape, Managing Director of our
subsidiary CAL, has also taken on the role
of Group Conveyancing Director. This new
structure means that our push of products
and services to the many sectors in which
we operate is controlled and technology
resources effectively deployed to support
the right development for the business.
Going forward
The political certainty provided by last
December’s general election boosted
housing market confidence during January
and February. A sharp uptick in sales was
seen across the UK, with even the prime
central London market seeing prices climb
for the first time in five years. These positive
trends were expected to have continued
through 2020. The arrival of COVID-19
put this recovery on hold although we are
already seeing a quick recovery.
Our view at the beginning of 2020 was that
the volume of UK residential transactions
for 2020-21 would be around 5% higher
than the five-year average - around 1.26
million compared with the 1.18 million seen
in 2019-20 but the lockdown will obviously
have a dramatic impact. Sales will continue
to recover in the second half of the year
and I believe will total around 735,000 for
the full year, around a 38% decline from
the level seen in 2019-20. We do expect
the revival in activity to continue, with
volumes in the following year expected to
be above the level seen in 2020-21 but this
expansion may not fully offset the drop in
2020-21 as the economy and the housing
market takes a while to recover from the
shock of the pandemic. The pandemic
has accelerated a push to digital solutions
that has substantiated our view that to
outperform our competitors we cannot rely
on the market alone to deliver the business,
we need to shape it ourselves.
The pandemic has shown the wisdom
of building remote digital solutions for
conveyancing and house-buying in general.
We are building a business that uses its
technology expertise to support and unite
an entire value chain that in turn helps
consumers. We cannot be ambivalent to
the market dynamics in which we operate
but we can forge our own destiny within it.
We grow through innovation and leveraging
our market share to deliver technology,
products and services that offer more value
to the entire home-moving value chain and
more income to ULS.
Steve Goodall
Chief Executive Officer
ULS Technology plc
23 June 2020
Overview Strategic ReportGovernanceFinancial Statements
20
Financial review
The Group
improved its
gross margin
% through an
improved mix
of work.
Summary
• Revenue £28.3 million (2019: £30.0 million).
• Gross margin £12.4 million (2019: £12.5 million).
• Underlying PBT £4.8 million (2019: £5.4 million).
• Reported PBT £4.0 million (2019: £4.1 million).
• Net debt £3.4 million (2019: £3.0 million).
• Final payment of deferred consideration made during the year.
Results
Profit before tax for the year was broadly in line with that of the prior
year. There was a reduction in exceptional costs for the year but
this was offset by a slight drop in gross margin and an increase in
overheads. The increase in overheads was expected as the Board
decided to accelerate the investment in the business particularly
DigitalMove. While revenue fell there was an improvement in the
gross margin % which largely offset the fall. As a Board the key
profitability measure we use is underlying PBT. We believe that this
measure gives a better guide to the longer-term cash generating
ability of the Group and this fell a little for the reasons mentioned.
The housing market was largely challenging during the period and
that obviously remains the case currently.
Capitalisation of internal IT resource
In accordance with accounting rules, we capitalise internal and
external IT resource where there is a clear definable project and we
can identify a profitable revenue stream. The capitalisation is shown
under intangible assets and amortised over the expected useful life of
the asset. However, it is useful to look at the impact on profit if we had
purely expensed all of this type of expenditure and we do this in the
table opposite. This gives a closer indication as to the cash generative
ability of the business rather than looking at reported profit.
John Williams
Chief Financial
Officer
The Group has continued to invest in
business and product development
despite the drop in volumes since
the lockdown.”
ULS Technology Annual Report & Accounts 2020 21
Underlying PBT
Capitalised development resource
2020
£000’s
2019
£000’s
4,805
5,402
(905)
(798)
Amortisation of capitalised development resource
658
536
Adjusted underlying PBT
4,558
5,140
We increased the spend on development resource that we
capitalised during the year. While this spend is on a number of
different projects, the reason for the increase in this spend was
due to DigitalMove as we looked to accelerate the development
of this major product. We expect this figure to continue to grow
in the coming year.
Key performance indicators
Our key performance indicators are set out on pages 1 and 3.
Shares and dividends
In January 2020, the Group paid an interim dividend of 1.25 pence
per share. We do not intend to pay a final dividend due to impact of
COVID-19 on the Group’s profit and the need to preserve cash until
the housing market fully recovers.
43,219 new shares were issued in the year.
Conveyancing Alliance Holdings Limited
On the 19 December 2016, the Group acquired the entire share
capital of Conveyancing Alliance Holdings Limited and its wholly
owned subsidiary, Conveyancing Alliance Limited. This was for
an initial cash consideration of £7.2 million plus its free cash,
together with an earn-out based on performance until 31 March
2019 to be wholly satisfied in cash. The first earn-out payment of
£2,934,000 and was made in July 2018. The final earnout payment
of £2,337,000 was paid in July 2019. There was no change to the
earnout estimates during the reporting period and the adjustment
to expected contingent consideration going through exceptional
operating costs was due to the movement in the net present value
calculation which has now fully unwound.
Cash and debt
The Group continued to generate positive operating cash flow:
• scheduled payments of £1 million made against the term loan
with HSBC;
• RCF balance with HSBC increased by £2 million;
• dividends paid of £1.6 million;
• leverage rose from 0.46 to 0.57 as at 31 March 2020; and
• leverage is calculated as net debt against underlying EBITDA.
The underlying position of the Group is that it continues to turn
a significant proportion of its operating profit into cash, which
normally allows for the payment of a progressive dividend, while still
investing in the growth of the business. The business has taken on
debt facilities to fund acquisitions and we aim to limit leverage to
one times EBITDA which we are currently well below. However, the
COVID-19 scenario means that there is the possibility of exceeding
that self-imposed target temporarily. While the housing market has
started to recover more quickly than initially expected there will still
be a substantial impact on our cashflow over the coming period.
Therefore we have suspended the dividend for the time being and
leverage will rise in the short term.
During the year the Group agreed a £2 million and drew down an
increase in its RCF facility to £4 million on the same terms as the
existing facility with an increase in the term for the enlarged facility
to December 2021.Since the year-end, the Group agreed to a 6
month holiday on repayments on its term loan facility increasing the
term by 6 months to June 2022. It has also agreed since the year
end a £1 million overdraft in addition to its existing facilities and
temporary changes to its banking covenants.
The Group has continued to invest in business and product
development despite the drop in volumes since the lockdown. This
approach combined with measures to manage cash outlined above
along with other cash preservation actions give us the confidence
that the Group will emerge from this situation in a strong position.
Taking in to account some of the items mentioned above, we
undertook a number of forecasts looking at various possible
impacts on the housing market as a result of COVID-19. We then
further stress tested these to look at what it would take to run
out of cash and when bank covenants would be breached. We
negotiated extra facilities and temporary adjustments to the bank
covenants based on this work. Since undertaking this work the
housing market and our pipeline of work has recovered much
more quickly than any of our scenarios predicted leaving us with
significant cash headroom.
Underlying PBT
Profit before taxation (PBT)
Amortisation of intangible
assets arising on acquisition
Exceptional operating costs
Acquisition activity costs
Adjustment to expected
contingent consideration
Impairment of investment
Exceptional operating costs
Underlying PBT
Underlying EBITDA
Underlying PBT
Finance income
Finance costs
Amortisation (excluding
arising on acquisition)
Depreciation
Underlying EBITDA
2020
£000’s
2020
£000’s
4,024
538
2019
£000’s
2019
£000’s
4,110
540
30
113
100
268
484
–
243
4,805
2020
£000’s
4,805
(14)
195
658
324
5,968
752
5,402
2019
£000’s
5,402
(12)
132
536
204
6,262
Impact of IFRS 16
At the start of the year we implemented IFRS16. The Group held
two property leases at the start of the year and acquired another
property lease during the year. It does not hold any other leases.
No adjustment was made to prior year figures.
The impact on profit before tax in year in adopting IFRS16 was
minimal while it increased EBITDA by £123,000. As at the 31 March
2020 there were assets on the balance sheet capitalised under
the standard of £1,501,000 and liabilities of £1,467,000.
John Williams
Chief Financial Officer
23 June 2020
Overview Strategic ReportGovernanceFinancial Statements
22
Risk management
The Group has put in place a risk
management committee which
meets monthly to identify, assess
and manage the risks faced by the
Group and report back to the Board.
The risk management committee owns and manages all risk registers for the Group and
reports back to the Board their findings and the Board will assess to ensure the control
systems in place are effective.
The Board and risk committee
follow the following risk
management cycle:
Risk heat map
The risk management committee have evaluated
the principal risks and uncertainties as follows:
Identify risk
(Opportunities
and threats)
Assess scale
of risk
(Potential
likelihood
and impact)
High
Impact
6
7
3
2
Not
Likely
1
5
4
Likely
Review and
refine process
and repeat the
process
Develop
risk response
strategy
(Transfer, Accept,
Reduce, Avoid)
Implementation
and monitoring
of controls
Implement
strategy
and allocate
responsibilities
Low
Impact
ULS Technology Annual Report & Accounts 2020 23
1
2
3
4
5
6
7
8
Risk Areas
Potential Impact
Mitigation
Loss of key introducer
The contract with Lloyds
Banking Group delivers
significant gross margin.
The loss of this contract would
clearly have a significant impact
on the scale and performance of
the Group although there are a
number of parts to the contract.
The Group is widening its routes to market and gross margin
attributable to this contract is now less than 30% of total gross
margin. Additionally, the Group works closely with Lloyds
Banking Group to ensure it is delivering a high level of service
and constantly enhancing the service being offered.
Loss of key panel firms
The Group operates a
panel of over 100 solicitors
and licensed conveyancer
firms, but the largest
firms receive significant
percentages of the work.
The loss of a major panel firm
could impact on the Group’s
ability to fulfil all the orders it
receives and could reduce
price competition.
The Group builds strong relationships with its panel
of firms thereby enabling it to constantly monitor their
capacity and service levels. The Group actively looks to
recruit new firms onto its panel across a range of sizes
to maintain sufficient capacity within the model and keep
prices at a competitive level, while keeping quality of
service high. The Group takes reputation risk seriously
and any new firms have to pass certain criteria before
they are allowed on the panel.
Macro-economic
conditions
The revenue of the
business is closely
linked with the number
of transactions in the UK
housing market.
New products
The Group continually
looks to innovate and
develop new products.
Competition
There are a number of
competitors of varying
sizes across the market.
Changes in interest rates, house
prices, government policy, GDP
growth and wider economic
factors such as Brexit and
pandemics can positively or
negatively impact the number
of housing transactions.
The Group continues to widen its distribution channels
by increasing the number of introducers as well as the
markets they operate in. This means that the Group is not
solely reliant on growth in the general market for its own
growth. It also aims to maintain cash resources so it can
effectively react and cope with unexpected situations such
as the recent pandemic.
When developing products there
is a risk that products developed
are not commercially successful or
cost more to develop than planned.
The Group plans to continually gather and obtain market
research prior to the launch of any new initiative. It also
conducts post completion audits to enable and promote
continuous improvement.
Where there is competition there
is always a risk that others will
gain a competitive edge and
either make it more difficult to
win new customers and/or to
retain existing customers.
The Group is focused on continual improvement,
innovation, quality and resilience in order to maintain its
competitive advantage and values existing introducers as
much as potential new ones. Additionally while the Group
is one of the largest in the market it still holds a relatively
small percentage market share and there is plenty of
scope for growth. The introduction of DigitalMove also
widens the Group’s offering and takes it in to new markets.
IT systems
The Group is dependent
on its IT systems to be
able to provide its services.
Computer systems are inherently
open to failure or security breaches.
These could impact the ability of
the Group to be able to provide its
service and serious failures could
result in the loss of customers.
The Group ensures that anti-virus software is kept up-
to-date and regular penetration tests are performed. The
main servers are located off-site at dual locations, enabling
immediate failover in the event of a server becoming
unavailable at one of the locations.
Acquisitions
The Group has made
acquisitions and plans to
continue to be acquisitive.
Making acquisitions is inherently
risky. Risks include over paying, not
achieving expected synergies and
impact on the existing business
due to distraction of management.
The general strategy of the Group is to acquire businesses
in sectors it understands, to undertake proper due
diligence, gain a good understanding of the corporate
culture and to resource sufficiently and effectively.
Acquisitions made to date have maintained or exceeded
value paid for them.
Regulatory Changes
The Group makes nearly
all its margin from what
some may call referral fees
and search fees.
If either of these were prohibited
the Group would need to look to
look to reconfigure its revenue
model towards licence fees or
another model.
While, in the past, referral fees in the conveyancing market
have been looked at by government they have stepped
back from taking action as they have done in the personal
accident claims arena. This may be because they can see that
comparison platforms such as ours actually drive down prices.
Overview Strategic ReportGovernanceFinancial Statements 24
Section 172 (1) statement and stakeholder engagement
Section 172 (1) statement
The Board is fully focussed on the long-term success of the business in a way that benefits all stakeholders. For a business to be
able to build and grow a sustainable business it is vital that all stakeholders are considered. Reputation is hard won and easily lost. All
businesses will face some bumps in the road along their journey. If you treat your stakeholders with integrity then they will stay with you
through those bumps. This has been particularly true during the current COVID-19 situation and by keeping to this philosophy the Group
aims to come out of this as a stronger business.
Section 172 matters
a) The likely consequences
of any decision in the
long term
As mentioned above, the Board is fully focused on the long-term success of the business and, as
such, views all decisions it makes through that prism. In December the Group announced that it
planned to increase its investment in product development impacting short-term profitability.
Additionally, during the current COVID-19 situation the group has continued to invest strongly in
both its product development strategy as well as business development focussing on the long-term
benefits this will bring.
b) The interest of the
company’s employees
Our employees are our most important asset and it is their dedication and inspiration that makes us
what we are. The Board seeks to create an environment where employees feel valued and are able
to perform to their best.
During the period, the Group invested in new premises to enhance the working environment, to
cater for the increase in employee numbers and for future growth.
During the current COVID-19 situation, while we have been able to transition easily to home-working
it has still been a difficult and stressful period for many. The Board have tried to support employees
with clear and considered decision making and communication taking in to account individual
needs. All employees have access to the Employee Assistance Programme which gives access
to a 24 hour confidential helpline which has been particularly useful in the current environment.
c) The need to foster the
company‘s business
relationships with
suppliers, customers
and others
The business model described on pages 8 and 9 relies on building a base of introducers who want
to use our products and are happy to continue to recommend them to their customers. In addition
we are reliant on our panel of solicitors continuing to provide an excellent service at competitive
prices and with enough capacity to meet demand. With the advent of DigitalMove we now also want
solicitors to choose to use DigitalMove to interact with the customers. Therefore these relationships
are key and the Board recognise them as such and they are central to all decision making.
d) The impact of the
company’s operations
on the community and
environment
e) The desirability of the
company maintaining
a reputation for high
standards of business
conduct
The basic premise of the business model is to make the conveyancing process more efficient and
the vast majority of transactions that take place through our systems are done remotely between
the solicitor and the consumer eliminating the need to travel. DigitalMove is taking this a step further.
Our business model is wholly dependent upon maintaining a reputation for high standards.
See c) above.
f) The need to act fairly
between members of
the company
The Board is always aware that it has to balance the various needs of different stakeholders.
In the main the business model means that actions and activities that the group takes are
mutually beneficial.
