JARVIS SECURITIES PLC

National Storage Mechanism | Additional information

RNS Number : 1829E

Jarvis Securities plc

10 March 2022

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.

10 March 2022

Jarvis Securities plc

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

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021

HIGHLIGHTS

· 12% increase in profit before tax

· 22% growth in interim dividend per share (excludes 2021 special dividend)

· 9% increase in EPS

CHAIRMAN'S STATEMENT

It pleases me greatly that for the 3rd year running I am commenting on another record-breaking set of results. Our 2020 figures may have been viewed as a pandemic related "one off" but improving on those in 2021 indicates that given favourable market conditions they can be bettered. Given current global events this may prove a challenge in the short term, but the fundamental outlook for the business remains positive.

2021 was very much a year of two halves, with trade volumes high in the first five months but then tailed off in the second half as markets generally became quieter. Overall, the general trend for our settlement and transaction volume continues upwards. Market sentiment can however in the short term overshadow the long-term growth being achieved and future outlook for the business. The cash balances held under administration have continued to grow, but in 2021 we saw the average interest rate achieved on deposits continue to fall. We are now seeing an upward turn and rates earned on new funds are back up to a level not seen for over two years and further increases seem very likely. Looking to 2022 and beyond, my view is that monetary policy is entering a new phase and one which Jarvis is well positioned to benefit from. Much of the cash we administer is maturing in the short term and will be available to capture increases in rates as they materialise. Added to this interest income has minimal associated marginal costs.

Against this positive outlook we are experiencing cost increases from many of our suppliers. Some of these have been passed onto our commercial customers, however we would prefer to offset these cost increases through continued growth in order to maintain our competitive pricing model.

We intend to continue growing the business organically and return profits to shareholders where regulatory capital and cashflow permit. We were able to pay a special dividend to shareholders in 2021 through the cancellation of the share premium reserve. This was not an expensive exercise though it did require High Court approval so some legal costs were incurred but it allowed us to pay out reserves that had built up in the business. Much of the cash for this transaction was generated from the profitable sale of treasury shares purchased. The Board retains the authority to purchase shares to be held in treasury and may repurchase shares if considered to be in stakeholders' interests.

We have a diversified revenue stream which allows the business to perform in changing market conditions so I continue to be optimistic that the business will continue to thrive.

As always, I would like to thank the staff at Jarvis 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 2021, together with a notice convening the Annual General Meeting ("AGM"), to be held at the Company's offices on Thursday 21st 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 .

Enquiries:

Jarvis Securities plc

Tel: 01892 510515

Andrew Grant

Jolyon Head

WH Ireland Limited

Tel: 0113 394 6618

Katy Mitchell

Darshan Patel

Consolidated income statement for the year ended 31 december 2021


		Year to	Year to
		31/12/21	31/12/20
	Notes

		£	£
Continuing operations:
Revenue	3	14,297,263	13,341,136

Administrative expenses Lease finance costs		(6,632,746) (3,520)	(6,465,029) (5,993)


Profit before income tax	5	7,660,997	6,870,114

Income tax charge	7	(1,480,146)	(1,310,424)


Profit for the period		6,180,851	5,559,691


Attributable to equity holders of the parent		6,180,851	5,559,691


Earnings per share	8	P	P

Basic and diluted		13.91	12.72

Consolidated statement of comprehensive income for the year


	Notes	Year to	Year to
		31/12/21	31/12/20
		£	£
Profit for the period		6,180,851	5,559,691
Total comprehensive income for the period		6,180,851	5,559,691
Attributable to equity holders of the parent		6,180,851	5,559,691

Company No.: 5107012

Consolidated STATEMENT OF FINANCIAL POSITION at 31 december 2021



		31/12/21	31/12/20
	Notes
		£	£
Assets
Non-current assets
Property, plant and equipment	9	295,767	379,814
Intangible assets	10	93,606	102,019
Goodwill	10	342,872	342,872
		732,245	824,705
Current assets
Trade and other receivables	12	6,361,707	6,923,154
Investments held for trading	14	1,958	4,183
Cash and cash equivalents	15	3,780,594	3,794,980
		10,144,259	10,722,317
Total assets		10,876,504	11,547,022

