JARVIS SECURITIES PLC

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RNS Number : 8352R

Jarvis Securities plc

11 March 2021

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

11 March 2021

Jarvis Securities plc

("Jarvis" or "the Company" or "the Group")

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020

HIGHLIGHTS

· 43% increase in profit before tax

· 8% increase in year on year interest income

· 69% growth in interim dividend per share (excludes 2019 special dividend)

· 42% increase in EPS

CHAIRMAN'S STATEMENT

Few would have predicted how 2020 would unfold with Brexit and the COVID pandemic impacting industries in different ways. For stockbrokers trade volumes have increased, but it would be an oversimplification to attribute these excellent financial results to this alone. At the beginning of 2020 it felt like we were on the cusp of volumes returning to normal, and clearly they have exceeded that prediction. Over the past few years the business has continued to maintain its organic growth and commercial success as the following statement will disclose.

I expect our trade volumes to continue at higher levels than we experienced in 2020 and the years leading up to that. I also see no signs of organic growth slowing as we move into 2021 with a healthy pipeline of potential new outsourcing contracts. Client numbers and cash under administration continue to increase, we are seeing profitable growth in international settlement and our relationship with Primary Bid.

We undertook a 4:1 share split during the year to facilitate and encourage more liquidity in Jarvis shares and encourage a wider shareholder base. The business model remains unaltered - Jarvis will continue with a strategy of profitable organic growth whilst improving internal efficiencies. At present, many of our staff are working from home, which, whilst presenting some challenges also creates additional opportunities to review the way we operate where office space can be a restricting factor. I am proud of the fact we have been able to maintain our high standard of client service to both our retail and commercial clients in spite of the disruption caused by COVID. Our IT infrastructure has been constantly monitored and tailored to cope with the increased trade volumes and different working practices and our phone lines have remained open.

Historically the dividend policy has been relatively formulaic with a fixed proportion of profit after tax being retained within the business to maintain our level of FCA capital adequacy or re-investment where required. This retention accumulates and has then led to the payment of special dividends. We are required to retain regulatory capital far in excess of the normal working capital required to run the business, but in the absence of requirements for investment in the business it is the Directors' intention that cash will be paid out in dividends when available. The sale of Treasury shares has also added to the reserves available to be distributed over the period and this is likely to continue which should also increase the free float or liquidity of shares in the market.

As always, I would like to thank Jarvis staff for their continued hard work.

Andrew Grant

Chairman

Annual General Meeting

The Company will today dispatch to shareholders its Annual Report and Accounts for the year ended 31 December 2020, together with a notice convening the Annual General Meeting ("AGM"), to be held at the Company's offices on Thursday 22rd April at 9am. The Annual Report and Accounts and Notice of AGM will also be available from the Company's website, www.jarvissecurities.co.uk .

During the Covid-19 pandemic, the UK Government has introduced new laws to prevent individuals engaging in non-essential travel and attending public gatherings of more than six people, save where essential for work purposes. Having taken legal advice, the Board has concluded that, in these exceptional circumstances and for as long as the current restrictions remain in place, shareholders should not be permitted to attend the Annual General Meeting but instead will be asked to vote by proxy by appointing the Chairman of the meeting as their proxy. The Board has arranged for three persons to be physically present at the Annual General Meeting to meet the quorum obligations under the Company's articles of association but other than these individuals, no other shareholders will be allowed to attend.

Enquiries:

Jarvis Securities plc

Tel: 01892 510515

Andrew Grant

Jolyon Head

WH Ireland Limited

Tel: 0113 394 6619

Katy Mitchell

Darshan Patel

Consolidated income statement for the year ended 31 december 2020


		Year to	Year to
		31/12/20	31/12/19
	Notes

		£	£
Continuing operations:
Revenue	3	13,341,136	10,521,806

Administrative expenses Lease finance costs		(6,465,029) (5,993)	(5,708,739) (8,393)


Profit before income tax	5	6,870,114	4,804,674

Income tax charge	7	(1,310,424)	(893,944)


Profit for the period		5,559,691	3,910,730


Attributable to equity holders of the parent		5,559,691	3,910,730


Earnings per share	8	P	P

Basic and diluted		12.71	8.96

Consolidated statement of comprehensive income for the year


	Notes	Year to	Year to
		31/12/20	31/12/19
		£	£
Profit for the period		5,559,691	3,910,730
Total comprehensive income for the period		5,559,691	3,910,730
Attributable to equity holders of the parent		5,559,691	3,910,730

Consolidated STATEMENT OF FINANCIAL POSITION at 31 december 2020



		31/12/20	31/12/19
	Notes
		£	£
Assets
Non-current assets
Property, plant and equipment	9	379,814	461,471
Intangible assets	10	102,019	105,428
Goodwill	10	342,872	342,872
		824,705	909,771
Current assets
Trade and other receivables	12	6,923,154	3,373,427
Investments held for trading	14	4,183	4,600
Cash and cash equivalents	15	3,794,980	5,290,961
		10,722,317	8,668,988
Total assets		11,547,022	9,578,759

