ULS.L Regulatory News (ULS)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

ULS Technology plc

("ULS", the "Company" or the "Group")

First Day of Dealings

ULS Technology plc, the provider of online B2B platforms for the UK conveyancing and financial intermediary markets, is pleased to announce its admission to trading on AIM at 08:00 UK time today. Dealings in the Group's ordinary shares will commence under the ticker AIM: ULS.

Summary

· The £12.1m Placing, comprising the sale of 18,713,750 shares and 11,536,250 new ordinary shares, has raised c. £4.6m (before expenses) for the Company at 40p per share ("the Placing Price"). The Placing has been arranged by Numis Securites Ltd

· The number of ordinary shares in issue immediately after admission will be 64,727,875, giving the Company a Market Capitalisation of c.£25.9m at the Placing Price

· New monies will be used to repay £1.85m of indebtedness, and continue to develop the Company's existing and new products

· The broader shareholder register is expected to improve the Group's appeal to potential customers

· Numis Securities Ltd is acting as the Company's Nominated Adviser & Broker

· ULS's trading symbol is ULS and the Company's ISIN code is GB00BNG8T458

About ULS

Founded in 2003 by Nigel Hoath and Andrew Weston, ULS provides a SaaS online comparison service for residential conveyancing and related legal services and online searches through its proprietary eConveyancer platform. The Group was one of the first providers in this market and the Directors believe that by being a first-mover, the Group has secured important and long-standing relationships with both distributors and solicitors. Currently ULS has over 7,500 mortgage brokers using its platform as well as over 150 solicitors and stands to benefit from increasing demand for online comparison services for residential conveyancing and related services. This demand is being driven by end customers wanting better value for money and distributors needing to demonstrate that they are treating their customers fairly.

Developed over the last 11 years, the Group's robust, award-winning platform is fully automated and accessed entirely online. This decreases the cost to the Group of each enquiry and enables it to service customers nationwide from a single office location. A fully automated service compares favourably to some of the Group's competitors, which the Directors believe still rely on a series of phone calls to their solicitor network to obtain quotes for customers, even when those enquiries originate via their websites.

ULS's focus is on increasing end-customer satisfaction and this approach has been central to the Group's success to date. ULS takes an active role in managing the service provided to end customers by promoting excellence in service delivery from the Group's panel of solicitors, tracking the progress of transactions and managing end customer concerns. ULS also provides analytics that allow solicitors to evaluate how competitive their pricing is, thereby increasing pricing transparency and competitiveness. All these measures have resulted in high levels of customer satisfaction and end-customers further benefit as they pay no conveyancing fee if a transaction aborts, which is not always typical of the market.

Key Facts

· Benefits from first-mover advantage for the provision of online comparison services for residential conveyancing as well as related legal services and online searches

· SaaS delivered fully automated platform minimises costs to the Group and compares favourably to competitors

· Operates in the large and growing market of UK residential conveyancing valued at c. £1.6 billion per year

· Scalable platform with theoretically no limit to number of users that can access it at a given time allows for significant operational gearing as transaction volumes increase

· Ability to enhance and adapt quickly with platform developed in modular manner to enable seamless launch of new services and features

· Increased market share of UK conveyancing completions from c. 2.6 per cent. in FY 2012 to c. 4.5 per cent. in FY 2014 (data collated from the Council of Mortgage Lenders' Regulated Mortgage Survey). The Group estimates that in FY 2014 82% of its growth was driven by increasing market share and 18% as a result of growth in the conveyancing market in which it operates

· High margin incremental revenues with EBTIDA margin of 18% in year ended 31 March 2014

· Revenues increased five-fold from FY10 to FY14 with revenue of £16.3m for year to 31 March 2014

· Four year track record of profit growth and cash generation

· Strong visibility over financial performance three months in advance

· 4 year contract recently signed with key distributor

· Efficient capital model with negative working capital position maintained for the past two years

· Expected to be dividend paying

Market Overview

ULS operates in a large and growing market with UK residential conveyancing estimated at approximately £1.6 billion per year. UK residential property transactions of 0.27 million in Q1 2014 were up 30% on Q1 2013 and are still some way off historic highs of 0.44 million in Q3 2007. The Group is also well positioned to benefit from the following market drivers:

· Adoption of online conveyancing services is increasing as it allows mortgage brokers and other intermediaries to offer clients a broader range of conveyancing providers. This can assist intermediaries in demonstrating compliance with regulations, reducing time to complete the sales process and generating multiple sales from clients.