Recently Oliver Scott who is a Partner at Kestrel, the company’s largest shareholder, was appointed
to the Board. It remains prominent in the thoughts of the Board to act fairly between shareholder
and the Board will continue to communicate widely with shareholders as outlined in the next table.
ULS Technology Annual Report & Accounts 2020 25
Stakeholder Engagement
Further to the section 172 (1) statement, the table below looks at how the Group engages
with its key stakeholders.
Stakeholder
Description
Types of engagement
Shareholder
The Company has a range
of shareholders from large
institutions through to private
individuals who may be
described as retail investors.
The Board seeks to engage with shareholders in a number of ways. This includes
but is not limited to regulatory announcements, the Annual Report, our website
and presentations. The Board also engages with investor publications to enhance
its ability to communicate with retail investors as well as institutional ones.
Employees
The Group has just over
100 employees located in
Thame and Woking with,
additionally, some home-
based employees.
The Board, particularly the Executive Directors are in daily contact with
employees across the organisation and operate an open and informal culture.
In additional there are more formal communication procedures such as twice
yearly ‘town hall’ meetings and the employee survey.
Solicitors
See pages 4 and 5.
Consumers
See pages 28 and 29.
Introducers
See pages 45 and 45.
FOR
SALE
Communities
The Group maintains a wide dialogue with solicitors across the organisation.
In particular we have a team whose day to day responsibility it is to liaise with
the solicitor firms but the interaction goes across the business.
During the financial reporting period we held our first conference for the solicitors
on our panel. This was a great success and one which we plan to repeat.
In general consumers are delivered to the platforms through the group’s wide
network of introducers. However the consumers engage directly with the
platforms and have access to the 7 day a week UK based helpdesk.
With DigitalMove, the engagement with consumers is further enhanced as they
are engaged with the software throughout the conveyancing journey with access
to the helpdesk via a variety of engagement tools throughout.
The Group has a wide range of introducers and has field and office based teams
fully focussed on communicating with them. The Group uses a wide variety
of communication methods and is continually looking for feedback in order to
further enhance its products and services.
This grouping encompasses
a number of different
elements including the
communities in which our
offices are based as well as
the environment which has
more global impact.
Employees are encouraged to take part in charitable activities often within their
local communities and for causes with which they have a personal connection.
See pages 26 and 27 for further details. Additionally the business has a close
connection with the Thame Community Centre and often supports its activities.
Overview Strategic ReportGovernanceFinancial Statements 26
Corporate social responsibility
ULS Technology is committed to supporting the local
economy, environment and wider community of the
workforce. Over the last 12 months, the company has
led a series of initiatives and delivered engagement
activities as part of this commitment.
Charitable Activities
All our employees are entitled to a paid
Volunteering Day each year, where staff
are encouraged to support causes which
are close to their hearts or that play an
important role in their communities. This
year, ULS Technology staff have used this
opportunity to support causes including
The Christie Charity, The Penny Appeal
and The Chilterns MS Centre.
For any charitable activities that staff
undertake, the company also operates a
contribution matching scheme, whereby
ULS Technology will donate the same
amount to charity as has been raised
by the employee.
Educational Institute Engagement
A large proportion of our workforce live
locally and have links with education
institutes in the area, with many employees
attending local schools prior to joining ULS
Technology.
In 2019, a team from across the company
attended the Lord Williams School careers
day to give insights to students seeking
careers advice and the company had
scheduled work placements for students
before the COVID-19 pandemic hit.
Shortly before the end of the Financial
Year, ULS Technology also agreed to
sponsor a sports kit for Lord Williams
school, generating revenue to support
student activities.
Environmental Activities
ULS Technology encourages all staff to
work digitally and minimise the amount
of paper and ink used in reproduction
materials within the office buildings.
Our DigitalMove product is also helping
reduce the amount of paperwork being
utilised by Solicitors and Homemovers, as
well as reducing the need for Homemovers
to travel to Solicitor offices for meetings,
which reduces vehicle emissions.
I am raising money for the
Chilterns MS Centre. I visit the
centre weekly to have oxygen
therapy which enables me to live
life with MS. I want to be able to
raise as much money as I can as a
thank you for all their hard work
and continued support.”
Jane Matthews
Finance Manager (Accounts)
My wife Faye is completing 9 events
in honour of her mum who we lost
in January this year following her
9 year cancer battle – I’ll be joining
her on some of the events to help
build awareness and raise more
money for The Christie Charity.”
Matt Brown
National Account Manager (Sales)
ULS Technology Annual Report & Accounts 2020
27
Our mission is to make home moving and financing
as smooth and safe as possible for consumers
and, this year, we have taken a big step in that
direction by rolling out DigitalMove across our
platforms and services.
Consumers
Through DigitalMove, you can view and progress your conveyancing
journey wherever you are and whenever you want to: right there in the palm
of your hand! DigitalMove guides you through every step of the way and
the steady release of new features, such as our treatment of Fixtures and
Fittings and Source of Funds, is progressively making the process easier
and more transparent.
The immediate evidence of the impact of DigitalMove for consumers is that
transactions are faster than equivalent non-DigitalMove cases, from the time
it takes to complete the initial forms all the way through to completion. In
addition, consumers value how DigitalMove allows them to get to a position
of certainty weeks faster than they would do otherwise. Knowing that the
legal side of your house move or remortgage is in place and that you can
concentrate on the plethora of other things to do is enormously powerful and
we have focussed on this aspect with the rapid remortgage product. This
is the first of our customer-driven ‘plus’ products and services, which will
showcase just what DigitalMove can achieve when integrated with cutting
edge introducers or service providers.
We, of course, continue to offer consumers the widest choice of high-quality
solicitors and licensed conveyancers in the country at a competitive price and
with a no completion, no fee guarantee. All panel firms are regulated by either
the Solicitors Regulation Authority or the Council for Licensed Conveyancers
and are continuously monitored by our solicitor liaison team, supported by
proprietary automated processes.
14%
reduction in time
to exchange for those
using DigitalMove
Great platform.
Very efficient.”
Amardeep
As a tool DigitalMove
is excellent and I
would recommend it.”
Louise
Overview Strategic ReportGovernanceFinancial Statements 28
ULS Technology Annual Report & Accounts 2020
A better home moving experience for
Consumers
Our mission is to make home moving and financing as smooth and safe as possible for consumers
and, this year, we have taken a big step in that direction by rolling out DigitalMove across our
platforms and services.
Through DigitalMove, you
can view and progress your
conveyancing journey wherever
you are and whenever you want
to: right there in the palm of your
hand! DigitalMove guides you
through every step of the way
and the steady release of new
features, such as our treatment
of Fixtures and Fittings and
Source of Funds, is progressively
making the process easier and
more transparent.
The immediate evidence of
the impact of DigitalMove for
consumers is that transactions
are faster than equivalent non-
DigitalMove cases, from the time
it takes to complete the initial forms
all the way through to completion.
In addition, consumers value how
DigitalMove allows them to get to
a position of certainty weeks faster
than they would do otherwise.
Knowing that the legal side of your
house move or remortgage is in
place and that you can concentrate
on the plethora of other things
to do is enormously powerful
and we have focussed on this
aspect with the rapid remortgage
product. This is the first of our
customer-driven ‘plus’ products
and services, which will showcase
just what DigitalMove can achieve
when integrated with cutting edge
introducers or service providers.
We, of course, continue to offer
consumers the widest choice of
high-quality solicitors and licensed
conveyancers in the country at a
competitive price and with a no
completion, no fee guarantee.
All panel firms are regulated by
either the Solicitors Regulation
Authority or the Council for
Licensed Conveyancers and are
continuously monitored by our
solicitor liaison team, supported by
proprietary automated processes.
14%
Reduction in time
to exchange for those using DigitalMove
Excellent website to
check what stage the
conveyancing was up
to. Would definitely
recommend in the future.”
Adam
29
This was my first
experience of using
eConveyancer and it
was a good one. Very
efficient and they were
extremely helpful too.”
Paul
Governance
30 Board of Directors
32
Chairman’s introduction
to governance
34 Corporate governance statement
36 Directors’ report
39 Independent auditor’s report
Overview Strategic ReportGovernanceFinancial Statements 30
Board of Directors
Martin Rowland
Chairman
Appointed
Steve Goodall
John Williams
Chief Executive Officer
Chief Financial Officer
Martin joined as Non-Executive Director
in November 2018 before becoming
Chairman in February 2020. He was
previously a Non-Executive Director of
the Group between 2011 and 2014.
Steve joined the Company as Managing
Director in May 2017 before becoming
CEO in April 2018.
John joined the business in January
2011 at the point of Lloyds Development
Capital (LDC) investment in the Group
and oversaw the listing process in 2014.
Background and Experience
Martin has spent the last 10 years in a
variety of investment roles, working for
institutional private equity houses and
investing alongside family offices. Prior to
this Martin held operational and strategic
roles in mid-sized and large corporates.
He has been a Director of companies in
an executive and Non-Executive capacity,
helping businesses to scale organically
and through acquisition. Martin is a
qualified accountant.
Steve has been instrumental in building
the Company’s success in tailoring
conveyancing services and technology
for lenders as well as introducing and
commercialising new products and
services for existing and new B2B
relationships.
Prior to joining the Company, John was
Finance Director at Stortext FM Limited,
a private equity backed SaaS business
specialising in document management.
There, he led a merger process before
taking the lead in a successful trade sale
of the merged entity to Box-it Limited.
John is a chartered accountant, having
qualified with Ernst & Young, before
he gained blue-chip experience with
Motorola in a number of roles.
Prior to joining ULS, Steve worked for
Legal & General Surveying Services
(‘LGSS’) for over 15 years, most recently
holding the post of Managing Director.
During his tenure, he successfully
transformed LGSS from a modest
surveying business into the number
one, market leading property risk and
valuation distribution business, which
in 2016 handled over 500,000 valuation
instructions and generated revenue of
approximately £80 million.
Steve was awarded the Royal Institute of
Chartered Surveyors’ Fellowship in 2012
and also holds numerous high-profile
industry awards, both personally and on
behalf of LGSS.
Committee Memberships
Remuneration Committee
Audit Committee
Nominations Committee
Chair
ULS Technology Annual Report & Accounts 2020 31
Andrew Weston
Elaine Bucknor
Oliver Scott
Co-founder and IT Director
Independent Non-Executive
Director
Non-Executive Director
Andrew co-founded ULS in 2003. He is
responsible for product development and
is the brains behind DigitalMove.
Elaine joined as Non-Executive Director
in June 2018. She is Chair of the
Nominations Committee.
He started his career developing
and implementing software solutions
at PE International plc and Vintner
Computer Systems. He founded his
own businesses: Weston Computing, in
1995; and Weston Technology in 2000.
Andrew has spent the last 14 years
building property, financial and legal
services applications for the Group and
also co-founded ehips Ltd (now known
as United Home Services Ltd) in 2007,
which is now part of ULS.
She is currently Sky Plc’s Group Chief
Information Security Officer and a Group
Director in its Technology Executive team.
Elaine has over 20 years in operational
and strategic technology consultancy and
leadership roles, with multinational market
leaders in the telecommunications,
media, technology, travel, financial and
public sectors. She has advised at
Board level on technology capabilities to
enable scalable growth and resilience in
highly disruptive markets and specialises
in shaping and executing innovative
technology strategies.
Elaine is a key sponsor on a number of
programmes to encourage more women
into technology-based careers and is
also a member of a number of industry
councils in the Technology and Cyber
Security sectors.
Oliver joined as Non-Executive Director
in January 2020. He is a partner of
Kestrel Partners LLP, the Company’s
largest shareholder, a business he co-
founded in 2009 and which specialises
in investing in smaller quoted technology
companies. Oliver is Chair of the Audit
and Remuneration Committees.
Prior to Kestrel, Oliver spent over
15 years advising smaller quoted and
unquoted companies, latterly as a
director of KBC Peel Hunt Corporate
Finance. Oliver has acted as Kestrel’s
representative on various of its public
and private investee companies and
was previously a non-executive director
of Idox plc, IQGeo Group plc and KBC
Advanced Technologies plc, prior to its
takeover by Yokogawa. Oliver is currently
a non-executive director of K3 Business
Technology plc.
Overview Strategic ReportGovernanceFinancial Statements 32
Chairman’s introduction to governance
ULS Technology plc and its
subsidiaries are committed to
high standards of corporate
governance. The Directors
recognise the importance of
sound corporate governance
and confirm that they aim to
comply with best practice
appropriate for a company
of its nature and scale.
Taking this into account, the
Board have chosen to comply
with the QCA Corporate
Governance Code. Below we
outline how we have applied
each of the principles of the
code and how its application
supports the Group’s medium
to long-term success.
Martin Rowland
Chairman
Governance principle
Compliant
Summary explanation
Further Detail
1
2
3
4
5
6
7
8
9
10
Establish a strategy and business model which
promotes long-term value for shareholders
Seek to understand and meet shareholder
needs and expectations
Take into account wider stakeholder and social
responsibilities and their implications for long
term success
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
The Group strategy is to grow market share and value through focusing on continual improvement,
See the Group’s business
innovation and quality. We will also endeavour to acquire complementary businesses to ULS where
model on pages 08 & 09 and
appropriate to do so.
strategy on pages 14 & 15
The Group seeks to maintain a regular dialogue with both existing and potential new shareholders
See our section 172
to communicate the Group’s strategy and progress and to understand the needs and expectations
statement on pages 24
of its shareholders.
The Group has a range of stakeholders. Making sure that all stakeholders benefit
from our business model helps ensure the long-term viability of the business.
The Group has an effective risk evaluation and management structure in place.
Maintain the Board as a wellfunctioning,
balanced team led by the Chair
The Board maintains an effective mix between Executive and Non-Executive
Directors and a range of experience and expertise to function effectively.
Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
The Board considers that all of the Board Directors are of sufficient competence
and calibre and, together, have the range of skills necessary to run and monitor
the Group successfully.
Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
Promote a corporate culture that is based on
ethical values and behaviours
Maintain governance structures and processes that
are fit for purpose and support good decision-making
by the Board
Communicate how the Company is governed and
is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board internally reviews its performance and is continually looking at ways to improve.
The Board seeks to maintain the highest standards of integrity and probity in the conduct of the
See our corporate social
Group’s operations. These values are enshrined in the written policies and working practices adopted
responsibility report on
by all employees in the Group.
pages 26 and 27
The Board understands that their decisions regarding strategy and risk will impact the corporate
culture of the Group and that this in turn will impact the performance of the Group.
The Board is aware that the control environment set will greatly impact all aspects of the company
and the way that employees behave and perform.
The Board believes that sound ethical values and behaviours set out in the ULS Ethics policy are vital
to enable the company to achieve is corporate objectives. The Group places considerable value on the
involvement of its employees and has continued to keep them informed on matters affecting them as
employees and on the various factors affecting the performance of the Group. This is achieved through
informal discussions between Group management, operating company management and employees as
well as regular ‘town hall’ meetings.
The Board has overall responsibility for promoting the success of the Group. The Executive Directors
See our corporate
have day-to-day responsibility for the operational management of the Group’s activities. The Non-
governance report on
Executive Directors are responsible for bringing independent and objective judgment to Board decisions.
pages 34 and 35
How the Group and the Board communicates with its shareholders and other stakeholders is
outlined above, in particular, under principles 2 and 3.