Equity and liabilities
Capital and reserves
Share capital	16	111,828	111,828
Share premium		-	1,655,640
Merger reserve		9,900	9,900
Capital redemption reserve		9,845	9,845
Retained earnings Own shares held in treasury	16	5,014,456 -	5,672,848 (886,113)
Total equity attributable to the equity holders of the parent		5,146,029	6,573,948
Non-current liabilities Deferred tax Lease liabilities	7 13	61,928 -	45,617 64,653
		61,928	110,270
Current liabilities
Trade and other payables	17	4,900,444	4,176,030
Lease liabilities	13	64,653	83,980
Income tax	17	703,450	602,794
		5,668,547	4,862,804
Total liabilities		5,730,475	4,973,074
Total equity and liabilities		10,876,504	11,547,022

Company No.: 5107012

CoMPANY STATEMENT OF FINANCIAL POSITION at 31 december 2021


		31/12/21	31/12/20
	Notes
		£	£
Assets
Non-current assets
Property, plant and equipment	9	295,767	379,814
Intangible assets	10	93,606	102,019
Goodwill	10	342,872	342,872
Investment in subsidiaries	11	284,239	284,239
		1,016,484	1,108,944
Current assets
Trade and other receivables	12	138,958	388,288
Cash and cash equivalents	15	2,329,510	2,222,469
		2,468,468	2,610,757
Total assets		3,484,952	3,719,701

Equity and liabilities
Capital and reserves
Share capital	16	111,828	111,828
Share premium		-	1,655,640
Capital redemption reserve		9,845	9,845
Retained earnings Own shares held in treasury	16	400,083 -	1,481,763 (886,113)
Total equity attributable to the equity holders		521,756	2,372,963
Non-current liabilities Deferred tax Lease liabilities	7 13	62,847 -	46,253 64,653
		62,847	110,906

Current liabilities
Trade and other payables Lease liabilities	17 13	2,427,462 64,653	801,020 83,980
Income tax	17	408,234	350,832
		2,900,349	1,235,832
Total liabilities		2,963,196	1,346,738
Total equity and liabilities		3,484,952	3,719,701

The parent company's profit for the financial year was £5,757,563 (2020: £4,541,208).

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 2020	111,828	1,576,669	9,900	9,845	4,949,467	(981,136)	5,676,573
Profit for the financial year Sale of own shares held in treasury	- -	- 78,971	- -	- -	5,559,691 -	- 95,023	5,559,691 173,994
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
Profit for the financial year Sale of own shares held in treasury	- -	- 1,412,372	- -	- -	6,180,851 (95,834)	- 886,113	6,180,851 2,202,651
Cancellation of share premium	-	(3,068,012)	-	-	3,068,012	-	-
Dividends	-	-	-	-	(9,811,421)	-	(9,811,421)
At 31 December 2021	111,828	-	9,900	9,845	5,014,456	-	5,146,029

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 2020	111,828	1,576,669		9,845		1,776,865		(981,136)		2,494,071
Profit for the financial year Sale of own shares held in treasury Dividends	- - -	- 78,971 -		- - -		4,541,208 - (4,836,310)		- 95,023 -		4,541,208 173,994 (4,836,310)
At 31 December 2020	111,828	1,655,640		9,845		1,481,763		(886,113)		2,372,963
Profit for the financial year	-	-		-		5,757,563		-		5,757,563
Sale of own shares held in treasury	-	1,412,372		-		(95,834)		886,113		2,202,651
Cancellation of share premium	-	(3,068,012)		-		3,068,012		-		-
Dividends	-	-		-		(9,811,421)		-		(9,811,421)
At 31 December 2021	111,828	-		9,845		400,083		-		521,756

statement OF cashflows

for the year ended 31 december 2021


		CONSOLIDATED		COMPANY
		Year to	Year to	Year to	Year to
		31/12/21	31/12/20	31/12/21	31/12/20
	Notes
		£	£	£	£
Cash flow from operating activities
Profit before income tax		7,660,997	6,870,114	6,364,617	5,250,277
Depreciation and amortisation Lease finance cost	5	127,433 3,520	142,908 5,993	127,433 3,520	142,908 5,993
		7,791,950	7,019,015	6,495,570	5,399,178