Equity and liabilities
Capital and reserves
Share capital	16	111,828	111,828
Share premium		1,655,640	1,576,669
Merger reserve		9,900	9,900
Capital redemption reserve		9,845	9,845
Retained earnings Own shares held in treasury	16	5,672,848 (886,113)	4,949,467 (981,136)
Total equity attributable to the equity holders of the parent		6,573,948	5,676,573
Non-current liabilities Deferred tax Lease liabilities	7 13	45,617 64,653	38,664 148,633
		110,270	187,297
Current liabilities
Trade and other payables	17	4,176,030	3,184,059
Lease liabilities	13	83,980	81,507
Income tax	17	602,794	449,323
		4,862,804	3,714,889
Total liabilities		4,973,074	3,902,186
Total equity and liabilities		11,547,022	9,578,759

CoMPANY STATEMENT OF FINANCIAL POSITION at 31 december 2020


		31/12/20	31/12/19
	Notes
		£	£
Assets
Non-current assets
Property, plant and equipment	9	379,814	461,471
Intangible assets	10	102,019	105,428
Goodwill	10	342,872	342,872
Investment in subsidiaries	11	284,239	284,239
		1,108,944	1,194,010
Current assets
Trade and other receivables	12	388,288	636,340
Cash and cash equivalents	15	2,222,469	2,181,403
		2,610,757	2,817,743
Total assets		3,719,701	4,011,753

Equity and liabilities
Capital and reserves
Share capital	16	111,828	111,828
Share premium		1,655,640	1,576,669
Capital redemption reserve		9,845	9,845
Retained earnings Own shares held in treasury	16	1,481,763 (886,113)	1,776,865 (981,136)
Total equity attributable to the equity holders		2,372,963	2,494,071
Non-current liabilities Deferred tax Lease liabilities	7 13	46,253 64,653	38,664 148,633
		110,906	187,297

Current liabilities
Trade and other payables Lease liabilities	17 13	801,020 83,980	891,435 81,507
Income tax	17	350,832	357,443
		1,235,832	1,330,385
Total liabilities		1,346,738	1,517,682
Total equity and liabilities		3,719,701	4,011,753

The parent company's profit for the financial year was £4,541,208 (2019: £3,946,513).

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


	Share capital	Share premium	Merger reserve	Capital redemption reserve	Retained earnings	Own shares held in Treasury	Total equity
	£	£	£	£	£	£	£
At 1 January 2019	111,828	1,576,669	9,900	9,845	5,523,363	(859,587)	6,372,018
Adjustment from the adoption of IFRS 16	-	-	-	-	(5,600)	-	(5,600)
Profit for the financial year Purchase of own shares held in treasury Sale of own shares held in treasury	- - -	- - -	- - -	- - -	3,910,730 - 23,254	- (227,002) 105,453	3,910,730 (227,002) 128,707
Dividends	-	-	-	-	(4,502,280)	-	(4,502,280)
At 31 December 2019	111,828	1,576,669	9,900	9,845	4,949,467	(981,136)	5,676,573
Profit for the financial year	-	-	-	-	5,559,691	-	5,559,691
Sale of own shares held in treasury	-	78,971	-	-	-	95,023	173,994
Dividends	-	-	-	-	(4,836,310)	-	(4,836,310)
At 31 December 2020	111,828	1,655,640	9,900	9,845	5,672,848	(886,113)	6,573,948

COMPANY STATEMENT OF CHANGES IN EQUITY


	Share capital	Share premium	Capital redemption reserve	Retained earnings	Own shares held in treasury	Total equity
	£	£	£	£	£	£
At 1 January 2019	111,828	1,576,669	9,845	2,314,978	(859,587)	3,153,733
Adjustment from the adoption of IFRS 16 Profit for the financial year	- -	- -	- -	(5,600) 3,946,513	- -	(5,600) 3,946,513
Purchase of own shares held in treasury Sale of own shares held in treasury Dividends	- - -	- - -	- - -	- 23,254 (4,502,280)	(227,002) 105,453 -	(227,002) 128,707 (4,502,280)
At 31 December 2019	111,828	1,576,669	9,845	1,776,865	(981,136)	2,494,071
Profit for the financial year	-	-	-	4,541,208	-	4,541,208
Sale of own shares held in treasury	-	78,971	-	-	95,023	173,994
Dividends	-	-	-	(4,836,310)		(4,836,310)
At 31 December 2020	111,828	1,655,640	9,845	1,481,763	(886,113)	2,372,963

statement OF cashflows for the year ended 31 december 2020


		CONSOLIDATED		COMPANY
		Year to	Year to	Year to	Year to
		31/12/20	31/12/19	31/12/20	31/12/19
	Notes
		£	£	£	£
Cash flow from operating activities
Profit before income tax		6,870,114	4,804,674	5,250,277	4,608,692
Depreciation and amortisation Lease finance cost	5	142,908 5,993	153,161 8,393	142,908 5,993	153,161 8,393
		7,019,015	4,966,228	5,399,178	4,770,246