The Annual Report, notice of AGMs and results of previous AGMs can be found on the Group’s
See our section 172
statement on pages 24
and 25
web-site.
and 25
See our section 172
statement on pages 24
and 25
Risk management and
the principal risks and
uncertainties affecting the
Group are set out on pages
22 and 23
See our corporate
governance report on
pages 34 and 35
See the Board of Directors’
biographies on pages 30
to 31, and our corporate
governance report on
pages 34 and 35
See our corporate
governance report on
pages 34 and 35
ULS Technology Annual Report & Accounts 2020 33
Governance principle
Compliant
Summary explanation
Further Detail
The Group strategy is to grow market share and value through focusing on continual improvement,
innovation and quality. We will also endeavour to acquire complementary businesses to ULS where
appropriate to do so.
See the Group’s business
model on pages 08 & 09 and
strategy on pages 14 & 15
The Group seeks to maintain a regular dialogue with both existing and potential new shareholders
to communicate the Group’s strategy and progress and to understand the needs and expectations
of its shareholders.
See our section 172
statement on pages 24
and 25
The Group has a range of stakeholders. Making sure that all stakeholders benefit
from our business model helps ensure the long-term viability of the business.
The Group has an effective risk evaluation and management structure in place.
Maintain the Board as a wellfunctioning,
balanced team led by the Chair
The Board maintains an effective mix between Executive and Non-Executive
Directors and a range of experience and expertise to function effectively.
Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
The Board considers that all of the Board Directors are of sufficient competence
and calibre and, together, have the range of skills necessary to run and monitor
the Group successfully.
The Board internally reviews its performance and is continually looking at ways to improve.
See our section 172
statement on pages 24
and 25
Risk management and
the principal risks and
uncertainties affecting the
Group are set out on pages
22 and 23
See our corporate
governance report on
pages 34 and 35
See the Board of Directors’
biographies on pages 30
to 31, and our corporate
governance report on
pages 34 and 35
See our corporate
governance report on
pages 34 and 35
The Board seeks to maintain the highest standards of integrity and probity in the conduct of the
Group’s operations. These values are enshrined in the written policies and working practices adopted
by all employees in the Group.
See our corporate social
responsibility report on
pages 26 and 27
The Board understands that their decisions regarding strategy and risk will impact the corporate
culture of the Group and that this in turn will impact the performance of the Group.
The Board is aware that the control environment set will greatly impact all aspects of the company
and the way that employees behave and perform.
The Board believes that sound ethical values and behaviours set out in the ULS Ethics policy are vital
to enable the company to achieve is corporate objectives. The Group places considerable value on the
involvement of its employees and has continued to keep them informed on matters affecting them as
employees and on the various factors affecting the performance of the Group. This is achieved through
informal discussions between Group management, operating company management and employees as
well as regular ‘town hall’ meetings.
The Board has overall responsibility for promoting the success of the Group. The Executive Directors
have day-to-day responsibility for the operational management of the Group’s activities. The Non-
Executive Directors are responsible for bringing independent and objective judgment to Board decisions.
See our corporate
governance report on
pages 34 and 35
How the Group and the Board communicates with its shareholders and other stakeholders is
outlined above, in particular, under principles 2 and 3.
The Annual Report, notice of AGMs and results of previous AGMs can be found on the Group’s
web-site.
See our section 172
statement on pages 24
and 25
1
2
3
4
5
6
7
8
9
10
Establish a strategy and business model which
promotes long-term value for shareholders
Seek to understand and meet shareholder
needs and expectations
Take into account wider stakeholder and social
responsibilities and their implications for long
term success
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
Promote a corporate culture that is based on
ethical values and behaviours
Maintain governance structures and processes that
are fit for purpose and support good decision-making
by the Board
Communicate how the Company is governed and
is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
Overview Strategic ReportGovernanceFinancial Statements 34
Corporate governance statement
ULS Technology plc and its
subsidiaries are committed to high
standards of corporate governance.
The Directors recognise the importance of sound corporate governance and confirm that
they aim to comply with best practice appropriate for a company of its nature and scale.
Board
The Group’s Board is currently comprised of three Non-Executive
Directors and three Executive Directors. The Chairman is
responsible for the effective management of the Board.
All of the Board Directors are subject to election by shareholders
at the first Annual General Meeting after their appointment to the
Board and will continue to seek re-election at least once every
three years.
The Board considers Elaine Bucknor, Non-Executive Director, to
be independent. The Board does not consider Martin Rowland
and Oliver Scott as technically independent but that they do
provide a different perspective to the Executive Directors and
therefore there are sufficient checks and balances within the
Board for the size and complexity of the Group.
Elaine Bucknor and Martin Rowland receive their fees through
payroll and are not part of any share incentive plan or bonus
scheme. Martin is eligible to be included in any future share
incentive plan and for this reason we do not regard him as
independent. Martin has purchased shares since the period end
and these are disclosed in the Annual Report on page 36. The
Board does not regard this holding as material. The fee for Oliver
Scott is invoiced by Kestrel Partners LLP and not paid to Oliver
directly. Oliver is a partner of Kestrel Partners LLP who are the
Company’s largest shareholder.
Ten Board meetings are held each year where all Board Directors
are expected to attend. The Non-Executive Directors will
additionally meet with the Executive Directors on a regular basis.
In particular, the Chairman will meet with the CEO at least monthly.
The Non-Executive Directors time commitment to the Group is at
least two days per month while the Chairman’s time commitment
is at least two days per week.
Skills and experience
The Board considers that all of the Board Directors are of sufficient
competence and calibre and, together, have the range of skills
necessary to run and monitor the Group successfully.
The Board regularly reviews the composition of the Board to ensure
that it has the necessary breadth and depth of skills to support the
ongoing development of the Group. During the year Geoff Wicks
stepped down as Chairman and we were pleased that Martin
Rowland was able to step in to the role. As well as being a qualified
accountant Martin has extensive M&A experience and has held a
number of Executive and Non-Executive positions.
Elaine Bucknor has been on the Board for two years. As a
technology company, the Board felt it was important to have
a technology specialist as a Non-Executive Director and were
delighted that someone with Elaine’s background and experience
agreed to join. Elaine chairs the Nominations Committee.
Oliver joined the Board in January 2020. He is a partner of Kestrel
Partners LLP, the Company’s largest shareholder. Oliver has sat
on a number of Boards as a Non-Executive Director and brings the
perspective of a significant shareholder to the Board table. However,
the Board is cognisant of the fact shareholders have a range of views
and keep this fact to the forefront of their decision making process.
Oliver is Chair of the Audit and Remuneration Committees.
Board evaluation
The Board considers that the size of the Group does not justify the
use of third parties to evaluate the performance of the Board on
an annual basis. Nevertheless, review of the Executive Directors
by the Non-Executive Directors takes place regularly throughout
the year. Should the size of the Group increase, the Board will
consider whether it is appropriate to put in place a more prescribed
evaluation process. Additionally, third party Board Evaluation
Software to enable the evaluation of the Board as a whole has
been implemented.
Nominations Committee Report
The Nominations Committee is chaired by Elaine Bucknor and
includes Martin Rowland and Oliver Scott. It meets at least twice
a year and is responsible for reviewing the size, structure and
composition of the Board, succession planning, the appointment
and/or replacement of additional Directors and for making
appropriate recommendations to the Board.
During the reporting year, the committee was active appointing
Martin Rowland as Chairman and Oliver Scott as Non-Executive
Director. We were once again pleased that succession planning
has allowed relatively seamless changes to the Board. In this case
it has meant Martin stepping into the role of Chairman when Geoff
Wicks stepped down.
ULS Technology Annual Report & Accounts 2020 35
Board structures
The Board
The Board has overall
responsibility for promoting
the success of the Group. The
Executive Directors have day-today
responsibility for the operational
management of the Group’s
activities. The Non-Executive
Directors are responsible for
bringing independent and
objective judgement to
Board decisions.
The Board has
established Audit,
Remuneration and
Nominations
Committees.
The Committee is aware that only Elaine is fully regarded as
independent. As mentioned on the previous page it is considered
that there is sufficient diversity at present but the Committee are
keeping this under constant review and will move to appoint a
further independent Director if they deem it to be necessary.
Audit Committee Report
The Audit Committee is chaired by Oliver Scott and includes
Martin Rowland and Elaine Bucknor. It meets at least twice a
year and may invite other Directors to attend its meetings. The
Committee is responsible for reviewing a wide range of matters,
including half year and annual results before their submission
to the Board, and for monitoring the controls that are in force to
ensure the integrity of information reported to the shareholders.
The Audit Committee will also meet with the auditors without the
presence of the Executive Directors.
During the year Oliver replaced Martin Rowland as Chair of the
committee. As Chair, Martin met with the external auditors prior
to the audit to discuss areas of risk and where particular focus
should be placed. The committee agreed with the areas identified
by the external auditors as key audit matters as reported on
page 40.
Remuneration Committee Report
The Remuneration Committee is chaired by Oliver Scott and
includes Martin Rowland and Elaine Bucknor. It meets at least
twice a year and no Director is permitted to participate in
discussion or decisions concerning their own remuneration.
The Remuneration Committee reviews the performance of the
Executive Directors. It sets and reviews the scale and structure
of their remuneration, the basis of their remuneration and the
terms of their service agreements with due regard to the interests
of shareholders. In determining the remuneration of Executive
Directors, the Remuneration Committee will seek to enable
the Group to attract and retain staff of the highest calibre. The
Remuneration Committee will also make recommendations to the
Board concerning the allocation of share options to employees.
The remuneration of Directors and the share options they hold
can be seen on page 37. The Executive Directors are primarily
rewarded through basic salary, annual bonuses and share options.
The bonuses are primarily based on hitting profit targets. These
target are set at the start of the year and measured after the
year is complete and accounts agreed. Share options are used
to incentivise longer-term profit growth and value creation. The
committee are of the opinion that by using this combination
of incentives the Executives are fully aligned with the interests of
the shareholders.
During the year while there was growth in a number of areas that
was set against a few larger introducers being lost. This with the
backdrop of a difficult market meant that there were no bonuses
payable to the Executives for the year. Due to the COVID-19
scenario, the current expectation is that there will be no bonuses
payable for the year ending 31 March 2021.
Pay reviews for the Executive are conducted annually and the
committee uses external benchmarking reports as an aid. During
the reporting year, the committee revised the package for Steve
Goodall and John Williams broadly in line with inflation. Additionally
there was an above inflation rise for Andrew Weston as a result
of the benchmarking exercise which is expected to be a two-
staged increase.
An increased fee was agreed for Martin Rowland when he was
appointed Chairman. This was at a higher Fee than for the previous
Chairman in recognition of Martin agreeing to commit a greatly
increased amount of time. Martin will also be eligible for share
options when further options are issued.
Pay reviews due in July 2020 have been suspended for the time
being. In addition The Chairman and the Executive Directors
along with some other senior staff have taken a 20% salary
deferral for at least three months along with some other senior
management. The Non-Executive Directors have waived their fees
entirely for three months.
Overview Strategic ReportGovernanceFinancial Statements 36
Directors’ report
The Directors present their report and the financial statements of ULS for the year
ended 31 March 2020.
Principal activity
The Company acts as a holding company for its four subsidiaries and provides management services to its subsidiary companies.
The largest subsidiary, United Legal Services Limited, develops and provides software that supports the provision of online legal
comparison services, particularly in the conveyancing sector. Its disruptive technology creates competition amongst the providers
of legal services to the benefit of the consumer. Conveyancing Alliance Limited operates in a similar fashion.
Legal-Eye Limited provides risk management and compliance services to solicitors and licensed conveyancers.
United Home Services Limited has developed a commercial proposition for the estate agency comparison product. Its operations are
currently immaterial to the Group.
Review of business and future developments
The review of the business and future developments is outlined in the Chairman’s statement on pages 6 and 7 and the Chief Executive’s
Statement on pages 18 and 19.
Dividends
A final dividend in respect of the year ended 31 March 2019 of 1.20 pence per share was paid on 2 August 2019. An interim dividend of
1.25 pence per share was paid on 3 January 2020. The Directors have decided not to propose a final dividend.
Directors
The Directors of the Company during the year and their beneficial interest in the ordinary shares and share options of the Company at
31 March 2020 are set out below:
Andrew Weston
John Williams
Geoffrey Wicks
Steve Goodall
Ordinary shares
Share options
2020
2019
1,276,625
1,276,625
48,291
52,000
–
48,291
52,000
–
1,376,916
1,376,916
2020
226,898
485,809
–
650,000
1,362,707
2019
226,898
485,809
–
650,000
1,362,707
In addition to the above table, Oliver Scott was appointed to the board on 7 January 2020 and holds a beneficial interest in the holding
disclosed for Kestrel Partner below.
Martin Rowland purchased 60,000 Ordinary shares in May 2020.
Employee involvement
The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting
them as employees and on the various factors affecting the performance of the Group. This is achieved through informal discussions
between Group management, operating company management and employees, staff surveys as well as regular ‘town hall’ meetings.
The Group operates an EMI share option scheme and, as well as options issued to Directors as shown above, options have also been
issued to and are held by a significant number of employees.
Substantial shareholders
The Company has been notified of the following interests of three per cent or more in its issued share capital as at 31 March 2020.
Shareholder
Kestrel Partners
Schroder Investment Management
River and Mercantile Asset Management
Unicorn Asset Management
Lombard Odier Investment Managers
Herald Investment Management
Gresham House Strategic
No. of shares
16,582,266
6,860,816
5,675,860
5,150,200
4,658,454
4,400,000
4,252,438
%
25.56
10.58
8.75
7.94
7.18
6.78
6.56
ULS Technology Annual Report & Accounts 2020 37
Research and development
The Group develops software products in-house and CAL uses an external provider to do the same. These are capitalised in line with the
accounting policies shown on page 52.
Financial instruments and risks
The Group’s operations expose it to a variety of liquidity, credit and interest rate risks. Details of the use of financial instruments by ULS
and these risks are contained in pages 22 and 23 of the financial statements.
Directors’ remuneration
The following table sets out an analysis of the pre-tax remuneration for the year ended 31 March 2020 for the individual Directors who
held office in the Company during the year:
2020
Salary/fees
£
2020
Bonuses
£
2020
Benefits in
kind
£
Andrew Weston
John Williams
Geoffrey Wicks
Steve Goodall
Elaine Bucknor
Martin Rowland
Oliver Scott1
Peter Opperman
Ben Thompson
123,769
132,457
41,167
178,640
33,250
38,079
8,280
–
–
555,642
–
–
–
–
–
–
–
–
–
–
12,284
21,859
–
14,992
2,975
3,407
–
–
–
2020
Sub Total
£
136,053
154,316
41,167
193,632
36,225
41,486
–
–
–
2020
Share-based
payment
£
8,806
9,412
–
46,584
–
–
–
–
–
2020
Total
£
144,859
163,728
41,167
240,216
36,225
41,486
8,280
–
–
2019
Total
£
129,611
162,368
38,913
229,300
29,626
11,734
–
11,340
(53,009)
55,518
602,880
64,802
675,961
559,893
1 The fee for the services of Oliver Scott is paid to Kestrel and not to Oliver directly.
The share-based payment charge for Ben Thompson is negative for the previous period due to the write back of previous charges on
options which lapsed prior to vesting when he left the business.
Geoff Wicks resigned as a Director on 14 February 2020. Oliver Scott was appointed as a Director on 7 January 2020.