(Increase) /Decrease in trade and other receivables		566,607	(3,465,602)	249,330	248,051
(Decrease) /Increase in trade payables		719,254	907,847	1,626,443	(90,415)
Cash generated from operations		9,077,811	4,461,260	8,371,343	5,556,814

Income tax (paid)/received		(1,363,179)	(1,150,000)	(533,059)	(708,090)
Net cash from operating activities		7,714,632	3,311,260	7,838,284	4,848,724

Cash flows from investing activities
Purchase of property, plant and equipment		(11,296)	(11,837)	(11,296)	(11,837)
Purchase of investments held for trading Proceeds from sale of investments held for trading Purchase of intangible assets		(1,272,780) 1,275,005 (23,677)	(1,060,177) 1,060,594 (46,005)	- - (23,677)	- - (46,005)
Cash flows from financing activities		(32,748)	(57,425)	(34,973)	(57,842)

Sale of treasury shares Dividends paid Lease finance cost Repayment of lease liability		2,202,651 (9,811,421) (3,520) (83,980)	173,994 (4,836,310) (5,993) (81,507)	2,202,651 (9,811,421) (3,520) (83,980)	173,994 (4,836,310) (5,993) (81,507)
Net cash used in financing activities		(7,696,270)	(4,749,816)	(7,696,270)	(4,749,816)

Net (decrease)/ increase in cash & cash equivalents		(14,386)	(1,495,981)	107,041	41,066
Cash and cash equivalents at the start of the year		3,794,980	5,290,961	2,222,469	2,181,403
Cash and cash equivalents at the end of the year		3,780,594	3,794,980	2,329,510	2,222,469
Cash and cash equivalents:
Balance at bank and in hand		4,864,077	6,320,942	2,329,510	2,222,469
Cash held for settlement of market transactions		(1,083,483)	(2,525,962)	-	-
		3,780,594	3,794,980	2,329,510	2,222,469

1. Basis of preparation

The company has adopted the requirements of international accounting standards as adopted by the United Kingdom 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 25 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 2021.

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 non-controlling 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 year end 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) 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.

(j) 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.

(k) 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.

(l) 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 year end 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.

(m) 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.

(n) 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

(o) 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. 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.


	2021	2020
	£	£
Gross interest earned from treasury deposits, cash at bank and overdrawn client accounts	4,512,260	4,580,067
Commissions Fees	5,926,669 3,858,334	5,279,932 3,481,138
	14,297,263	13,341,136

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	2021	2020
Profit before income tax is stated after charging/(crediting):	£	£
Directors' emoluments Depreciation - right of use asset	491,426 80,973	723,545 80,973
Depreciation - owned assets	14,370	12,521
Amortisation (included within administrative expenses in the consolidated income statement)	32,090	49,414
Low value leases	8,852	8,852
Impairment of receivable charge	13,152	30,305
Bank transaction fees	121,957	91,462

Details of directors' annual remuneration as at 31 December 2021 are set out below:


		2021	2020
		£	£
Short-term employee benefits		438,850	654,362
Post-employment benefits		44,043	60,663
Benefits in kind		8,533	8,520
		491,426	723,545
Details of the highest paid director are as follows:
Aggregate emoluments		315,700	315,700
Company contributions to personal pension scheme		-	-
Benefits in kind		8,533	7,788
		324,233	323,488

	Emoluments & Benefits in kind	Pension	Total
Directors	£	£	£
Andrew J Grant	324,233	-	324,233
Jolyon C Head	98,650	44,043	142,693
G S McAusland (resigned 31 March 2021)	6,500	-	6,500
S M Middleton (appointed 1 April 2021)	18,000	-	18,000
TOTAL	447,383	44,043	491,426
During the year benefits accrued for one director (2020: two directors) under a money purchase pension scheme.