(Increase) /Decrease in trade and other receivables		(3,465,602)	1,663,939	248,051	85,140
(Decrease) /Increase in trade payables		907,847	(308,217)	(90,415)	191,348
Cash generated from operations		4,461,260	6,321,950	5,556,814	5,046,734

Income tax (paid)/received		(1,150,000)	(891,251)	(708,090)	(661,251)
Net cash from operating activities		3,311,260	5,430,699	4,848,724	4,385,483

Cash flows from investing activities
Purchase of property, plant and equipment		(11,837)	(31,567)	(11,837)	(31,567)
Purchase of investments held for trading Proceeds from sale of investments held for trading Purchase of intangible assets		(1,060,177) 1,060,594 (46,005)	(758,021) 755,377 (72,925)	- - (46,005)	- - (72,925)
Cash flows from financing activities		(57,425)	(107,136)	(57,842)	(104,492)

Repurchase of ordinary share capital Sale of treasury shares Profit on sale of treasury shares Dividends paid Lease finance cost Repayment of finance leases		- 95,023 78,971 (4,836,310) (5,993) (81,507)	(227,002) 105,453 23,254 (4,502,280) (8,393) (79,107)	- 95,023 78,971 (4,836,310) (5,993) (81,507)	(227,002) 105,453 23,254 (4,502,280) (8,393) (79,107)
Net cash used in financing activities		(4,749,816)	(4,688,075)	(4,749,816)	(4,688,075)

Net (decrease)/ increase in cash & cash equivalents		(1,495,981)	635,488	41,066	(407,084)
Cash and cash equivalents at the start of the year		5,290,961	4,655,473	2,181,403	2,588,487
Cash and cash equivalents at the end of the year		3,794,980	5,290,961	2,222,469	2,181,403
Cash and cash equivalents:
Balance at bank and in hand		6,320,942	5,374,229	2,222,469	2,181,403
Cash held for settlement of market transactions		(2,525,962)	(83,268)	-	-
		3,794,980	5,290,961	2,222,469	2,181,403

NOTES FOR THE YEAR ENDED 31 DECEMBER 2020

1. Basis of preparation

The company has adopted the requirements of International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (EU) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets at fair value through profit or loss.

These financial statements have been prepared in accordance with the accounting policies set out below, which have been consistently applied to all the years presented.

New standards, not yet effective

There are no standards that are issued but not yet effective that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Significant judgements and estimates

The areas involving a high degree of judgement or complexity, or areas where the assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 20.

Going concern

The group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 2 to 5. The financial position of the group, its cash flows, liquidity position and borrowing facilities are described within these financial statements. In addition, note 26 of the financial statements includes the group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk.

The group has considerable financial resources, long term contracts with all its significant suppliers and a diversified income stream. The group does not have any current borrowing or any anticipated borrowing requirements. As a consequence, the directors believe that the group is well placed to manage its business risks successfully.

The directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

2. Accounting policies

(a) IFRS 15 'Revenue from Contracts with Customers'

Commission - the group charges commission on a transaction basis. Commission rates are fixed according to account type. When a client instructs us to act as an agent on their behalf (for the purchase or sale of securities) our commission is recognised as income on a point in time basis when the instruction is executed in the market. Our commission is deducted from the cash given to us by the client in order to settle the transaction on the client's behalf or from the proceeds of the sale in instance where a client sells securities.

Management fees - these are charged quarterly or bi-annually depending on account type. Fees are either fixed or are a percentage of the assets under administration. Management fees income is recognised over time as they are charged using a day count and most recent asset level basis as appropriate.

Interest income - this is accrued on a day count basis up until deposits mature and the interest income is received. The deposits pay a fixed rate of interest. In accordance with FCA requirements, deposits are only placed with banks that have been approved by our compliance department. Interest income is recognised over time as the deposits accrue interest on a daily basis.

(b) Basis of consolidation

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on which control ceases. The group financial statements consolidate the financial statements of Jarvis Securities plc, Jarvis Investment Management Limited, JIM Nominees Limited, Galleon Nominees Limited and Dudley Road Nominees Limited made up to 31 December 2020.

The Group uses the purchase method of accounting for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The cost of acquisition over the fair value of the Group's share of identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group's share of the net assets of the subsidiary acquired, the difference is recognised in the income statement.

Intra-group sales and profits are eliminated on consolidation and all sales and profit figures relate to external transactions only. No profit and loss account is presented for Jarvis Securities plc as provided by S408 of the Companies Act 2006.

All property, plant and equipment is shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is provided on cost in equal annual instalments over the lives of the assets at the following rates:

Leasehold improvements - 33% on cost, or over the lease period if less than 3 years

Office equipment - 20% on cost

Land & Buildings - Buildings are depreciated at 2% on cost. Land is not depreciated.