Share options and warrants
The share-based payment of £64,802 (2019: £(20,451)) to Directors represents the share-based expense relating to share options
issued in prior years. The following share options table comprises share options held by Directors who held office during the year ended
31 March 2020:
Options held
at 31 March
2019
Options
granted in
period
Options
exercised in
period
Options
lapsed in
period
John Williams
John Williams
Andrew Weston
Steve Goodall
Steve Goodall
258,911
226,898
226,898
322,500
327,500
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Options
held at
31 March
2020
258,911
226,898
226,898
322,500
327,500
Exercise
price (p)
Exercisable
from
Exercisable
to
40.00
76.75
76.75
106.00
134.25
18/08/17
17/08/24
21/12/19
20/12/26
21/12/19
20/12/26
01/05/20
31/04/27
28/06/21
27/06/28
Share dealing code
The Group has adopted a share dealing code for Directors and applicable employees of the Group for the purpose of ensuring
compliance by such persons with the provisions of the AIM rules relating to dealings in the Group’s securities (including, in particular,
Rule 21 of the AIM rules). The Directors consider that this share dealing code is appropriate for a company whose shares are admitted
to trading on AIM. The Group takes proper steps to ensure compliance by the Directors and applicable employees with the terms of the
share dealing code and the relevant provisions of the AIM rules (including Rule 21).
Overview Strategic ReportGovernanceFinancial Statements 38
Directors’ report continued
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Group’s website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Group’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Disclosure of information to auditors
The Directors confirm that, in so far as each Director is aware:
• there is no relevant audit information of which the Group’s
auditor is unaware; and
• the Directors have taken all steps that they ought to have taken
as Directors to make themselves aware of any relevant audit
information and to establish that the Group’s auditor is aware
of that information.
Directors’ responsibilities statement
The Directors are responsible for preparing the strategic report,
Directors’ report and the financial statements in accordance with
applicable law and regulations.
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs and profit
and loss of the Company and Group for that period. In preparing
these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgments and accounting estimates that are reasonable
and prudent;
• state whether IFRSs as adopted by the European Union and
UK Accounting Standards have been followed, subject to any
material departures disclosed and explained in the financial
statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions, and disclose with reasonable accuracy at any time
the financial position of the Group, and enable them to ensure that
the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have to
prepare the consolidated financial statements in accordance
with International Financial Reporting Standards (IFRSs) as
adopted by the European Union and have elected to prepare the
Parent Company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (UK Accounting
Standards and applicable laws). Under company law the Directors
Auditors
Grant Thornton UK LLP are the appointed auditor of ULS
Technology plc. A resolution to reappoint them as auditors and to
authorise the Directors to agree their remuneration will be placed
before the forthcoming Annual General Meeting of the Company.
Approved by the Board of Directors and signed on its behalf:
Steve Goodall
John Williams
Chief Executive Officer
ULS Technology plc
Chief Financial Officer
ULS Technology plc
23 June 2020
Company number: 07466574
ULS Technology Annual Report & Accounts 2020 39
Independent auditor’s report
to the members of ULS Technology plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of ULS Technology plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the
year ended 31 March 2020, which comprise the consolidated income statement, the consolidated statement of comprehensive
Income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated statement of cash
flows, notes to the consolidated financial statements, including a summary of significant accounting policies, the parent company
balance sheet, the parent company statement of changes in equity and notes to the parent company financial statements,
including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation
of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union. The financial reporting framework that has been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced
Disclosures Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 March
2020 and of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report.
We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
The impact of macro-economic uncertainties on our audit
Our audit of the financial statements requires us to obtain an understanding of all relevant uncertainties, including those arising as
a consequence of the effects of macro-economic uncertainties such as COVID-19 and Brexit. All audits assess and challenge the
reasonableness of estimates made by the directors and the related disclosures and the appropriateness of the going concern basis of
preparation of the financial statements. All of these depend on assessments of the future economic environment and the group’s future
prospects and performance.
COVID-19 and Brexit are amongst the most significant economic events currently faced by the UK, and at the date of this report
their effects are subject to unprecedented levels of uncertainty, with the full range of possible outcomes and their impacts unknown.
We applied a standardised firm-wide approach in response to these uncertainties when assessing the group’s future prospects and
performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a group
associated with these particular events.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
• the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
In our evaluation of the directors’ conclusions, we considered the risks associated with the group’s business model, including effects
arising from macro-economic uncertainties such as COVID-19 and Brexit, and analysed how those risks might affect the group’s
resources or ability to continue operations over the period of at least twelve months from the date when the financial statements are
authorised for issue. In accordance with the above, we have nothing to report in these respects.
Overview Strategic ReportGovernanceFinancial Statements 40
Independent auditor’s report continued
to the members of ULS Technology plc
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor’s report is
not a guarantee that the group will continue in operation.
Overview of our audit approach
• Overall materiality: £214,000, which represents 5% of the group’s profit before tax;
• Key audit matters were identified as going concern, revenue recognition and impairment of
goodwill and other intangible assets;
• We performed full scope audit procedures on the financial statements of ULS Technology plc,
the parent company, and on the financial information of its four wholly owned trading
subsidiaries; as well as specified procedures on ULS Technology plc Employee Benefit Trust.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those that had the greatest effect on the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter – Group
How the matter was addressed in the audit – Group
Going concern
As stated in “the impact of macro-
economic uncertainties on our audit”
section of our report, Covid-19 is
one of the most significant economic
events currently faced by the UK, and
at the date of this report its effects
are subject to unprecedented levels
of uncertainty. This event could
adversely impact the future trading
performance of the company, as there
may be a significant impact on the
business due to the adverse impact
on the housing market, and as such
increases the extent of judgement and
estimation uncertainty associated with
management’s decision to adopt the
going concern basis of accounting
in the preparation of the financial
statements.
As such we identified going concern
as a significant risk, which was one of
the most significant assessed risks of
material misstatement.
We undertook procedures to evaluate management’s assessment of the impact of Covid-19
on the company’s forecastedresults and cash position. Our audit work included, but was not
restricted to:
• obtaining management’s original forecasts covering the period to March 2022. We
assessed how these forecasts were compiled, including assessing their accuracy by
validating the reasonableness of underlying assumptions;
• obtaining management’s revised forecasts prepared to assess the potential impact of
Covid-19. We evaluated the assumptions applied, including the reduction in revenue
and the resulting effect on the forecasted results and cash position during the estimated
period of Covid-19, for reasonableness and determined whether they had been applied
accurately. We also considered whether the assumptions are consistent with our
understanding of the business;
• challenging management’s assumptions used in the forecast models by performing
sensitivity analysis on management’s revised forecasts to determine the reduction in
profit T and cash position that would lead to elimination of the headroom in their original
cash flow forecasts;
• testing the accuracy of management’s forecasting through comparison of budget to
actual data and historical variance trends and checking the cash flows for exceptional or
unusual items or assumptions to consider whether management has a robust process for
assessing going concern; and
• assessing the adequacy of the going concern disclosures included within the financial
statements.
The group’s accounting policy on going concern is shown in the principal accounting
policies under the sub-heading ‘Going Concern’ and related disclosures are included in
the Chairman’s statement and the Directors’ report on page 06 and 36 of the financial
statements.
Key observations
Based on the procedures performed, we have identified no issues regarding management’s
assessment of the impact of Covid-19 on the company’s forecasted profits and cash
position. We have nothing to report in addition to that stated in the ‘Conclusions relating
to going concern’ section of our report.
ULS Technology Annual Report & Accounts 2020 41
Key Audit Matter – Group
How the matter was addressed in the audit – Group
Impairment of goodwill and other intangible assets
Management are required to make
an annual assessment to determine
whether the group’s goodwill and
other intangible assets are impaired.
The goodwill balance for the group is
£11,008,000 and the other intangibles
balance is £6,151,000 at the year end.
The process for assessing
whether assets are impaired under
International Accounting Standard
(IAS) 36 ‘Impairments of Assets’ is
complex. It involves management
determining the recoverable amount
of cash generating units (CGUs),
which is the higher of value in use
and fair value less costs of disposal.
The determination of forecasted
cash flows related to cash generating
units (CGUs) and the the appropriate
discount rate and other assumptions
to be applied, are highly judgemental
and can significantly impact the results
of the impairment review.
We therefore identified the impairment
of goodwill and other intangible assets
as a significant risk, which was one of
the most significant assessed risks of
material misstatement.
Our audit work included, but was not restricted to:
• assessing the group’s accounting policy for goodwill and other intangibles for compliance
with the financial reporting framework and whether management has accounted for
impairment of goodwill and other intangibles in accordance with that policy;
• obtaining management’s assessment of the relevant CGUs used in the impairment
calculation and comparing this information to our understanding of the business units and
operating structure of the Group.
• comparing the results of management’s impairment review for each CGU against the
carrying value of the associated goodwill and intangible assets to determine whether
there is impairment
• testing the assumptions utilised in the impairment models by calculation of our own
estimates of growth rates and discount rate to evaluate management’s point estimate;
• challenging management’s assumptions used in the impairment review relating to
intangible assets by inputting less favourable assumptions into a sensitivity analysis of key
factors, such as revenue and cost growth; and
• testing the accuracy of management’s forecasting through comparison of budget to
actual data and historical variance trends and checking the cash flows for exceptional or
unusual items or assumptions to consider whether management has a robust process for
assessing impairment.
The group’s accounting policy on impairment of non-current assets is shown in the principal
accounting policies under the sub-heading ‘Impairment of non-current assets including
goodwill’ and related disclosures are included in notes 10 and 13 to the financial statements.
Key observations
Based on our audit work, we considered the calculations and forecasts used by management
in the impairment calculations for goodwill and other intangible assets and the conclusions
reached to be reasonable and supportable. We did not identify any material misstatements
within the investment in subsidiaries within the consolidated balance sheet.
Revenue Recognition
Revenues of £28,272,000 have been
recognised in the year ended 31
March 2020. This is a material number
within the financial statements.
Revenue impacts a number of key
performance indicators and key
strategic indicators set out in the
strategic report. There is a degree of
management judgement involved in
relation to the timing and recognition
of revenues.
The risk in this area was considered to
have one main element: revenue items
remaining unpaid at year end may
have been incorrectly recognised.
We therefore identified revenue
recognition as a significant risk,
which was one of the most
significant assessed risks of material
misstatement.
Our audit work included, but was not restricted to:
• assessing the appropriateness, consistency and application of the group’s accounting
policy against the requirements of IFRS 15 Revenue from Contracts with Customers for
all revenue streams;
• selecting a sample of revenue transactions across the trading entities that remained
unpaid at the balance sheet date and agreeing to remittance advice and cash received
in the bank statement. For certain revenue streams the underlying contract or customer
acceptance forms were inspected.
The group’s accounting policy on revenue recognition is show in the principal accounting
policies under the sub-heading ‘Revenue Recognition’ and related disclosures are included
in note 1 to the financial statements.
Key observations
Based on our audit work, our assessment is that revenue has been recognised in
accordance with the financial reporting framework, including IFRS 15, and no material
misstatements were identified.
We did not identify any key audit matters relating to the audit of the
financial statements of the parent company.
Overview Strategic ReportGovernanceFinancial Statements 42
Independent auditor’s report continued
to the members of ULS Technology plc
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of
a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature, timing and extent of
our audit work and in evaluating the results of that work.
Materiality was determined as follows:
Materiality measure
Group
Parent company
Financial statements
as a whole
Performance materiality
used to drive the extent
of our testing
Specific materiality
Communication of
misstatements to
the audit committee
£214,000 which is 5% of the group’s profit before
tax. This benchmark is considered the most
appropriate because this is a key performance
indicator for management and users of the financial
statements.
Materiality for the current year is higher than the
level that we determined for the year ended 31
March 2019 to reflect the increase in total profit
before tax in the group.
£51,000 which was calculated based upon the
net assets of this company but capped to reflect
the relevant significance of this company on the
group’s results. . This benchmark is considered the
most appropriate because it is a key performance
indicator for both management and users of the
financial statements.
Materiality for the current year is lower than the
level that we determined for the year ended 31
March 2019 to better reflect the significance of the
company on the group’s results.
75% of financial statement materiality.
75% of financial statement materiality.
We determined a lower level of specific materiality
for certain areas such as related party transactions,
including directors’ remuneration.
We determined a lower level of specific materiality
for certain areas such as related party transactions,
including directors’ remuneration.
£10,700 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
£8,100 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
The graph below illustrates how performance materiality interacts
with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality –
Group
Overall materiality –
Parent
25%
25%
75%
75%
Tolerance for potential uncorrected misstatements
Performance materiality
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a
thorough understanding of the group’s business, its environment
and risk profile. We considered material components using group
materiality and our scope included the following:
• Evaluation by the group audit team of identified components
to assess the significance of that component and to determine
the planned audit response based on a measure of materiality.
For example, significance as a percentage of the group’s total
assets, revenues and profit before taxation or significance based
on qualitative factors, such as specific use is or concerns over
specific components.
• Obtaining an understanding of the group’s internal control
environment by performing process walkthroughs and
documenting the controls covering all of the key audit matters.
• Performing a full scope audit of the financial statements of the
parent company ULS Technology plc, which includes 100% of
the group’s investments.
• Performing a full scope audit of the financial information of United
Legal Services Limited, United Homes Services Limited, Legal-
Eye Limited and Conveyancing Alliance Limited, the trading
entities within the group.
• Performing specified procedures on the financial information of
ULS Technology Employee Benefit Trust, primarily in respect of
the shares held in the parent company at the balance sheet date
and share movements during the year.
ULS Technology Annual Report & Accounts 2020 43
• Our full scope and specified audit procedures covered 100%
of the revenue recognised, 100% of the profit recognised and
100% of the assets held.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the annual
report, other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement
in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
• the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report under
the Companies Act 2006
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent company financial statements are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Responsibilities of Directors for the financial
statements
As explained more fully in the directors’ responsibilities statement
set out on page 38, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as
the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the group’s and the parent company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group
or the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members
as a body, for our audit work, for this report, or for the opinions we
have formed.
Mark Bishop FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Oxford
23 June 2020
Overview Strategic ReportGovernanceFinancial Statements 44
ULS Technology Annual Report & Accounts 2020
A better home moving experience for
Introducers
Introducers, such as lenders, mortgage brokers and estate agents have always found our platforms
useful to find the right conveyancer for their client at the right price, backed up by our no completion
no fee promise and market-leading service proposition.
The systems are easy to use and
give our partners confidence
that the quality and breadth of
solicitors to choose from will
make the property transaction
and mortgage application process
faster and smoother.
As well as enabling the instructing
of a solicitor, our platforms
provide ongoing updates as a
case progresses giving the broker
visibility, supported by a seven day
a week service desk so that the
broker always knows that help is
at hand if needed.
We work closely with introducers
to build conveyancing panels
and products to suit their mix of
business types, business volumes
and customer base. Our platforms
are designed to support related
services to make introducers more
able to help their clients in more
ways. These can be provided by
ULS, the introducer themselves
or third parties and now include a
concierge service (Just Move In)
and several survey propositions.
Our platforms can be customised if
that suits an introducer’s business
model and we provide fully white-
labelled propositions for a range of
lenders and larger mortgage clubs
and networks. We also encourage
and support partners to gain
maximum benefit from our systems
and expertise by integrating with
our API.