Staff Costs The average number of persons employed by the group, including directors, during the year was as follows:
		2021	2020
Management and administration		63	61
The aggregate payroll costs of these persons were as follows:		£	£
Wages, salaries & social security		2,487,787	2,653,470
Pension contributions including salary sacrifice		78,831	93,766
		2,566,618	2,747,236

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 £56,835 (2020: 85,159).


6. Auditors' remuneration
During the year the company obtained the following services from the company's auditors as detailed below:
	2021	2020
	£	£
Fees payable to the company's auditors for the audit of the company's annual financial statements	26,000	25,000
Fees payable to the company's auditors and its associates for other services:
The audit of the company's subsidiaries, pursuant to legislation	10,000	9,000
Total audit fees	36,000	34,000
Taxation Compliance	5,500	5,000
	41,500	39,000

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



7. Income and deferred tax charges - group	2021	2020
	£	£
Based on the adjusted results for the year:
UK corporation tax	1,463,681	1,303,937
Adjustments in respect of prior years	154	(465)
Total current income tax	1,463,835	1,303,472
Deferred income tax:
Origination and reversal of timing differences	2,052	3,039
Adjustment in respect of prior years	(126)	(569)
Adjustment in respect of change in deferred tax rates	14,386	4,482
Total deferred tax charge	16,312	6,952
	1,480,146	1,310,424

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

7,660,997

6,870,114

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

19% (2020 - 19%)

1,455,589

1,305,322

Effects of:

Expenses not deductible for tax purposes

IFRS 16 transitional adjustment

9,346

1,486

(122)

Adjustments to tax charge in respect of previous years

(1,034)

Ineligible depreciation

Adjust in respect of change in deferred tax rate

320

14,863

290

4,482

Current income tax charge for the years

1,480,146

1,310,424


Movement in (assets) / provision - group:
Provision at start of year	45,617	38,664
Deferred income tax charged in the year	16,311	6,953
Provision at end of year	61,928	45,617


Movement in (assets) / provision - company:
Provision at start of year	46,253	38,664
Deferred income tax charged in the year	16,594	7,589
Provision at end of year	62,847	46,523


8. Earnings per share	2021	2020
	£	£
Earnings: Earnings for the purposes of basic and diluted earnings per share
(profit for the period attributable to the equity holders of the parent)	6,180,851	5,559,691
Number of shares:
Weighted average number of ordinary shares for the purposes of basic earnings per share	44,419,318	43,739,085

	44,419,318	43,739,085

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 2020 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 2020	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
Additions	-	-	11,296	11,296
Disposals	-	-	-	-
At 31 December 2021	303,648	222,450	319,416	845,514
Depreciation:
At 1 January 2020	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
Charge for the year	80,973	1,949	12,421	95,343
On Disposal	-	-	-	-
At 31 December 2021	242,919	19,003	287,825	549,747
Net Book Value:
At 31 December 2021	60,729	203,447	31,591	295,767

At 31 December 2020	141,702	205,396	32,716	379,814

The net book value of non-depreciable land is £125,000 (2020: £125,000).


10. Intangible assets & goodwill - group & company		Intangible assets
	Goodwill	Customer Relationships	Databases	Software Development	Website	Total
	£	£	£	£	£	£
Cost:
At 1 January 2020	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
Additions	-	-	-	23,677	-	23,677
At 31 December 2021	342,872	177,981	25,000	368,968	261,713	833,662
Amortisation:
At 1 January 2020	-	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
Charge for the year	-	-	1,000	27,752	3,338	32,090
At 31 December 2021	-	177,981	18,719	286,640	256,716	740,056
Net Book Value:
At 31 December 2021	342,872	-	6,281	82,328	4,997	93,606

At 31 December 2020	342,872	-	7,281	86,403	8,335	102,019

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
	2021	2020
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:	2021	2020	2021	2020
	£	£	£	£

Trade receivables	1,504,513	588,989	-	24,000
Settlement receivables	4,365,820	5,654,665	-	-
Other receivables	128,183	352,864	122,265	343,125
Prepayments and accrued income Other taxes and social security	363,191 -	326,636 -	15,673 1,020	14,984 6,179
	6,361,707	6,923,154	138,958	388,288

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 25. 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.