Right of use asset - Straight line basis over the lease period

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. Impairment reviews of property, plant and equipment are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

(d) Intangible assets

Intangible assets are carried at cost less accumulated amortisation. If acquired as part of a business combination the initial cost of the intangible asset is the fair value at the acquisition date. Amortisation is charged to administrative expenses within the income statement and provided on cost in equal annual instalments over the lives of the assets at the following rates:

Databases - 4% on cost

Customer relationships - 7% on cost

Software developments - 20% on cost

Website - 33% on cost

Impairment reviews of intangible assets are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

(e) Goodwill

Goodwill represents the excess of the fair value of the consideration given over the aggregate fair values of the net identifiable assets of the acquired trade and assets at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Any negative goodwill arising is credited to the income statement in full immediately.

(f) Deferred income tax

Deferred income tax is provided in full, using the liability method, on differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from 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 or taxable profit or loss. Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the timing difference is controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future.

(g) Segmental reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. The directors regard the operations of the Group as a single segment.

(h) Pensions

The group operates a defined contribution pension scheme. Contributions payable for the year are charged to the income statement.

(i) Trading balances

Trading balances incurred in the course of executing client transactions are measured at initial recognition at fair value. In accordance with market practice, certain balances with clients, Stock Exchange member firms and other counterparties are included as trade receivables and payables. The net balance is disclosed where there is a legal right of set off.

(j) Leases

The following was applicable in 2019. Costs in respect of operating leases are charged on a straight line basis over the lease term in arriving at the profit before income tax. Where the company has entered into finance leases, the obligations to the lessor are shown as part of borrowings and the rights in the corresponding assets are treated in the same way as owned fixed assets. Leases are regarded as finance leases where their terms transfer to the lessee substantially all the benefits and burdens of ownership other than right to legal title.

(k) Investments

Investments held for trading

Under IFRS investments held for trading are recognised as financial assets measured at fair value through profit and loss.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less provision for any impairment in value.

(l) Foreign exchange

The group offers settlement of trades in sterling as well as various foreign currencies. The group does not hold any assets or liabilities other than in sterling and converts client currency on matching terms to settlement of trades realising any currency gain or loss immediately in the income statement. Consequently the group has no foreign exchange risk.

(m) Share capital

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from proceeds, net of income tax. Where the company purchases its equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income tax), is deducted from equity attributable to the company's equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly incremental transaction costs and the related income tax effects, is included in equity attributable to the company's equity holders.

(n) Cash and cash equivalents

Cash and cash equivalents comprise:

Balance at bank and in hand - cash in hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash held for settlement of market transactions - this balance is cash generated through settlement activity, and can either be a surplus or a deficit. A surplus arises when settlement liabilities exceed settlement receivables. This surplus is temporary and is accounted for separately from the balance at bank and in hand as it is short term and will be required to meet settlement liabilities as they fall due. A deficit arises when settlement receivables exceed settlement liabilities. In this instance Jarvis will place its own funds in the client account to ensure CASS obligations are met. This deficit is also temporary and will reverse once settlement receivables are settled.

(o) Current income tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year.

(p) Dividend distribution

Dividend distribution to the company's shareholders is recognised as a liability in the group's financial statements in the period in which interim dividends are notified to shareholders and final dividends are approved by the company's shareholders.

(q) IFRS 9 'Financial Instruments'

The group currently calculates a "bad debt" provision on customer balances based on 25% of overdrawn client accounts which are one month past due date and are not specifically provided for. Under IFRS 9 this assessment is required to be calculated based on a forward - looking expected credit loss ('ECL') model, for which a simplified approach will be applied. The method uses historic customer data, alongside future economic conditions to calculate expected loss on receivables

(r) IFRS 16 'Leases'

The lease liability is measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implied in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.

The Group has applied judgement to determine the lease term for contracts with options to renew or exit early.

The carrying amount of right-of-use assets recognised was £404,863 at the lease start date of 27 September 2017. The retained earnings include a £5,600 transitional adjustment in respect of the modified retrospective approach.

A finance charge of 3% APR is used to calculate the finance cost of the lease.

3. Group revenue

The revenue of the group during the year was wholly in the United Kingdom and the revenue of the group for the year derives from the same class of business as noted in the Strategic Report.


	2020	2019
	£	£
Gross interest earned from treasury deposits, cash at bank and overdrawn client accounts	4,580,067	4,232,976
Commissions Fees	5,279,932 3,481,138	3,320,160 2,968,670
	13,341,136	10,521,806

4. Segmental information

All of the reported revenue and operational results for the period derive from the group's external customers and continuing financial services operations. All non-current assets are held within the United Kingdom.

The group is not reliant on any one customer and no customer accounts for more than 10% of the group's external revenues.

As noted in 2 (g) the directors regard the operations of the group as a single reporting segment on the basis there is only a single organisational unit that is reported to key management personnel for the purpose of performance assessment and future resource allocation.