DigitalMove has become a
significant differentiator for
introducers, giving their customers
the chance to get started
instantly and enjoy the benefits
of the intuitive DigitalMove digital
application. No more waiting
weeks for paperwork to arrive, as
everything is there for them the
second they press the ’instruct’
button. Introducers love the way
this instantly engages the customer
with the process and the fact that
house purchase using DigitalMove
are on average measurably quicker
than non-DigitalMove equivalents. A
clear & transparent journey, happy
and empowered customers and a
faster and reliable home move or
refinancing ticks significant boxes
for our introducer partners.
3,500+
Mortgage brokers actively
using our systems
Active mortgage brokers on our platforms
is measured as someone who has placed
an instruction for a conveyancing case
through one of our platforms in the last
three months.
I have used ULS technology for some years now. This
is because the service is efficient, simple to use and
Josh, may account manager, is always very supportive
whenever I need him for anything. I recommend this
service as part of my mortgage service, as I can control
the great service the client gets as the solicitors used
on their panels are very pro-active and Josh is
always on hand to sort any issues to manage
the expectations of clients and ensure it’s as
smooth as possible.”
Richard Willan
45
Financial statements
46 Consolidated Income Statement
46 Consolidated statement
of comprehensive income
47 Consolidated Balance Sheet
48 Consolidated statement of changes
in equity
49 Consolidated statement of cash flows
50 Notes to the consolidated financial
statements
74 Parent Company Balance Sheet
Parent Company statement of
75
changes in equity
76 Notes to the Parent Company
financial statements
82 Company information
We’ve been working with ULS for
several months now as part of our
Transformation Journey. From day 1
ULS have demonstrated a real desire
to integrate with us and they have
consistently provided ideas and
support. We feel that we are well on
the way to developing a partnership
with ULS rather than your standard
‘supplier relationship’.”
Principality Building Society
Overview Strategic ReportGovernanceFinancial Statements 46
Consolidated Income Statement
for the year ended 31 March 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit before exceptional expenses
Exceptional admin expenses
Operating profit
Finance income
Finance costs
Profit before tax
Tax expense
Profit for the financial year attributable to the Group’s equity shareholders
Earnings per share from operations
Basic earnings per share (£)
Diluted earnings per share (£)
Notes
1
3
2
5
6
7
8
8
2020
£000’s
28,272
(15,849)
12,423
(7,975)
4,448
(243)
4,205
14
(195)
4,024
(759)
3,265
2019
£000’s
29,963
(17,450)
12,513
(7,531)
4,982
(752)
4,230
12
(132)
4,110
(827)
3,283
0.0506
0.0482
0.0509
0.0483
Consolidated statement of comprehensive income
for the year ended 31 March 2020
Profit for the financial year
Total comprehensive income for the financial year attributable to the owners of the parent
2020
£000’s
3,265
3,265
2019
£000’s
3,283
3,283
ULS Technology Annual Report & Accounts 2020 47
Consolidated Balance Sheet
as at 31 March 2020
Assets
Non-current assets
Intangible assets
Goodwill
Financial assets at FVOCI
Investment in associates
Property, plant and equipment
Long-term receivables
Prepayments
Current assets
Inventory
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Capital and reserves attributable to the Group’s equity shareholders
Share capital
EBT reserve
Share premium
Capital redemption reserve
Share based payment reserve
Retained earnings
Total equity
Non-current liabilities
Borrowings
Lease liabilities
Deferred taxation
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax payable
Total liabilities
Total equity and liabilities
Notes
2020
£000’s
2019
£000’s
13
10
11
12
14
16
16
15
16
17
18
20
24
7
19
20
24
6,151
11,008
–
533
2,140
250
123
20,205
–
1,874
2,340
4,214
24,419
259
(453)
4,609
113
427
7,624
12,579
750
1,309
1,045
3,104
3,296
5,000
158
282
8,736
11,840
24,419
6,442
11,008
100
551
437
200
151
18,889
48
1,874
1,852
3,774
22,663
259
(484)
4,585
113
293
5,973
10,739
1,750
–
1,031
2,781
5,813
3,000
–
330
9,143
11,924
22,663
The financial statements were approved by the Board of Directors on 23 June 2020 and were signed on its behalf by:
Steve Goodall
Chief Executive Officer
ULS Technology plc
Company number: 07466574
John Williams
Finance Director
ULS Technology plc
Overview Strategic ReportGovernanceFinancial Statements
48
Consolidated statement of changes in equity
for the year ended 31 March 2020
Share
capital
£000’s
EBT
reserve
£000’s
Share
premium
£000’s
Capital
redemption
reserve
£000’s
Share-
based
payments
reserve
£000’s
Retained
earnings
£000’s
Balance at 1 April 2018
259
(527)
4,585
113
267
4,643
Profit for the year
Total comprehensive income
Purchase of shares by EBT
Exercise of options
Share-based payments
Deferred taxation share options
Payment of dividends
Total transactions with owners
Balance at 31 March 2018
Balance at 1 April 2019
Profit for the year
Total comprehensive income
Issue of shares
Purchase of shares by EBT
Exercise of options
Share-based payments
Payment of dividends
Total transactions with owners
–
–
–
–
–
–
–
–
259
259
–
–
–
–
–
–
–
–
–
–
(207)
250
–
–
–
43
(484)
–
–
–
–
–
–
–
–
4,585
(484)
4,585
–
–
–
(29)
60
–
–
31
–
–
24
–
–
–
–
24
–
–
–
–
–
–
–
–
113
113
–
–
–
–
–
–
–
–
Balance at 31 March 2020
259
(453)
4,609
113
–
–
–
(16)
42
–
–
26
293
293
–
–
–
–
(9)
143
–
134
427
Total
Equity
£000’s
9,340
3,283
3,283
(207)
73
42
(277)
(1,515)
(1,884)
3,283
3,283
–
(161)
–
(277)
(1,515)
(1,953)
5,973
10,739
5,973
3,265
3,265
–
–
(33)
–
10,739
3,265
3,265
24
(29)
18
143
(1,581)
(1,614)
(1,581)
(1,425)
7,624
12,579
ULS Technology Annual Report & Accounts 2020 49
Consolidated statement of cash flows
for the year ended 31 March 2020
Notes
2020
£000’s
2019
£000’s
Cash flow from operating activities
Profit for the financial year before tax
Finance income
Finance costs
Loss on disposal of plant and equipment
Share of loss/(profit) from associate
Amortisation
Depreciation
Impairment of financial assets at FVOCI
Share-based payments
Tax paid
Changes in working capital
Decrease in inventories
(Increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Cash inflow from operating activities
Cash flow from investing activities
Purchase of intangible software assets
Purchase of property, plant and equipment
Disposal of property, plant and equipment
Payment of deferred consideration
Interest received
Net cash used in investing activities
Cash flow from financing activities
Share issue proceeds
Dividends paid
Interest paid
Lease payments
Movement on RCF
Repayment of loans
Shares Traded by EBT
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
5
6
12
13
14
13
14
5
32
6
20
20
4,024
(14)
195
–
18
1,196
324
100
143
(793)
5,193
48
(22)
(180)
4,110
(12)
132
1
(4)
1,076
204
–
42
(824)
4,725
7
(361)
463
5,039
4,834
(905)
(405)
–
(2,337)
14
(3,633)
24
(1,581)
(195)
(155)
2,000
(1,000)
(11)
(918)
488
1,852
2,340
(798)
(371)
1
(2,934)
12
(4,090)
–
(1,515)
(132)
–
1,000
(1,000)
(134)
(1,781)
(1,037)
2,889
1,852
Overview Strategic ReportGovernanceFinancial Statements 50
Notes to the consolidated financial statements
Principal accounting policies
Basis of preparation
The Consolidated Financial Statements of ULS Technology plc and its subsidiaries (together, 'the Group') have been prepared in accordance
with International Financial Reporting Standards ('IFRS'), as adopted by the EU, IFRIC interpretations and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
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. These accounting policies
comply with each IFRS that is mandatory for accounting periods ending on 31 March 2020.
The financial statements have been prepared under the historical cost convention. The principal accounting policies set out below have
been consistently applied to all periods presented.
Going Concern
The Board and Key Management routinely plan future activities including forecasting future cash flows. They have reviewed their plans and
formed a judgement that the Group has adequate resources to continue as a going concern for at least 12 months from the date of signing of
the financial statements. In arriving at this judgement, the Directors have reviewed the cash flow projections of the Group for the foreseeable
future and have considered existing commitments together with financial resources available to the Group.
Particular consideration has been given to COVID-19 and its impact on the housing market. More detail on this work is given in the
Financial Review on page 21.
Basis of consolidation
The Consolidated Financial Statements incorporate the results of ULS Technology plc ('the Company') and entities controlled by the
Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of
an investee entity so as to obtain benefits from its activities and the ability to use its power over the investee to affect the returns from
the investee.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement from
the effective date of acquisition and up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Business combinations
The Group financial statements consolidate those of the parent company and all of its subsidiaries as of 31 March 2020. All subsidiaries
have a reporting date of 31 March.
The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
values at the acquisition date.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on
transactions between Group companies. Amounts reported in the financial statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective
date of acquisition, or up to the effective date of disposal, as applicable.
Acquisition-related costs are expensed as incurred.
Interest in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.
Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint
control over those policies.
The post-tax results of associates are incorporated in the Group’s results using the equity method of accounting. Under the equity method,
investments in associates are carried in the Consolidated Balance Sheet at cost as adjusted for post-acquisition changes in the Group’s share
of the net assets of the associate, less any impairment in the value of investment. Losses of associates in excess of the Group’s interest in that
associate are not recognised. Additional losses are provided for, and a liability is recognised, only to the extent that the Group has incurred legal
or constructive obligations or made payments on behalf of the joint venture or associate.
ULS Technology Annual Report & Accounts 2020 51
Employee benefit trust
The Directors consider that the Employee Benefit Trust (EBT) is under the de facto control of the Company as the trustees look to the Directors
to determine how to dispense the assets. Therefore the assets and liabilities of the EBT have been consolidated into the Group accounts. The
EBT’s investment in the Company’s shares is eliminated on consolidation and shown as a deduction against equity. Any assets in the EBT will
cease to be recognised in the Consolidated Balance Sheet when those assets vest unconditionally in identified beneficiaries.
Revenue recognition
Revenue comprises revenue recognised in respect of services, supplied during the period and is recognised to the extent that it is
probable that the economic benefits will flow to the Group and the revenue can be reliably measured, based on when performance
obligations have been satisfied.
Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and
other sales taxes.
Revenue from a contract to provide services which are completed at an identifiable point in time is recognised when the performance obligation
is met, and when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the Group will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.
Revenue is recognised on completion of the legal services. For a conveyancing transaction, this will be on completion of the property
transaction and if the transaction falls through prior to completion no fees will be payable by the consumer to the solicitor or by the
solicitor (customer) to the Company or by the Company to the introducer (supplier).
The proportion of the fee that the Company receives on completion of a conveyancing transaction that is remitted to a third party
(introducer), such as a mortgage broker or intermediary, is recognised as a cost of sale. This is because the Group bears most of the
credit risk, delivers the service and sets the pricing.
Segmental reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur
expenses (including revenues and expenses related to transactions with other components of the same entity), whose operating results
are regularly reviewed by the entity’s Chief Operating Decision Maker to make decisions about resources to be allocated to the segment
and assess its performance, and for which discrete financial information is available. The Chief Operating Decision Maker has been
identified as the Board of Executive Directors, at which level strategic decisions are made.
Details of the Group’s reporting segments are provided in note 1.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or as incurred.
Exceptional operating expenses are non-recurring in nature and of a material size. Items are classified as exceptional to aid the
understanding of the underlying performance of the business.
Finance income and costs
Interest is recognised using the effective interest method which calculates the amortised cost of a financial asset or liability and allocates
the interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
receipts or payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately
recognised. Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business
less accumulated impairment losses, if any.
Overview Strategic ReportGovernanceFinancial Statements 52
Notes to the consolidated financial statements
Principal accounting policies continued
Other intangible assets
Capitalised development expenditure
An internally-generated intangible asset arising from development expenditure is recognised if, and only if, all of the following criteria have
been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use of sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
• the ability to measure reliably the expenditure attributable to the intangible asset during its development; and
• the amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when
the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised,
development expenditure is expensed in the period in which it is incurred.
Amortisation is calculated so as to write off the cost of an asset, net of any residual value, over the estimated useful life of that asset as follows:
• Capital development expenditure – Straight line over 4–7 years.
• Development expenditure not meeting the criteria to be capitalised totalled £nil (2019: £nil).
Brand names and customers lists
Brand names and customer lists acquired in a business combination that qualify for separate recognition are recognised as intangible
assets at their fair values.
Amortisation is calculated so as to write off the cost of an asset on a straight line basis, net of any residual value, over the estimated
useful life of that asset as follows:
• Customer and introducer relationships – 10 to 12 years.
• Brand names – 10 years.
• Acquired technology platform – 9 years.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and less any recognised impairment losses. Cost
includes expenditure that is directly attributable to the acquisition or construction of these items. Subsequent costs are included in the
asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the costs
can be measured reliably. All other costs, including repairs and maintenance costs, are charged to the Consolidated Income Statement in
the period in which they are incurred.
Depreciation is provided on all property, plant and equipment and is calculated on a straight-line basis as follows:
• Leasehold improvements – Over the life of the lease.
• Computer equipment – 25% on cost.
• Fixtures and fittings – 25% on cost.
Depreciation is provided on cost less residual value over the asset’s useful life. The residual value, depreciation methods and useful lives
are annually reassessed.
Each asset’s estimated useful life has been assessed with regard to its own physical life limitations and to possible future variations in
those assessments. Estimates of remaining useful lives are made on a regular basis for all equipment, with annual reassessments for
major items. Changes in estimates are accounted for prospectively.
The gain or loss arising on disposal or scrapping of an asset is determined as the difference between the sales proceeds, net of selling
costs, and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
Impairment of non-current assets including goodwill
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating
units) that is expected to benefit from the synergies of the combination. Each unit to which goodwill is allocated represents the lowest
level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating
segment level.
ULS Technology Annual Report & Accounts 2020 53
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication
that the unit may be impaired.
At each Balance Sheet reporting date the Directors review the carrying amounts of the Group’s tangible and intangible assets, other than
goodwill, to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the
asset or cash-generating unit is reduced to its recoverable amount. If the recoverable amount of a cash-generating unit is less than its
carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognised as an expense immediately.
An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate
of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset or cash-generating unit in prior periods. A reversal of an impairment loss is recognised in
the Consolidated Income Statement immediately.
Inventories
Work in progress is valued on the basis of direct costs attributable to jobs under completion at the reporting date.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits held at call with banks and other short-term highly liquid investments with
original maturities of three months or less.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in
accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets are classified into the following categories:
• amortised cost; or
• fair value through profit or loss (FVTPL); or
• fair value through other comprehensive income (FVOCI).
In the periods presented the Company does not have any financial assets categorised as FVTPL.
The classification is determined by both:
• the entity’s business model for managing the financial asset; and
• the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance
income or other financial items, except for impairment of trade receivables which is presented within other administrative expenses.
Overview Strategic ReportGovernanceFinancial Statements 54
Notes to the consolidated financial statements
Principal accounting policies continued
Financial instruments continued
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and other receivables fall into this category of
financial instruments.
Financial assets at fair value through other comprehensive income (FVOCI)
The Company accounts for financial assets at FVOCI if the assets meet the following conditions:
• they are held under a business model whose objective it is 'hold to collect' the associated cash flows and sell; and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
The Group’s 15% share in Financial Eye Limited are classified as financial assets at FVOCI.
