Tip Update: Buy at 134.5p
- Tip style
- Risk rating
- LONG TERM
- Our previous tip
- We said BUY at 107p on 11 May 2017
- Tip performance to date
Flat transactional volume in the housing market should have been bad news for ULS Technology (ULS), but the online technology platform provider overcame this by increasing its market share. This helped to boost underlying cash profits by 25 per cent to £6.4m.
Headline profits were lower, but this was due to an increase in the estimated earnout payable on the December 2016 acquisition of Conveyancing Alliance Holdings (CAL) which put in a strong performance. Through CAL, ULS is now able to provide conveyancing to both smaller mortgage intermediaries and estate agents. It also has its own technology platform (Estateagent4me) to enable contact with home sellers before they are potentially sold conveyancing from the estate agent. Most of its revenue is generated from charging solicitors for business put their way through its platform.
ULS continued to invest in new technology. And as well as offering services to mortgage intermediaries, it also provides white labelled B2C conveyancing platforms, which enables its platform partners to offer conveyancing services directly to their customers such as Home Owners Alliance, where ULS has a 35 per cent stake. There is also a platform to help lenders with their remortgaging conveyancing, where ULS managed to increase its market share from 4.8 per cent to 6.1 per cent.
Analysts at Numis Securities are forecasting underlying pre-tax profits of £5.8m and EPS of 6.8p for the year to March 2019 (from £5.5m and 6.7p).
|ULS TECHNOLOGY (ULS)|
|ORD PRICE:||134.5p||MARKET VALUE:||£87m|
|TOUCH:||133-134.5p||12-MONTH HIGH:||161p||LOW: 116p|
|DIVIDEND YIELD:||1.7%||PE RATIO:||44|
|NET ASSET VALUE:||14p*||NET DEBT:||20%|
|Year to 31 Mar||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £17.7m, or 27p a share|