5. Profit before income tax	2020	2019
Profit before income tax is stated after charging/(crediting):	£	£
Directors' emoluments Depreciation - right of use asset	723,545 80,973	671,690 80,973
Depreciation - owned assets	12,521	11,228
Amortisation (included within administrative expenses in the consolidated income statement)	49,414	60,960
Operating lease rentals - hire of machinery	8,852	8,842
Impairment of receivable charge	30,305	23,398
Bank transaction fees	91,462	68,734

Details of directors' annual remuneration as at 31 December 2020 are set out below:


		2020	2019
		£	£
Short-term employee benefits		654,362	589,642
Post-employment benefits		60,663	73,740
Benefits in kind		8,520	8,307
		723,545	671,690
Details of the highest paid director are as follows:
Aggregate emoluments		315,700	347,110
Company contributions to personal pension scheme		-	-
Benefits in kind		7,788	7,375
		323,488	354,485

	Emoluments & Benefits in kind	Pension	Total
Directors	£	£	£
Andrew J Grant	323,488	-	323,488
Nick J Crabb (resigned 6 July 2020)	83,015	24,109	107,124
Jolyon C Head	106,231	36,554	142,785
Graeme McAusland	26,000	-	26,000
TOTAL	538,734	60,663	599,397
During the year benefits accrued for two directors (2019: two directors) under a money purchase pension scheme. Nick Crabb received a payment in lieu of notice of £124,148 which is excluded in his emoluments for the current year. Staff Costs
The average number of persons employed by the group, including directors, during the year was as follows:
		2020	2019
Management and administration		61	57
The aggregate payroll costs of these persons were as follows:		£	£
Wages, salaries & social security		2,653,470	2,393,437
Pension contributions including salary sacrifice		93,766	102,923
		2,747,236	2,496,360

Key personnel

The directors disclosed above are considered to be the key management personnel of the group. The total amount of employers NIC paid on behalf of key personal was £85,159 (2019: 76,621).


6. Auditors' remuneration
During the year the company obtained the following services from the company's auditors as detailed below:
	2020	2019
	£	£
Fees payable to the company's auditors for the audit of the company's annual financial statements	25,000	24,150
Fees payable to the company's auditors and its associates for other services:
The audit of the company's subsidiaries, pursuant to legislation	9,000	9,000
Total audit fees	34,000	33,150
Taxation Compliance	5,000	4,800
	39,000	37,950

The audit costs of the subsidiaries were invoiced to and met by Jarvis Securities plc.


7. Income and deferred tax charges - group	2020	2019
	£	£
Based on the adjusted results for the year:
UK corporation tax	1,303,937	902,524
Adjustments in respect of prior years	(465)	(9,793)
Total current income tax	1,303,472	892,731
Deferred income tax:
Origination and reversal of timing differences	3,039	9,560
Adjustment in respect of prior years	(569)	(4,923)
Adjustment in respect of change in deferred tax rates	4,482	(3,424)
Total deferred tax charge	6,952	1,213
	1,310,424	893,944

The income tax assessed for the year is more than the standard rate of corporation tax in the UK (19%). The differences are explained below:

Profit before income tax

6,870,114

4,804,674

Profit before income tax multiplied by the standard rate of corporation tax in the UK of

19% (2019 - 19%)

1,305,322

912,889

Effects of:

Expenses not deductible for tax purposes

IFRS 16 transitional adjustment

1,486

(122)

Adjustments to tax charge in respect of previous years

(1,034)

(14,716)

Ineligible depreciation

Adjust in respect of change in deferred tax rate

Deferred tax timing differences

290

4,482

320

(3,424)

(1,125)

Current income tax charge for the years

1,310,424

893,944


Movement in (assets) / provision - group:
Provision at start of year	38,664	37,451
Deferred income tax charged in the year	6,953	1,213
Provision at end of year	45,617	38,664


Movement in (assets) / provision - company:
Provision at start of year	38,664	37,451
Deferred income tax charged in the year	7,589	1,213
Provision at end of year	46,523	38,664


8. Earnings per share	2020	2019
	£	£
Earnings: Earnings for the purposes of basic and diluted earnings per share
(profit for the period attributable to the equity holders of the parent)	5,559,691	3,910,730
Number of shares:
Weighted average number of ordinary shares for the purposes of basic earnings per share	43,739,085	43,675,884

	43,739,085	43,675,884

On 29 October 2020 there was a capital reorganisation whereby each of the company's issued and unissued ordinary shares of £0.01 each were subdivided into 4 ordinary shares of £0.0025 each. The 2019 figures have been adjusted to reflect this subdivision. Shares held in treasury are deducted for the purpose of calculating earnings per share.