· Deregulation of legal services is resulting in an increasingly open and competitive conveyancing market.

Strategy and Growth Opportunities

ULS's strategy is to continue to increase its share of the UK conveyancing market by increased use of its eConveyancer platform within its existing distribution network and by securing new distributers. In addition, the Group aims to continue to develop new disruptive services in conjunction with existing B2B clients. Growth opportunities include:

· New products and services are continually being developed by the Group with 30% of headcount dedicated to development. Over the medium term ULS is expected to introduce the following:

o An estate agency comparison platform due to launch in 2015

o A standalone search platform for conveyancers whether or not on ULS's conveyancer panel

o Other services including an online price comparison website for probate

· Improvements to the core platform. eConveyancer2 is being developed to replace the core platform and will include improved functionality and features expected to enhance the customer experience

Reasons for Admission and Use of Proceeds

The Directors consider that Admission is an important step in the Group's development and will assist the growth of its business and improve the Group's profile with potential customers. Admission has also reduced the equity stake of LDC (private equity arm of Lloyds Banking Group) to below 20 per cent. thereby reinforcing the Group's independence.

New monies will be used to repay £1.85m of indebtedness and to continue to develop the Company's existing and new products, specifically in developing the new standalone search platform for conveyancers and the estate agency comparison web site.

Current trading and prospects

The Directors are pleased with the Group's performance during the current year to date, which has been in line with their expectations. The Group has continued to grow significantly, with revenue increasing by approximately 31 per cent. and profit before tax increasing by approximately 70 per cent. compared to the first two months of the year ended 31 March 2014. The Directors believe this is the result of both increasing market share and greater activity in the market. Gross margin was approximately 1 per cent. higher than the same period last year. The Directors are confident in the Group's future prospects.

Board

The Board currently comprises three Executive Directors and two Non-Executive Directors. Brief biographies of the Directors are set out below.

Peter Opperman (aged 53) - Independent Non-Executive Chairman

Peter joined the Company in January 2011 at the point that LDC invested in the business. Peter has spent the last twenty years in executive and non-executive roles working in private equity backed businesses. He was until 1 July 2014 deputy chairman of GVA Grimley Limited which has been acquired by Bilfinger SE in 2014. Prior to this, he was Chairman of Leasedrive Group Limited which was recently sold to HgCapital, and during his time as Chairman, operating profits increased from £5m to £14m. Previous non-executive appointments include Porterbrook Leasing and Time Out.

Nigel Hoath (aged 47) - Co-founder and Managing Director

Nigel co-founded ULS Limited, the initial company in the Group, in 2003. He has over 30 years' experience, having worked in the financial services sector. Nigel started in Equity and Law followed by Clerical Medical and Scottish Amicable before qualifying as a financial adviser and starting his first business, Hoath Independent, in 1994. In 2000, Nigel then founded United Surveyors Ltd (he sold 60 per cent. to Countrywide in 2011) and then in 2007 co-founded ehips Ltd (now United Home Services Ltd, part of the Group). LDC backed Nigel in 2011 to grow the Group.

John Williams (aged 47) - Finance Director

John joined the business in January 2011 at the point of LDC's investment in the Group. 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. He is a Chartered Accountant, having qualified with Ernst & Young before gaining blue-chip experience with Motorola in a number of roles.

Andrew Weston (aged 46) - Co-founder and IT Director

Andrew co-founded ULS Limited in 2003. He started his career developing and implementing software solutions at PE International plc and Vintner Computer Systems. He has founded his own businesses: Weston Computing, founded in 1995 and incorporated in 2000; and Weston Technology, founded and incorporated in 2000. Andrew has spent the last 11 years building property, financial and legal services applications for the Group and also cofounded ehips Ltd in 2007.