The undiscounted maturity analysis of lease liabilities as at 31 December 2021 is as follows:


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

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	-


	2021
Lease liabilities included in the current statement of financial position	£
Current	64,653
Non-current	-
	64,653

	2021
	£
Amounts recognised in income statement	3,520
	3,520

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 2021 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
			2021		2020		2021		2020
Listed Investments:			£		£		£		£
Valuation:
At 1 January			4,183		4,600		-		-
Additions			1,272,780		1,060,177		-		-
Disposals			(1,275,005)		(1,060,594)		-		-
As at 31 December			1,958		4,183		-		-
	Listed investments held for trading are stated at their market value at 31 December 2021 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
				2021		2020		2021		2020
				£		£		£		£
		Balance at bank and in hand - group/company		4,864,077		6,320,942		2,329,510		2,222,469
		Cash held for settlement of market transactions		(1,083,483)		(2,525,962)		-		-
				3,780,594		3,794,980		2,329,510		2,222,469

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 model B customers of £1,527,547 (2020: £2,111,321) 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	2021	2020
Authorised: 64,000,000 Ordinary shares of 0.25p each	160,000 160,000	160,000 160,000

	2021	2020
	£	£
At 1 January 2021	111,828	111,828
Allotted, issued and fully paid:
44,731,000 (2020: 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:	2021	2020	2021	2020
	£	£	£	£

Trade payables	383,364	188,688	1,015	10,554
Settlement payables	3,138,814	2,997,247	-	-
Amount owed to group undertaking	-	-	2,383,347	750,866
Other taxes and social security	107,162	174,712	-	-
Other payables	893,722	566,654	-	-
Accruals	377,382	248,729	43,100	39,600
Trade and other payables Lease liabilities	4,900,444 64,653	4,176,030 83,980	2,427,462 64,653	801,020 83,980
Income tax	703,450	602,794	408,234	350,832
Total liabilities	5,668,547	4,862,804	2,900,349	1,235,832

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	2021	2020
	£	£
Interim dividends paid on Ordinary 1p shares	9,811,421	4,836,310
Dividend per Ordinary 1p share	22.0	11.06

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 bad debts.

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. Full details of this lease are disclosed in Note 13.

During the year Jarvis Investment Management Limited paid Jarvis Securities Plc £7,000 (2020: £7,000) for rental of a disaster recovery site.

Jarvis Securities plc owed Jarvis Investment Management Limited £2,663,298 (2020: £750,866) 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 2021, these same related parties had cash balances of £634,423 (2020: £392,110) and interest was earned during the year amounting to £2,181 (2020: £923). In addition to cash balances other equity assets of £60,729,502 (2020: £49,950,739) were held by JIM Nominees Ltd as custodian.

During the year Jarvis Securities Plc charged £3,304,759 (2020: £3,869,812) to Jarvis Investment Management Limited for use of intellectual properties.

23. Capital commitments

As of 31 December 2021, the company had no capital commitments (2020: 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. During the period Jarvis Securities Plc cancelled its share premium account. This did not impact the regulatory capital of Jarvis Investment Management Limited. Further information regarding regulatory capital is disclosed in the strategic report.

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.

As of 31 December 2021, trade receivables of £186,074 (2020: £159,784) were past due and were impaired and partially provided for. The amount of the provision was £143,524 as at 31 December 2021 (2020: £131,456). 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:	2021	2020	2021	2020
	£	£	£	£

At 1 January	131,456	101,539	-	-
Charge / (credit) for the year	13,152	30,306	-	-
Uncollectable amounts written off	(1,084)	(389)	-	-
At 31 December	143,524	131,456	-	-

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

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR MZGGFLLKGZZG

AI Terminal

7727_10-k_2022-03-10_db6cf951-51a5-4fb9-8a50-ad12fec2b13d.html

More from JARVIS SECURITIES PLC

Talk to a Data Expert