9. Property, plant & equipment - group & company	Right of use assets - Leasehold	Leasehold & Property	Office Equipment	Total
Cost:		£	£	£
At 1 January 2019	-	222,450	264,716	487,166
Adjustments from the adoption of IFRS 16 Additions	303,648 -	- -	- 31,567	303,648 31,567
Disposals	-	-	-	-
At 31 December 2019	303,648	222,450	296,283	822,381
Additions	-	-	11,837	11,837
Disposals	-	-	-	-
At 31 December 2020	303,648	222,450	308,120	834,218
Depreciation:
At 1 January 2019	-	13,156	255,553	268,709
Charge for the year	80,973	1,949	9,279	92,201
On Disposal	-	-	-	-
At 31 December 2019	80,973	15,105	264,832	360,910
Charge for the year	80,973	1,949	10,572	93,494
On Disposal	-	-	-	-
At 31 December 2020	161,946	17,054	275,404	454,404
Net Book Value:
At 31 December 2020	141,702	205,396	32,716	379,814

At 31 December 2019	222,675	207,345	31,451	461,471

The net book value of non-depreciable land is £125,000 (2019: £125,000).


10. Intangible assets & goodwill - group & company		Intangible assets
	Goodwill	Customer Relationships	Databases	Software Development	Website	Total
	£	£	£	£	£	£
Cost:
At 1 January 2019	342,872	177,981	25,000	226,361	261,713	691,055
Additions	-	-	-	72,925	-	72,925
At 31 December 2019	342,872	177,981	25,000	299,286	261,713	763,980
Additions	-	-	-	46,005	-	46,005
At 31 December 2020	342,872	177,981	25,000	345,291	261,713	809,985
Amortisation:
At 1 January 2019	-	175,181	15,719	219,129	187,563	597,592
Charge for the year	-	2,800	1,000	19,470	37,690	60,960
At 31 December 2019	-	177,981	16,719	238,599	225,253	658,552
Charge for the year	-	-	1,000	20,289	28,125	49,414
At 31 December 2020	-	177,981	17,719	258,888	253,378	707,966
Net Book Value:
At 31 December 2020	342,872	-	7,281	86,403	8,335	102,019

At 31 December 2019	342,872	-	8,281	60,687	36,460	105,428

Goodwill represents the difference between the consideration paid and the fair value of assets acquired on the acquisition of a business in 2003. In accordance with the transitional provisions in IFRS 1 the group elected not to apply IFRS 3 retrospectively to past business combinations. Therefore the goodwill balance represents an acquired customer base, that continues to trade with the group to this day and, more fundamentally, systems, processes and a registration that dramatically reduced the group's dealing costs. These systems and the registration contributed significantly to turning the group into the low cost effective provider of execution only stockbroking solutions that it is today. The key assumptions used by the directors in their annual impairment review are that the company can benefit indefinitely from the reduced dealing costs and the company's current operational capacity remains unchanged. The recoverable amount of the goodwill has been assessed using the value in use method and there is significant headroom based on this calculation. There are no reasonable changes in assumptions that would cause the cash generating unit value to fall below its carrying amount.



11. Investments in subsidiaries	Company
	2020	2019
Unlisted Investments:	£	£
Cost:
At 1 January	284,239	284,239
As at 31 December	284,239	284,239


	Shareholding		Holding	Business
Jarvis Investment Management Limited	100%	25,000,000	1p Ordinary shares	Financial administration
Dudley Road Nominees Limited*	100%	2	£1 Ordinary shares	Dormant nominee company
JIM Nominees Limited*	100%	1	£1 Ordinary shares	Dormant nominee company
Galleon Nominees Limited*	100%	2	£1 Ordinary shares	Dormant nominee company

All subsidiaries are located in the United Kingdom and their registered office is 78 Mount Ephraim, Tunbridge Wells, Kent, TN4 8BS.

* indirectly held


12. Trade and other receivables	Group		Company

Amounts falling due within one year:	2020	2019	2020	2019
	£	£	£	£

Trade receivables	588,989	549,872	24,000	9,411
Settlement receivables	5,654,665	2,077,733	-	-
Other receivables	352,864	637,814	343,125	624,550
Prepayments and accrued income Other taxes and social security	326,636 -	108,009 -	14,984 6,179	2,010 369
	6,923,154	3,373,427	388,288	636,340

Settlement receivables are short term receivable amounts arising as a result of the settlement of trades in an agency capacity. The balances due are covered by stock collateral and bonds. An analysis of trade and settlement receivables past due is given in note 26. There are no amounts past due included within other receivables or prepayments and accrued income.

13. Leases

Lease liabilities are secured by the related underlying assets.


	2020
Amounts recognised in the statement of cash flows:
	£
Repayment of capital element of leases	81,507
	81,507

The undiscounted maturity analysis of lease liabilities as at 31 December 2020 is as follows:


	< 1 year (£)	1-2 years (£)	2-3 years (£)
Lease payment	87,500	65,625	-
Finance charge	3,520	972	-
Net present value	83,980	64,653	-

The undiscounted maturity analysis of lease liabilities as at 31 December 2019 is as follows:


	< 1 year (£)	1-2 years (£)	2-3 years (£)
Lease payment	87,500	87,500	65,625
Finance charge	5,993	3,520	972
Net present value	81,507	83,980	64,653


	2020
Lease liabilities included in the current statement of financial position
	£
Current	83,980
Non-current	64,653
	148,633

	2020
Amounts recognised in income statement	£
Interest on lease liabilities adopted under IFRS 16	5,993
	5,993

The company has a lease with Sion Properties Limited, a company controlled by A J Grant, for the rental of 78 Mount Ephraim, a self-contained office building. The lease has an annual rental of £87,500, being the market rate on an arm's length basis, and expires on 26 September 2027. The total cash outflow for leases in 2020 was £87,500. There is an option to terminate the lease on 26 September 2022 and therefore this is the discounted period.