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset.
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL)
model’. Instruments within the scope of these requirements included loans and other debt-type financial assets measured at amortised
cost, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee
contracts (for the issuer) that are not measured at fair value through profit or loss.
The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past
events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of
the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk
(‘Stage 1’), and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low
(‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the
second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of
the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the
loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential
for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators
and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been
grouped based on the days past due. Refer to Note 21 for further details.
ULS Technology Annual Report & Accounts 2020 55
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and contingent consideration.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial liabilities
designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss. Contingent
consideration is measured at FVTPL.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within
finance costs or finance income.
Current taxation
Current taxation for each taxable entity in the Group is based on the taxable income at the UK statutory tax rate enacted or substantively
enacted at the Balance Sheet reporting date and includes adjustments to tax payable or recoverable in respect of previous periods.
Deferred taxation
Deferred taxation is calculated using the liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial information. However, if the deferred tax arises from the initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not
accounted for. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet
reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax liabilities are provided in full
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary
differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Consolidated Income Statement,
except where they relate to items that are charged or credited directly to equity or other comprehensive income in which case the related
deferred tax is also charged or credited directly to equity or other comprehensive income.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Employment benefits
Provision is made in the financial information for all employee benefits. Liabilities for wages and salaries, including non-monetary benefit
and annual leave obliged to be settled within 12 months of the Balance Sheet reporting date, are recognised in accruals.
The Group’s contributions to defined contribution pension plans are charged to the Consolidated Income Statement in the period to
which the contributions relate.
Leasing
For reporting in the comparative period, where substantially all of the risks and rewards incidental to ownership are not transferred to the
Group (an "operating lease"), the total rentals payable under the lease were charged to the income statement on a straight-line basis over
the lease term. The aggregate benefit of lease incentives was recognised as a reduction of the rental expense over the lease term on a
straight-line basis. Lease incentives were capitalised and spread over the period of the lease term.
From 1 April 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract,
that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the
Group assesses whether the contract meets three key evaluations which are whether:
• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at
the time the asset is made available to the Group;
• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract;
• the Group has the right to direct the use of the identified asset throughout the period of use.
Overview Strategic ReportGovernanceFinancial Statements 56
Notes to the consolidated financial statements
Principal accounting policies continued
Leasing continued
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset
is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an
estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease
commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such
indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable
payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options
reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for
interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease
liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit or loss if the right-of-use asset is already
reduced to zero.
On the balance sheet, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in
trade and other payables.
Equity and reserves
Equity and reserves comprise the following:
• 'Share capital' represents amounts subscribed for shares at nominal value.
• 'EBT reserve' represents cost of shares bought and sold through the Employee Benefit Trust.
• 'Share premium' represents amounts subscribed for share capital, net of issue costs, in excess of nominal value.
• 'Capital redemption reserve' represents the nominal value of re-purchased share capital.
• 'Share-based payment reserve' represents the accumulated value of share-based payments expensed in the profit and loss.
• 'Retained earnings' represents the accumulated profits and losses attributable to equity shareholders.
Share-based employee remuneration
The Group operates share option based remuneration plan for its employees. None of the Group’s plans are cash settled.
Where employees are rewarded using share-based payments, the fair value of employees’ services is determined indirectly by reference
to the fair value of the equity instruments granted. This fair value is appraised at the grant date using the Black-Scholes model.
All share-based remuneration is ultimately recognised as an expense in profit and loss with a corresponding credit to retained earnings.
The expense is allocated over the vesting period. Other than the requirement to be an employee at the point of exercise there are no other
vesting requirements and all share options are expected to become exercisable. Subsequent revisions to this give rise to an adjustment
to cumulative share-based compensation which is recognised in the current period. The number of vested options ultimately exercised by
holders does not impact the expense recorded in any period.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs, are allocated to share capital up
to the nominal (par) value of the shares issued with any excess being recorded as share premium.
Contingent liabilities
No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are
disclosed as contingent liabilities unless the outflow of resources is remote.
New and amended International Financial Reporting Standards adopted by the Group
The following new standards, amendments to standards or interpretations are effective for the first time this year applicable to the Group.
New/Revised International Financial
Reporting Standards
Effective date: annual
periods beginning on
or after:
EU adopted
Impact on Group
IFRS 16
Leases
1 January 2019
Yes
Most operating
leases will be
capitalised on the
Balance Sheet
ULS Technology Annual Report & Accounts 2020 57
The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related lease liability in connection with
all former operating leases.
The new Standard has been applied using the modified retrospective approach, with right of use assets and corresponding liabilities
recognised as an adjustment in the current period. At this date, the Group has also elected to measure the right-of-use assets at an
amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition. Prior periods
have not been restated.
The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at
the date of initial application of IFRS 16, being 1 April 2019.
Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group has relied on its historic
assessment as to whether leases were onerous immediately before the date of initial application of IFRS 16.
On transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 2.5%.
The Group has benefited from the use of hindsight for determining the lease term when considering options to extend and terminate leases.
The following is a reconciliation of the financial statement line items from IAS 17 to IFRS 16 at 1 April 2019:
Property, plant and equipment
Lease liabilities
Prepayments
Carrying amount at
31 March 2019
Remeasurements
IFRS 16 carrying
amount at
1 April 2019
£
437
–
383
£
565
(565)
(20)
£
1,002
(565)
363
The following is a reconciliation of total operating lease commitments at 31 March 2019 (as disclosed in the financial statements to
31 March 2019) to the lease liabilities recognised at 1 April 2019:
Operating lease commitments recognised at 31 March 2019
Post break clause adjustment
Effects of discounting
Lease liabilities recognised under IFRS 16 at 1 April 2019
£
312
312
(79)
545
International Financial Reporting Standards in issue but not yet effective
At the date of authorisation of these Consolidated Financial Statements, the IASB and IFRS Interpretations Committee have issued
standards, interpretations and amendments which are applicable to the Group.
Whilst these standards and interpretations are not effective for, and have not been applied in the preparation of, these Consolidated
Financial Statements, the following may have an impact going forward:
New/Revised International Financial
Reporting Standards
Effective date: annual
periods beginning on
or after:
EU adopted
Impact on Group
IAS 1
Amendments to IAS 1 and IAS 8: Definition of Material
1 January 2020
IAS 1
IFRS 3
IFRS 3
IAS 16
IAS 37
Amendments to IAS 1: Classification of Liabilities
as Current or Non-current
Amendment to IFRS 3 Business Combinations
Amendment to IFRS 3 Business Combinations
1 January 2022
1 January 2020
1 January 2022
Amendments to IAS 16 Property, Plant and Equipment
1 January 2022
Amendments to IAS 37 Provisions, Contingent Liabilities
and Contingent Assets
1 January 2022
Yes
No
Yes
No
No
No
Immaterial
Immaterial
Immaterial
Immaterial
Immaterial
Immaterial
Overview Strategic ReportGovernanceFinancial Statements 58
Notes to the consolidated financial statements
Principal accounting policies continued
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in conformity with generally accepted accounting practice requires management to make
estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and
liabilities at the Balance Sheet reporting date and the reported amounts of revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
Estimates
The following are the significant estimates used in applying the accounting policies of the Group that have the most significant effect on
the financial statements:
Fair value of intangible assets acquired in business combinations
In determining the fair value of intangible assets acquired in business combinations, estimates have been used by a specialist valuation
company on behalf of management, using information supplied by management, in order to determine the fair values using appropriate
modelling techniques.
Impairment review
The Group assesses the useful life of intangible assets to determine if there is a definite or indefinite period of useful economic life;
this requires the exercise of judgement and directly affects the amortisation charge on the asset. The Group tests whether there are
any indicators of impairment at each reporting date. Discounted cash flows are used to assess the recoverable amount of each cash
generating unit, and this requires estimates to be made. If there is no appropriate method of valuation of an intangible asset, or no clear
market value, management will use valuation techniques to determine the value. This will require assumptions and estimates to be made.
The Group has taken a prudent view on the possible impact of COVID-19 and the lockdown on discounted cashflows particularly over the
coming year.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the
assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT
equipment.
Contingent consideration arising on business combinations
Contingent consideration is payable based on the future performance of an acquisition to the former shareholders. The likelihood of
payment and ultimate value payable are a matter of judgement.
Contingent Consideration occurs in the circumstances where an element of the consideration for an acquired business is determined
based upon one or more criteria that are achievable in future periods. The most commonly applied is the achievement of forecast
profitability. A defined value of consideration will be payable based on such achievement, and any underperformance against those
targets will be credited back to the Consolidated Income Statement.
Judgements
The following are the significant judgements used in applying the accounting policies of the Group that have the most significant effect on
the financial information:
Capitalisation of development expenditure
The Group applies judgement in determining whether internal research and development projects meet the qualifying criteria set out
in IAS 38 for the capitalisation of development expenditure as internally generated intangible assets. The particular uncertainty and
judgement centres around whether a project will be commercially successful, particularly in the pre-revenue phase.
Investment in Associates
While the current profitability of HomeOwners Alliance is limited, it is the judgement of the Board that the contribution overall to the Group
in terms of conveyancing business introduced in addition to the longer-term prospects of the company mean that there is no impairment
to the carrying value of the associate.
ULS Technology Annual Report & Accounts 2020 59
1. Segmental reporting
Operating segments
Management identifies its operating segments based on the Group’s service lines, which represent the main product and services
provided by the Group. The Group of similar services which makes up the Group’s Comparison Services segment represents more than
95% of the total business. Additionally, the Board reviews Group consolidated numbers when making strategic decisions and, as such,
the Group considers that it has one reportable operating segment. All sales are made in the UK.
Revenues from customers who contributed more than 10% of revenues were as follows:
Customer 1
Customer 2
2. Operating profit
Operating profit is stated after charging:
Fees payable to the Group’s auditors for the audit of the annual financial statements
Fees payable to the Group’s auditors and its associates for other services to the Group:
– Audit of the accounts of subsidiaries
Amortisation
Depreciation
Operating lease rentals payable:
– Office and equipment
3. Exceptional administrative expenses
M&A expenses (including abortive costs)
Adjustment to expected deferred/contingent consideration
Impairment of financial assets at FVOCI
M&A expenses in both years relates to abortive costs only.
2020
£000’s
6,071
3,322
2020
£000’s
32
22
1,196
324
–
2020
£000’s
30
113
100
243
2019
£000’s
6,125
3,682
2019
£000’s
30
21
1,076
204
82
2019
£000’s
269
483
–
752
4. Directors and employees
The aggregate payroll costs of the employees, including both management and Executive Directors, were as follows:
Staff costs
Wages and salaries
Social security costs
Pension costs
2020
£000’s
2019
£000’s
4,524
492
340
5,356
4,242
523
352
5,117
Overview Strategic ReportGovernanceFinancial Statements 60
4. Directors and employees continued
Average monthly number of persons employed by the Group during the year was as follows:
By activity:
Production
Distribution
Administrative
Management
Remuneration of Directors
Emoluments for qualifying services
Pension contributions
Social security costs
Highest paid Director
Remuneration
The highest paid Director received share options as shown in the Directors’ report on page 37.
A breakdown of the emoluments for Directors can be found in the Directors’ report on page 36.
Key management personnel are identified as the Executive Directors.
Remuneration of key management
Emoluments for qualifying services
Pension contributions
Social security costs
Payments of pensions contributions have been made on behalf of Directors (see page 37).
5. Finance income
Bank interest
2020
Number
2019
Number
33
35
23
11
102
30
35
20
12
97
2020
£000’s
2019
£000’s
616
52
68
736
524
36
90
650
2020
£000’s
2019
£000’s
240
229
2020
£000’s
2019
£000’s
503
45
56
604
433
35
81
549
2020
£000’s
14
2019
£000’s
12
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020 61
2020
£000’s
(169)
(26)
2019
£000’s
(132)
–
2020
£000’s
2019
£000’s
6. Finance costs
Interest on borrowings
Lease interest
7. Taxation
Analysis of credit in year
Current tax
United Kingdom
UK corporation tax on profits for the year
745
820
Deferred tax
United Kingdom
Origination and reversal of temporary differences
Corporation tax charge
The differences are explained as follows:
Profit before tax
UK corporation tax rate
Expected tax expense
Adjustments relating to prior year
Adjustment for additional R&D tax relief
Adjust opening deferred tax rate to 19%
Deferred tax not recognised
Adjustment for non-deductible expenses
– Expenses not deductible for tax purposes
– Other permanent differences
Income tax charge
Deferred tax
Deferred tax liabilities at applicable rate for the period of 19%:
Opening balance at 1 April
– Property, plant and equipment and capitalised development spend temporary differences
– Deferred tax recognised on acquisitions of Legal Eye and Conveyancing Alliance
– Deferred tax on share options
14
759
2020
£000’s
4,024
19%
765
(2)
(197)
33
1
133
26
759
2020
£000’s
1,031
79
(96)
31
7
827
2019
£000’s
4,110
19%
781
(4)
(158)
–
54
173
(19)
827
2019
£000’s
747
49
(96)
331
Deferred tax liabilities – closing balance at 31 March
1,045
1,031
Overview Strategic ReportGovernanceFinancial Statements 62
8. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to Ordinary Shareholders by the weighted average number of
Ordinary Shares outstanding during the year.
Basic earnings per share
Total basic earnings per share
Total diluted earnings per share
2020
£
0.0506
2019
£
0.0509
0.0482
0.0483
The earnings and weighted average number of Ordinary Shares used in the calculation of basic earnings per share were as follows:
Earnings used in the calculation of total basic and diluted earnings per share
Number of shares
2020
£000’s
3,265
2019
£000’s
3,283
2020
Number
2019
Number
Weighted average number of Ordinary Shares for the purposes of basic earnings per share
64,499,023
64,462,605
Taking the Group’s share options and warrants 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
2020
Number
2019
Number
Dilutive (potential dilutive) effect of share options, conversion shares and warrants
3,224,904
3,475,267
Weighted average number of ordinary shares for the purposes of diluted earnings per share
67,723,927
67,937,872
9. Subsidiaries
Details of the Group’s subsidiaries are as follows:
Name of subsidiary
Principal activity
United Legal
Services Limited
Development and hosting of internet-based software
applications for legal services businesses
United Home
Services Limited
Development and hosting of internet-based software
applications for property services businesses
Class of
shares
Place of
incorporation
and operation
Ordinary
England & Wales
% ownership held
by the Group
2020
100%
2019
100%
Ordinary
England & Wales
100%
100%
Legal-Eye Limited
Compliance consultancy services for solicitors
Ordinary
England & Wales
Conveyancing Alliance
(Holdings) Limited
Intermediary non-trading holding company
Ordinary
England & Wales
100%
100%
100%
100%
Conveyancing
Alliance Limited
Development and hosting of internet-based software
applications for legal services businesses
Ordinary
England & Wales
100%
100%
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020 10. Goodwill
Opening value at 1 April and closing value at 31 March
Goodwill split by CGU is as follows:
Core
CAL
63
2020
£000’s
11,008
2020
£000’s
4,524
6,484
11,008
2019
£000’s
11,008
2019
£000’s
4,524
6,484
11,008
The recoverable amounts of intangible assets and goodwill was determined using value-in-use calculations, based on cash flow
projections from a formally approved 24 month forecast which has been extrapolated into perpetuity. Account has been taken in the
first 12 months in particular of the forecast of the impact of COVID-19 which are expected to significantly diminish positive cash flows.