Geoff Wicks (aged 65) - Independent Non-Executive Director

Geoff Wicks was CEO of Group NBT plc, a specialist in online brand protection and digital asset management, from 2001 until he led the sale of the business to HgCapital in 2011. He remained as part of the Group NBT business, now renamed NetNames, as a non-executive director until 2013. Geoff spent much of his earlier career at Reuters, including heading divisions in the UK, France and Nordic regions and latterly was director of corporate communications. Prior to Reuters, Geoff worked in the banking and insurance industries.

Dividend

The business model of the Group requires relatively low levels of additional capital as it grows and is highly cash generative. This being the case, the Board intends to adopt a progressive dividend policy, subject to the retention of funds needed to fund future growth of the Group's business and its strategic aims.

The Directors propose to pay an interim dividend equal to one half of the total aggregate annual dividend following the publication of the Group's interim accounts, with the balance being paid as a final dividend. A dividend is expected to be proposed by the Group at the time of the Group's interim results for the six months to 30 September 2014 on a pro rata basis for the period following Admission and paid by the end of December 2014.

Timetable of principal events

Each of the times and dates in the above timetable is subject to change without further notice. References to all times are to London time.

The Company will trade under the ticker ULS.

Enquiries:

IMPORTANT NOTICE

This announcement does not constitute an offer to sell, or a solicitation of an offer to buy ordinary shares in any jurisdiction in which such offer or solicitation is unlawful. In particular, this announcement is not for release, publication or distribution in or into the United States of America, Canada, Australia, Japan, the Republic of South Africa or any other jurisdiction in which such release, publication or distribution would be unlawful. The ordinary shares have not been and will not be registered under the United States Securities Act of 1933, as amended, any state securities laws in the United States or any securities laws of Canada, Australia, the Republic of South Africa, Japan or in any country, territory or possession where to offer them without doing do so may contravene local securities laws or regulations. Accordingly, the ordinary shares may not, subject to certain limited exceptions, be offered or sold, directly or indirectly, in the United States, Canada, Australia, the Republic of South Africa or Japan or to, or for the account or benefit of, any person in, or any national, citizen or resident of the United States of America, Canada, Australia, Japan or the Republic of South Africa. The distribution of this announcement outside the United Kingdom may be restricted by law and therefore persons outside the United Kingdom into whose possession this announcement comes should inform themselves about and observe any restrictions as to the placing, the ordinary shares or the distribution of this announcement.

This announcement is directed only at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments and are: (i) if in a member state of the European Economic Area, qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive ("Qualified Investors"); or (ii) if in the United Kingdom, Qualified Investors and fall within: (a) article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (b) article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order (all such persons together being referred to as "Relevant Persons"). The term "Prospectus Directive" means Directive 2003/71/EC as amended and includes any relevant implementing measures in each member state of the European Economic Area.

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This announcement does not itself constitute an offer for sale or subscription of any securities in the Company.

Numis Securities Limited ("Numis') is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA') and is advising the Company and no one else in connection with the placing and the Company's admission to AIM ("Admission') (whether or not a recipient of this announcement), and is acting exclusively for the Company as nominated adviser and broker for the purpose of the AIM Rules for Companies.

Numis will not be responsible to any person other than the Company for providing the protections afforded to its customers, nor for providing advice in relation to the placing and Admission or the contents of this announcement. In particular, the information contained in this announcement has been prepared solely for the purposes of the placing and Admission and is not intended to inform or be relied upon by any subsequent purchasers of ordinary shares (whether on or off exchange) and accordingly no duty of care is accepted in relation to them. Without limiting the statutory rights of any person to whom this announcement is issued, no representation or warranty, express or implied, is made by Numis as to the contents of this announcement. No liability whatsoever is accepted by Numis for the accuracy of any information or opinions contained in this announcement, for which the directors of the Company are solely responsible, or for the omission of any information from this announcement for which it is not responsible.

FORWARD-LOOKING STATEMENTS

This announcement contains forward looking statements relating to the Company's future prospects, developments and strategies, which have been made after due and careful enquiry and are based on the directors of the Company's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Forward-looking statements are identified by their use of terms and phrases such as "believe", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions. The directors of the Company believe that the expectations reflected in these statements are reasonable, but may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward-looking statement speaks only as of the date of the particular statement.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

Neither the content of the Company's website nor any website accessible by hyperlink s on the Company's website is incorporated in, or forms part of, this announcement.