14. Investments held for trading			Group				Company
			2020		2019		2020		2019
Listed Investments:			£		£		£		£
Valuation:
At 1 January			4,600		1,956		-		-
Additions			1,060,177		758,021		-		-
Disposals			(1,060,594)		(755,377)		-		-
As at 31 December			4,183		4,600		-		-
	Listed investments held for trading are stated at their market value at 31 December 2020 and are considered to be level one assets in accordance with IFRS 13. The group does not undertake any principal trading activity.
		15. Cash and cash equivalents		Group				Company
				2020		2019		2020		2019
				£		£		£		£
		Balance at bank and in hand - group/company		6,320,942		5,374,229		2,222,469		2,181,403
		Cash held for settlement of market transactions		(2,525,962)		(83,268)		-		-
				3,794,980		5,290,961		2,222,469		2,181,403

In addition to the balances shown above the group has segregated deposit and current accounts held in accordance with the client money rules of the Financial Conduct Authority. The group also has segregated deposits and current accounts on behalf of Counterparties and elected Professional clients of £2,111,321 (2019: £695,474) not governed by client money rules therefore they are also not included in the statement of financial position of the group. This treatment is appropriate as the business is a going concern however, were an administrator appointed, these balances would be considered assets of the business.


16. Share capital	2020	2019
Authorised: 64,000,000 Ordinary shares of 0.25p each	160,000 160,000	160,000 160,000

	2020	2019
	£	£
At 1 January 2020	111,828	111,828
Allotted, issued and fully paid:
44,731,000 (2019: 44,731,000) Ordinary shares of 1p each	111,828	111,828

The company has one class of ordinary shares which carry no right to fixed income.


17. Trade and other payables	Group		Company

Amounts falling due within one year:	2020	2019	2020	2019
	£	£	£	£

Trade payables	188,688	58,300	10,554	977
Settlement payables	2,997,247	1,892,926	-	-
Amount owed to group undertaking	-	-	750,866	840,458
Other taxes and social security	174,712	155,478	-	-
Other payables	566,654	561,738	-	-
Accruals	248,729	515,617	39,600	50,000
Trade and other payables Lease liabilities	4,176,030 83,980	3,184,059 81,507	801,020 83,980	891,435 81,507
Income tax	602,794	449,323	350,832	357,443
Total liabilities	4,862,804	3,714,889	1,235,832	1,330,385

Settlement payables are short term payable amounts arising as a result of settlement of trades in an agency capacity. Trade payables and other taxes and social security are all paid at the beginning of the month after the invoice was received or the liability created.


18. Dividends	2020	2019
	£	£
Interim dividends paid on Ordinary 1p shares	4,836,310	4,502,280
Dividend per Ordinary 1p share	11.06	10.31

Please refer to the directors' report for dividends declared post year end.

19. Financial Instruments

The group's principal financial instruments comprise cash, short terms borrowings and various items such as trade receivables, trade payables etc. that arise directly from operations. The main purpose of these financial instruments is the funding of the group's trading activities. Cash and cash equivalents and trade and other receivables are categorised as held at amortised cost, and trade and other payables are classified as held at amortised cost. Other than investments held for trading all financial assets and liabilities are held at amortised cost and their carrying value approximates to their fair value.

The main financial asset of the group is cash and cash equivalents which is denominated in Sterling and which is detailed in note 14. The group operates a low risk investment policy and surplus funds are placed on deposit with at least A rated banks or equivalent at floating interest rates.

The group also holds investments in equities, treasury shares and property.

20. Critical accounting estimates and judgements

The group makes estimates and assumptions concerning the future. These estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year relate to goodwill, intangible assets and bad debts.

The group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2 (e). These calculations require the use of estimates. The assumptions and sensitivity relating to the impairment tests are detailed in note 10.

The group considers at least annually whether there are indications that the carrying values of intangible assets may not be recoverable, or that the recoverable amounts may be less than the asset's carrying value, in which case an impairment review is performed. These calculations require the use of estimates. The group also calculates the implied levels of variables used in the calculations at which impairment would occur.

21. Immediate and ultimate parent undertaking

There is no immediate or ultimate controlling party.

22. Related party transactions

The company has a lease with Sion Properties Limited, a company controlled by a director of the company, for the rental of 78 Mount Ephraim, a self-contained office building. The lease has an annual rental of £87,500, being the market rate on an arm's length basis, and expires on 26 September 2027.