A growth rate of 2% has been applied to extrapolate the cash flows by reference to the long-term growth rate of the UK economy.
The pre-tax discount rate for each CGU was 13.5% for Core and 15.6% for CAL which reflect current market assessments of the time
value of money and specific risks.
11. Financial assets at FVOCI
Opening value at 1 April
Changes in fair value of investments
Closing value at 31 March
2020
£000’s
100
(100)
–
2019
£000’s
100
–
100
The Group acquired 15% of Financial Eye on 27 February 2015 as a separately identifiable part of the transaction in which Legal Eye
was acquired.
12. Investment in associates
Opening value at 1 April
Share of profit/(losses) for the year
Closing value at 31 March
2020
£000’s
551
(18)
533
2019
£000’s
547
4
551
The Group acquired 35% of Homeowners Alliance Ltd on 29 February 2016. Homeowners Alliance Ltd’s place of incorporation and
operation is in the UK.
The associate is not material to the Group’s results.
Overview Strategic ReportGovernanceFinancial Statements 64
13. Intangible assets
Cost
At 1 April 2018
Additions
Disposals
At 31 March 2019
Additions
Disposals
At 31 March 2020
Accumulated amortisation
At 1 April 2018
Charge
Disposals
At 31 March 2019
Charge
Disposals
At 31 March 2020
Net book value
At 1 April 2018
At 31 March 2019
At 31 March 2020
Capitalised
development
expenditure
£000’s
Acquired
technology
platform
£000’s
Customer and
Introducer
relationships
£000’s
Brands
£000’s
Total
£000’s
4,088
798
–
4,886
905
–
5,791
1,830
536
–
2,366
658
–
3,024
2,258
2,520
2,767
1,117
3,619
–
–
–
–
1,117
3,619
–
–
–
–
1,117
3,619
160
124
–
284
124
–
408
957
833
709
567
359
–
926
357
–
1,283
3,052
2,693
2,336
568
–
–
568
–
–
568
115
57
–
172
57
–
229
453
396
339
9,392
798
–
10,190
905
–
11,095
2,672
1,076
–
3,748
1,196
–
4,944
6,720
6,442
6,151
Amortisation is included within administrative expenses.
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020 65
14. Property, plant and equipment
Leasehold
improvements
£000’s
Right of
use assets
£000’s
Computer
equipment
£000’s
Fixtures and
fittings
£000’s
Total
£000’s
Cost
At 1 April 2018
Additions
Disposals
At 31 March 2019
Transition to IFRS 16
Additions
Disposals
At 31 March 2020
Accumulated depreciation
At 1 April 2018
Charge
Disposals
At 31 March 2019
Charge
Disposals
At 31 March 2020
Net book value
At 1 April 2018
At 31 March 2019
At 31 March 2020
569
–
–
569
–
246
–
815
530
39
–
569
10
–
579
39
–
236
–
–
–
–
565
1,058
–
1,623
–
–
–
–
121
–
121
–
–
1,502
601
364
(13)
952
–
119
–
84
7
–
91
–
40
(3)
1,071
128
384
155
(11)
528
186
–
714
217
424
357
68
10
–
78
7
(2)
83
16
13
45
1,254
371
(13)
1,612
565
1,463
(3)
3,637
982
204
(11)
1,175
324
(2)
1,497
272
437
2,140
Depreciation is recognised within administrative expenses.
15. Inventories
Work in progress
2020
£’000
–
2019
£’000
48
Overview Strategic ReportGovernanceFinancial Statements 66
16. Trade and other receivables
Current assets
Trade receivables
Other receivables
Pre-payments
Non-current assets
Pre-payments
Long-term receivables (loans to associate)
The Directors consider the carrying value of trade and other receivables is approximate to its fair value.
Details of the Group’s exposure to credit risk is given in Note 21.
17. Cash and cash equivalents
Cash at bank (GBP)
2020
£000’s
2019
£000’s
1,302
286
286
1,874
123
250
373
1,307
335
232
1,874
151
200
351
2020
£000’s
2,340
2019
£000’s
1,852
At March 2020 and 2019 materially all significant cash and cash equivalents were deposited with major clearing banks in the UK with at
least an ‘A’ rating.
18. A) Share capital
Allotted, issued and fully paid
The Company has one class of Ordinary share which carries no right to fixed income nor has any preferences or restrictions attached.
Ordinary shares of £0.004 each
64,871,276
2020
No
£000’s
259
2019
No
64,828,057
64,871,276
259
64,828,057
£000’s
259
259
As regards income and capital distributions, all categories of shares rank pari passu as if the same constituted one class of share.
Shares issued and fully paid
Beginning of the year
New shares issue
As at end of the year
During the year the Company issued 43,219 new ordinary shares (2019: no shares issued).
2020
Number
2019
Number
64,828,057
64,828,057
43,219
–
64,871,276
64,828,057
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020 67
18. B) Share-based payments
Ordinary share options:
The Group operates an EMI share option scheme to which the Executive Directors and employees of the Group may be invited to
participate by the remuneration committee. Options are exercisable at a price equal to the closing price of the Company’s share on the
day prior to the date of grant. The options vest in three equal tranches, three, four and five years after date of grant. The options are
settled in equity once exercised. Where the individual limits for an EMI scheme the options will be treated as unapproved but within the
same scheme rules.
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.
Options were valued using the Black-Scholes option-pricing model. The following table shows options issued which were outstanding as
at 31 March 2020:
Date of grant
18 August 2014
21 August 2015
7 November 2016
21 December 2016
2 May 2017
28 June 2018
9 August 2018
Exercise
price (£)
Share price at
Options in issue
date of grant (£)
as 31 March 2020
0.4000
0.5350
0.7025
0.7675
1.0600
1.3425
1.3325
0.4800
0.5350
0.7025
0.7675
1.0600
1.3425
1.3325
445,784
38,835
466,023
777,865
322,500
527,500
552,500
The Group recognised total expenses of £143,000 (2019: £42,000) related to share options accounted for as equity-settled share-based
payment transactions during the year.
A reconciliation of option movements over the year to 31 March 2020 is shown below:
Outstanding at 1 April
Granted
Forfeited prior to vesting
Exercised
Outstanding at 31 March
As at 31 March 2020
As at 31 March 2019
Number of
options
3,329,055
–
(109,520)
(88,528)
3,131,007
Weighted average
exercise price
£
0.93
–
1.12
0.48
0.94
Number of
options
4,309,785
1,165,000
(1,969,928)
(175,802)
3,329,055
Weighted average
exercise price
£
0.62
1.34
0.53
0.41
0.93
Overview Strategic ReportGovernanceFinancial Statements 68
19. Trade and other payables
Trade payables
PAYE and social security
VAT
Other creditors
Accruals and deferred income
Deferred/contingent consideration
20. Borrowings
Secured – at amortised cost
Bank loan
Revolving cash flow facility
Current
Non-current
Reconciliation of liabilities arising from financing activities
Balance at 1 April 2019
Loan repayments
Movement in revolving cash flow facility
Balance at 31 March 2020
2020
£000’s
1,707
149
680
294
466
–
3,296
2019
£000’s
2,313
139
693
25
419
2,224
5,813
2020
£000’s
2019
£000’s
1,750
4,000
5,750
5,000
750
5,750
2,750
2,000
4,750
3,000
1,750
4,750
Bank loans
Total debt
£000’s
4,750
(1,000)
2,000
5,750
£000’s
4,750
(1,000)
1,000
4,750
Summary of borrowing arrangements:
• In December 2016, it took out a five year term loan for £5 million and now has a £4 million revolving cash flow facility. Both have a current
interest rate of 1.70% above LIBOR. The term loan is subject to repayments of £250,000 plus accrued interest quarterly. At the end of the
financial period £4 million was drawn down on the revolving cash flow facility and the balance on the term loan stood at £1.75m.
• Loans are secured by way of fixed and floating charges over all assets of the Group.
• Amounts shown represent the loan principals; accrued interest is recognised within accruals – any amounts due at the reporting date
are paid within a few days.
• Post year-end a 6 month repayment holiday was agreed on the term loan, extending the period of the loan by 6 months. Also a £1m
overdraft had been agreed.
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020
69
21. Financial instruments
Classification of financial instruments
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do
not have a significant financing component.
Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within 120 days from the
invoice date and failure to engage with the Group on alternative payment arrangements, amongst others, are considered indicators of no
reasonable expectation of recovery. The Group generally has a low incidence of unpaid receivables.
The tables below set out the Group’s accounting classification of each class of its financial assets and liabilities.
Financial assets
Trade receivables net of provision for credit losses
(note 16)
Loans and other receivables (note 16)
Financial assets at FVOCI (note 11)
Cash and cash equivalents (note 17)
Measured at fair value
Measured at amortised cost
2020
£000’s
2019
£000’s
–
–
–
–
–
–
–
100
–
100
2020
£000’s
1,302
536
–
2,340
4,178
2019
£000’s
1,307
535
–
1,852
3,694
The investment in Financial Eye Limited represents a 15% equity interest in an unlisted company acquired in 2015. All of the above
financial assets carrying values are approximate to their fair values, as at 31 March 2020 and 2019.
Financial liabilities
Financial liabilities measured at amortised cost (note 19)
Borrowings (note 20)
Lease liability
Deferred/contingent consideration
Measured at fair value
Measured at amortised cost
2020
£000’s
–
–
–
–
–
2019
£000’s
–
–
–
2,224
2,224
2020
£000’s
2,467
5,750
1,467
–
9,684
2019
£000’s
2,758
4,750
–
–
7,508
Current loan instruments are linked to LIBOR with a margin of 1.70% per annum, which is a fairly standard market rate.
Overview Strategic ReportGovernanceFinancial Statements 70
21. Financial instruments continued
Financial assets and financial liabilities measured at fair value in the Consolidated Balance Sheet are grouped into three Levels of a fair
value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
• Level 3: unobservable inputs for the asset or liability.
The only financial liability carried at fair value is the contingent consideration (carried at fair value through profit or loss).
The fair value of contingent consideration related to the acquisition of Conveyancing Alliance Holdings Limited is estimated using a
present value technique.
Level 3 fair value measurements
The reconciliation of the carrying amounts of financial instruments classified within Level 3 is as follows:
Balance at 1 April 2019
Payments made
Movement in NPV
Balance at 31 March 2020
Contingent consideration
2020
£000’s
2,224
(2,337)
113
–
2019
£000’s
4,674
(2,934)
484
2,224
Financial instrument risk exposure and management
The Group’s operations expose it to degrees of financial risk that include liquidity risk, credit risk and interest rate risk.
This note describes the Group’s objectives, policies and process for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented in notes 15, 16, 17, 19, and 20.
Liquidity risk
Liquidity risk is dealt with in note 22 of this financial information.
Credit risk
The Group’s credit risk is primarily attributable to its cash balances and trade receivables. The Group does not have a significant
concentration of risk, with exposure spread over a number of third parties.
All of the Group’s trade and other receivables have been reviewed for indicators of impairment. The Group suffers a very small incidence
of credit losses. However, where management views that there is a significant risk of non-payment, a specific provision for impairment is
made and recognised as a deduction from trade receivables.
Impairment provision
The amount of trade receivables past due but not considered to be impaired at 31 March is as follows:
Not more than 3 months
More than 3 months but not more than 6 months
More than 6 months but not more than 1 year
More than one year
Total
2020
£000’s
57
2020
£000’s
222
6
7
6
241
2019
£000’s
133
2019
£000’s
545
12
14
58
629
The credit risk on liquid funds is limited because the third parties are large international banks with a credit rating of at least A.
The Group’s total credit risk amounts to the total of the sum of the receivables and cash and cash equivalents, as described in note 17.
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020 71
Interest rate risk
The Group has secured debt as disclosed in note 20. The interest on this debt is linked to LIBOR and therefore there is an interest rate
risk. However, the relative amount of debt outstanding is low which limits the risk.
The balances disclosed above represent the principal debt. Interest is paid quarterly, and all interest due has either been paid at each
reporting date, or is paid within a few days of that date – in the latter case, interest accrued is included within accruals.
The Group’s only other exposure to interest rate risk is the interest received on the cash held on deposit, which is immaterial.
22. Liquidity risk
Prudent liquidity risk management includes maintaining sufficient cash balances to ensure the Group can meet liabilities as they fall due.
In managing liquidity risk, the main objective of the Group is therefore to ensure that it has the ability to pay all of its liabilities as they fall
due. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. The table below
shows the undiscounted cash flows on the Group’s financial liabilities as at 31 March 2020 and 2019, on the basis of their earliest
possible contractual maturity.
At 31 March 2020
Trade payables
Other payables
Accruals
Lease liabilities
Loans
At 31 March 2019
Trade payables
Other payables
Accruals
Deferred and contingent consideration
Loans
Total
£000’s
Within
2 months
£000’s
Within 2–6
months
£000’s
6–12
months
£000’s
1–2 years
£000’s
1,707
1,707
294
466
1,643
5,790
9,900
294
466
–
–
2,467
–
–
–
96
4,519
4,615
–
–
–
96
513
609
–
–
–
178
758
936
Total
£000’s
Within
2 months
£000’s
Within 2–6
months
£000’s
6–12
months
£000’s
1–2 years
£000’s
2,313
2,313
25
419
2,337
4,868
9,962
25
419
–
–
2,757
–
–
–
–
2,546
2,546
–
–
–
2,337
527
2,864
–
–
–
–
1,035
1,035
Greater
than
2 years
£000’s
–
–
–
1,273
–
1,273
Greater
than
2 years
£000’s
–
–
–
–
760
760
The amounts payable for loans, as presented above, include the quarterly interest payments due in accordance with the terms described
in note 20 in addition to the repayment of principal at maturity.
23. Capital management
The Group’s capital management objectives are:
• to ensure the Group’s ability to continue as a going concern; and
• to provide long-term returns to shareholders.
The Group defines and monitors capital on the basis of the carrying amount of equity plus its outstanding loan notes, less cash and
cash equivalents as presented on the face of the Consolidated Balance Sheet and further disclosed in notes 17 and 20.
The Board of Directors monitors the level of capital as compared to the Group’s commitments and adjusts the level of capital as is
determined to be necessary by issuing new shares. The Group is not subject to any externally imposed capital requirements.
These policies have not changed in the year. The Directors believe that they have been able to meet their objectives in managing the
capital of the Group.
Overview Strategic ReportGovernanceFinancial Statements 72
23. Capital management continued
The amounts managed as capital by the Group for the reporting period under review are summarised as follows:
Total Equity
Cash and cash equivalents
Capital
Total Equity
Borrowings
Financing
Capital-to-overall financing ratio
2020
£000’s
12,654
2,340
14,994
12,654
5,750
18,404
0.81
2019
£000’s
10,729
1,852
12,581
10,729
4,750
15,479
0.81
24. Lease arrangements
The Group does not have an option to purchase any of the leased assets at the expiry of the lease periods.
The Group has leases over 3 properties, with remaining lease terms ranging from 1 to 10 years although there are break clauses in the
longer leases.
Lease liabilities are secured by the related underlying assets. The undiscounted maturity analysis of lease liabilities at 31 March 2020 is as
follows:
31 March 2020
Gross liability
Finance charges
Within one year
£000’s
1–2 years
£000’s
2–5 years
£000’s
6–10 years
£000’s
192
(35)
157
178
(31)
147
532
(70)
462
740
(40)
700
Total
£000’s
1,643
(176)
1,467
The total cash outflow in respect of leases during the year was £181,000.