During the year Jarvis Investment Management Limited paid Jarvis Securities Plc £7,000 (2019: £7,000) for rental of a disaster recovery site.

Jarvis Securities plc owed Jarvis Investment Management Limited £750,866 (2019: £751,208) at year end.

During the year, directors, key staff and other related parties by virtue of control carried out share dealing transactions in the normal course of business. Commissions for such transactions are charged at various discounted rates. The impact of these transactions does not materially or significantly affect the financial position or performance of the company. At 31 December 2020, these same related parties had cash balances of £392,110 (2019: £1,307,212) and interest was earned during the year amounting to £923 (2019: £2,203). In addition to cash balances other equity assets of £49,950,739 (2019: £40,119,621) were held by JIM Nominees Ltd as custodian.

During the year Jarvis Securities Plc charged £3,869,812 (2019: £3,844,388) to Jarvis Investment Management Limited for use of intellectual properties.

23. Capital commitments

As of 31 December 2020, the company had no capital commitments (2019: nil).

24. Fair value estimation

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the company is the current bid price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values.

25. Financial risk management objectives and policies

The directors consider that their main risk management objective is to monitor and mitigate the key risks to the group, which are considered to be principally credit risk, compliance risk, liquidity risk and operational risk. Several high-level procedures are in place to enable all risks to be better controlled. These include detailed profit forecasts, cash flow forecasts, monthly management accounts and comparisons against forecast, regular meetings of the full board of directors, and more regular senior management meetings.

The group's main credit risk is exposure to the trading accounts of clients. This credit risk is controlled via the use of credit algorithms within the computer systems of the subsidiary. These credit limits prevent the processing of trades in excess of the available maximum permitted margin at 100% of the current portfolio value of a client.

A further credit risk exists in respect of trade receivables. The group's policy is to monitor trade and other receivables and avoid significant concentrations of credit risk. Aged receivables reports are reviewed regularly and significant items brought to the attention of senior management.

The compliance risk of the group is controlled through the use of robust policies, procedures, the segregation of tasks, internal reviews and systems controls. These processes are based upon the Rules and guidance notes of the Financial Conduct Authority and the London Stock Exchange and are overseen by the compliance officer together with the management team. In addition, regular compliance performance information is prepared, reviewed and distributed to management.

The group aims to fund its expansion plans mainly from existing cash balances without making use of bank loans or overdraft facilities. Financial risk is therefore mitigated by the maintenance of positive cash balances and by the regular review of the banks used by the group. Other risks, including operational, reputational and legal risks are under constant review at senior management level by the executive directors and senior managers at their regular meetings, and by the full board at their regular meetings.

The group derives a significant proportion of its revenue from interest earned on client cash deposits and does not have any borrowings. Hence, the directors do not consider the group to be materially exposed to interest rate risk in terms of the usual consideration of financing costs, but do note that there is a risk to earnings. Given the current Bank of England base rate is at its lowest level since its foundation in 1694, and the business has remained profitable, this risk is not considered material in terms of a threat to the long term prospects of the group.

The capital structure of the group consists of issued share capital, reserves and retained earnings. Jarvis Investment Management Limited has an Internal Capital Adequacy Assessment Process ("ICAAP"), as required by the Financial Conduct Authority ("FCA") for establishing the amount of regulatory capital to be held by that company. The ICAAP gives consideration to both current and projected financial and capital positions. The ICAAP is updated throughout the year to take account of any significant changes to business plans and any unexpected issues that may occur. The ICAAP is discussed and approved at a board meeting of the subsidiary at least annually. Capital adequacy is monitored daily by management. Jarvis Investment Management Limited uses the simplified approach to Credit Risk and the standardised approach for Operational Risk to calculate Pillar 1 requirements. Jarvis

Investment Management Limited observed the FCA's regulatory requirements throughout the period. Information disclosure under Pillar 3 of the Capital Requirements Directive is available from the group's websites.

The directors do not consider that the group is materially exposed to foreign exchange risk as the group does not run open currency positions beyond the end of each working day.

As of 31 December 2020, trade receivables of £159,784 (2019: £131,923) were past due and were impaired and partially provided for. The amount of the provision was £131,456 as at 31 December 2020 (2019: £101,539). The individually impaired receivables relate to clients who are in a loan position and who do not have adequate stock to cover these positions. The amount of the impairment is determined by clients' perceived willingness and ability to pay the debt, legal judgements obtained in respect of, charges secured on properties and payment plans in place and being adhered to. Where debts are determined to be irrecoverable, they are written off through the income and expenditure account. The group does not anticipate future write offs of uncollectable amounts will be significant as the group now imposes much more restrictive rules on clients who utilise extended settlement facilities.


	Group		Company
Provision of impairment of receivables:	2020	2019	2020	2019
	£	£	£	£

At 1 January	101,539	105,470	-	-
Charge / (credit) for the year	30,306	23,398	-	-
Uncollectable amounts written off	(389)	(27,329)	-	-
At 31 December	131,456	101,539	-	-

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