The interest expense in the year relating to lease liabilities was £26,000.
25. Financial commitments
There are no other financial commitments.
26. Retirement benefit plans
The Group operates a defined contribution pension scheme for its employees. The pension cost charge represents contributions payable
by the Group and amounted to £340,000 (2019: £352,000).
Notes to the consolidated financial statements continued ULS Technology Annual Report & Accounts 2020
73
27. Related party transactions
Directors:
G Wicks
A Weston
J Williams
M Rowland
O Scott
For remuneration of Directors please see note 4 and the more detailed disclosures in the Directors’ Report on page 37.
Dividends paid to Directors are as follows:
Geoff Wicks
Ben Thompson
Andrew Weston
John Williams
2020
£000’s
2019
£000’s
1
–
31
1
1
–
30
1
Oliver Scott has a beneficial interest in Kestrel who have a shareholding and would have received dividends in the period.
Legal-Eye Ltd uses a training platform provided by DeepHarbour Ltd, a company which Martin Rowland and his wife are the Directors
and which they own more than 25% but less than 50%. During the year, the Group were invoiced £12,000 by DeepHarbour Ltd for the
provision of its training platform. The was no balance outstanding at the period end. The terms of the provision of the training platform
were in place prior to the appointment of Martin as a Director of the Group and are considered to be at arms-length.
28. Contingent liabilities
The Directors are not aware of any contingent liabilities within the Group or the Company at 31 March 2020 and 2019.
29. Ultimate controlling party
The Directors do not consider there to be an ultimate controlling party.
30. Events after the Balance Sheet date
There have been no reportable subsequent events between 31 March 2020 and the date of signing this report.
31. Dividends paid
Final dividend for the year ended 31 March 2019 of 1.20p (2018: 1.15p) per share
1st Interim dividend 1.25p (2019: 1.20p) per share
Total dividends paid
2020
£000’s
774
807
1,581
2019
£000’s
741
774
1,515
The Directors have recommended that no final dividend be payable in respect of the year ended 31 March 2020.
Overview Strategic ReportGovernanceFinancial Statements
74
Parent Company Balance Sheet
as at 31 March 2020
Assets
Non-current assets
Investments
Non-current receivables
Deferred tax asset
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Capital and reserves attributable to the Group’s equity shareholders
Share capital
Share premium
Capital redemption reserve
Share-based payment reserve
Opening retained earnings
Profit for the year
Exercise of options
Deferred tax on share options
Payment of dividends
Total retained earnings
Total equity
Non-current liabilities
Borrowings
Current liabilities
Trade and other payables
Borrowings
Total liabilities
Total equity and liabilities
Notes
2020
£000’s
2019
£000’s
2
3
3
6
5
4
5
17,604
17,476
30
–
39
14
17,634
17,529
514
50
564
367
45
412
18,198
17,941
259
4,609
113
427
4,508
3,778
9
–
(1,581)
6,714
12,122
750
750
326
5,000
5,326
6,076
18,198
259
4,585
113
293
2,671
3,435
42
(125)
(1,515)
4,508
9,758
1,750
1,750
3,433
3,000
6,433
8,183
17,941
The financial statements were approved by the Board of Directors on 23 June and were signed on its behalf by:
Steve Goodall
Chief Executive Officer
ULS Technology plc
Company number: 07466574
ULS Technology Annual Report & Accounts 2020 75
Total
Equity
£000’s
7,921
3,435
3,435
42
–
(125)
(1,515)
(1,598)
9,758
Parent Company statement of changes in equity
for the years ended 31 March 2020
Balance at 1 April 2018
259
4,585
113
293
2,671
Share
capital
£000’s
Share
premium
£000’s
Capital
redemption
reserve
£000’s
Share-
based
payments
reserve
£000’s
Retained
earnings
£000’s
Profit for the year
Total comprehensive income
Share-based payments
Exercise of options
Deferred tax on share options
Payment of dividends
Total transactions with owners
Balance at 31 March 2019
Balance at 1 April 2019
Profit for the year
Total comprehensive income
Share issue
Share-based payments
Exercise of options
Payment of dividends
Total transactions with owners
Balance at 31 March 2020
–
–
–
–
–
–
–
–
–
–
–
–
–
–
259
259
4,585
4,585
–
–
–
–
–
–
–
–
–
24
–
–
–
24
–
–
–
–
–
–
–
113
113
–
–
–
–
–
–
–
259
4,609
113
–
–
42
(42)
–
–
–
293
293
–
–
–
143
(9)
–
134
427
3,435
3,435
–
42
(125)
(1,515)
(1,598)
4,508
4,508
9,758
3,778
3,778
–
–
9
(1,581)
(1,572)
3,778
3,778
24
143
–
(1,581)
(1,414)
6,714
12,122
Overview Strategic ReportGovernanceFinancial Statements 76
Notes to the Parent Company financial statements
1. Parent Company accounting policies
Basis of Preparation
The annual financial statements of ULS Technology plc (the Parent Company financial statements) have been prepared in accordance
with Financial Reporting Standard 100 Application of Financial Reporting Requirements (‘FRS 100’) and Financial Reporting Standard 101
Reduced Disclosure Framework (‘FRS 101’).
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore,
these financial statements do not include:
• certain comparative information as otherwise required by EU endorsed IFRS;
• certain disclosures regarding the Company’s capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with the Company’s wholly owned subsidiaries.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted because equivalent disclosures are included
in the Company’s Consolidated Financial Statements. These financial statements do not include certain disclosures in respect of:
• share-based payments;
• revenue from contracts with customers;
• financial instruments (other than certain disclosures required as a result of recording financial instruments at fair value); and
• fair value measurement other than certain disclosures required as a result of recording financial instruments at fair value).
As permitted by section 408 of Companies Act 2006, a separate Income Statement for the Company has not been included in these
financial statements.
The principal accounting policies adopted in the preparation of the financial statements as set out below have been consistently
applied to all periods presented.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in
accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets are classified into the following categories:
• amortised cost;
• fair value through profit or loss (FVTPL); and
• fair value through other comprehensive income (FVOCI).
In the periods presented the Company does not have any financial assets categorised as FVTPL or FVOCI.
The classification is determined by both:
• the entity’s business model for managing the financial asset; and
• the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance
income or other financial items, except for impairment of trade receivables which is presented within other administrative expenses.
ULS Technology Annual Report & Accounts 2020
77
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the
effect of discounting is immaterial. The Company’s cash and cash equivalents, trade and other receivables fall into this category of
financial instruments.
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL)
model’. Instruments within the scope of these requirements included loans and other debt-type financial assets measured at amortised
cost, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee
contracts (for the issuer) that are not measured at fair value through profit or loss.
The Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including
past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows
of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk
(‘Stage 1’); and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low
(‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the
second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the
financial instrument.
Trade and other receivables and contract assets
The Company makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records
the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the
potential for default at any point during the life of the financial instrument. In calculating, the Company uses its historical experience,
external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
The Company assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have
been grouped based on the days past due. Refer to Note 21 for further details.
Classification and measurement of financial liabilities
The Company’s financial liabilities include borrowings, trade and other payables and contingent consideration.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Company
designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial liabilities
designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss. Contingent
consideration is measured at FVTPL.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within
finance costs or finance income.
Investments
Investments in subsidiaries are shown within the parent undertaking’s financial statements at cost, less any provision for impairment in
value. Investments in associates are accounted for at cost less impairment in the individual financial statements.
Overview Strategic ReportGovernanceFinancial Statements 78
Notes to the Parent Company financial statements continued
1. Parent Company accounting policies continued
Current taxation
Current taxation for each taxable entity in the Company is based on the taxable income at the UK statutory tax rate enacted or
substantively enacted at the Balance Sheet reporting date and includes adjustments to tax payable or recoverable in respect of
previous periods.
Deferred taxation
Deferred taxation is calculated using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial information. However, if the deferred tax arises from the initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or
loss, it is not accounted for. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by
the Balance Sheet reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability
is settled.
Deferred tax liabilities are provided in full.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary
differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they
relate to items that are charged or credited directly to equity or other comprehensive income in which case the related deferred tax is also
charged or credited directly to equity or other comprehensive income.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Employment benefits
Provision is made in the financial information for all employee benefits. Liabilities for wages and salaries, including non-monetary benefit
and annual leave obliged to be settled within 12 months of the Balance Sheet reporting date, are recognised in accruals.
The Company’s contributions to defined contribution pension plans are charged to the Income Statement in the period to which the
contributions relate.
Equity and reserves
Equity and reserves comprises the following:
• ‘Share capital’ represents amounts subscribed for shares at nominal value.
• ‘Share premium’ represents amounts subscribed for share capital, net of issue costs, in excess of nominal value.
• ‘Capital redemption reserve’ represents the nominal value of re-purchased share capital.
• ‘Share based payment reserve’ represents the accumulated value of share-based payments expensed in the profit and loss.
• ‘Retained earnings’ represents the accumulated profits and losses attributable to equity shareholders.
Share-based employee remuneration
The Company operates share option-based remuneration plan for its employees. None of the Company’s plans are cash settled.
Where employees are rewarded using share-based payments, the fair value of employees’ services is determined indirectly by reference
to the fair value of the equity instruments granted. This fair value is appraised at the grant date using the Black-Scholes model.
All share-based remuneration is ultimately recognised as an expense in profit and loss with a corresponding credit to retained earnings.
The expense is allocated over the vesting period. Other than the requirement to be an employee at the point of exercise there are no other
vesting requirements and all share options are expected to become exercisable. Subsequent revisions to this give rise to an adjustment
to cumulative share-based compensation which is recognised in the current period. The number of vested options ultimately exercised by
holders does not impact the expense recorded in any period.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs, are allocated to share capital up
to the nominal (par) value of the shares issued with any excess being recorded as share premium.
ULS Technology Annual Report & Accounts 2020
79
Contingent liabilities
No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are
disclosed as contingent liabilities unless the outflow of resources is remote.
Judgements
Investment in Group Undertakings
The holding value of Legal-Eye Limited has been previously impaired. It is the judgement of the Board that no further impairment is
required in the current reporting period. Please also refer the Group’s principal accounting policies note looking at judgements and
CGUs which highlights that it is no longer possible to look at the investment in Legal-Eye Limited distinctly.
2. Investments
The Company holds the issued share capital of the following companies:
Company name
Principal activity
Class of
shares
Place of
incorporation and
operation
United Legal
Services Limited
Development and hosting of internet based software
applications for legal services businesses
Ordinary
UK
United Homes
Services Limited
Development and hosting of internet based software
applications for property services businesses
Ordinary
UK
Legal-Eye Limited
Compliance consultancy services for solicitors
Conveyancing
Alliance (Holdings)
Limited
Intermediary non-trading holding company
Ordinary
Ordinary
UK
UK
% ownership held
by the Company
2020
100
100
100
100
2019
100
100
100
100
Conveyancing
Alliance Limited
Development and hosting of internet based software
applications for legal services businesses
Ordinary
UK
100
100
Home Owners
Alliance Limited
Operation of website for home owners and
prospective home owners
Financial Eye
Limited
Financial compliance consultancy services
for solicitors
Ordinary
UK
Ordinary
UK
35
15
35
15
Home Owners Alliance Limited is considered to be an associate company and is accounted for accordingly.
Cost
As at 1 April 2018
Loan movement
Share-based payment reserve
As at 31 March 2019
Loan movement
Share-based payment reserve
As at 31 March 2020
Investments
in Group
undertakings
£000’s
Investments
in associates
£000’s
Loans to
associates
£000’s
16,639
–
62
16,701
–
78
16,779
575
–
–
575
–
–
575
200
–
–
200
50
–
250
Total
£000’s
17,414
–
62
17,476
50
78
17,604
Overview Strategic ReportGovernanceFinancial Statements 80
Notes to the Parent Company financial statements continued
3. Receivables
Current receivables:
Amounts owed by Group undertakings
Other debtors
Prepayments
During the year, other debtors relating to a loan to the EBT were impaired by £145,000.
Non-current receivables:
Prepayments
4. Trade and other payables
Trade payables
Amounts owed to Group undertakings
Social security and other taxes
Accruals
Deferred/contingent consideration
5. Borrowings
Current liabilities:
Bank loans
Non-current liabilities:
Bank loans
6. Share capital
2020
£000’s
267
130
117
514
2020
£000’s
30
2020
£000’s
33
219
35
39
–
326
2020
£000’s
5,000
2020
£000’s
750
2019
£000’s
19
264
84
367
2019
£000’s
39
2019
£000’s
65
1,063
37
44
2,224
3,433
2019
£000’s
3,000
2019
£000’s
1,750
Allotted, issued and fully paid
The Company has one class of Ordinary share which carries no right to fixed income nor has any preferences or restrictions attached.
Ordinary shares of £0.004 each
2020
No
64,871,276
64,871,276
£000’s
259
259
2019
No
64,828,057
64,828,057
£000’s
259
259
As regards income and capital distributions, all categories of shares rank pari passu as if the same constituted one class of share.
Shares issued and fully paid
Beginning of the year
New shares issue
Shares issued and fully paid
No new shares were issued during the year.
2020
Number
2019
Number
64,828,057
64,828,057
43,219
–
64,871,276
64,828,057
ULS Technology Annual Report & Accounts 2020
Allotments during the year
Year ended March 2020
Share issue
Year ended March 2019
Share issue
81
Number
43,219
Number
–
Par value
£000’s
–
Par value
£000’s
–
Ordinary share options:
The Company operates a share option scheme to which the Executive Directors and employees of the Group may be invited to
participate by the remuneration committee. Disclosures relating to the Company’s share options are detailed in note 18B to the
Group financial statements, there being no difference between the Company and Group disclosures.
7. Related party transactions
Related party transactions with third parties other than the Company’s subsidiaries are disclosed in note 27 to the Consolidated
Financial Statements.
8. Post Balance Sheet events
There have been no reportable subsequent events between 31 March 2020 and the date of signing this report.
9. Dividends paid
Final dividend for the year ended 31 March 2019 of 1.20p (2018: 1.15p) per share
1st Interim dividend 1.25p (2019: 1.20p) per share
Total dividends paid
2020
£000’s
774
807
1,581
2019
£000’s
741
774
1,515
The Directors have recommended that no final dividend be payable in respect of the year ended 31 March 2020.
Overview Strategic ReportGovernanceFinancial Statements
82
Company information
Directors
Martin Rowland – Chairman
Steve Goodall – Chief Executive Officer
John Williams – Chief Financial Officer
Andrew Weston – Co-founder and IT Director
Elaine Bucknor – Independent Non-Executive Director
Oliver Scott – Non-Executive Director
Nominated adviser & broker
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
Registered address
The Old Grammar School
Church Road
Thame
Oxfordshire
OX9 3AJ
Independent auditor
Grant Thornton UK LLP
3140 Rowan Place
John Smith Drive
Oxford Business Park South
Oxford
OX4 2WB
Company registration number
07466574
Solicitors
Eversheds Sutherland
One Wood Street
London
EC2V 7WS
Financial public relations
Walbrook PR Limited
4 Lombard Street
London
EC3V 9H
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
BN99 6DA
ULS Technology Annual Report & Accounts 2020
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The Old Grammar School
Church Road, Thame, OX9 3AJ
01844 262392
enquiries@ulstechnology.com
www.ulstechnology.com