Results for year ended 31 December 2022

RNS Number : 3681S

Jarvis Securities plc

09 March 2023

 

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.

9 March 2023

Jarvis Securities plc

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

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022

CHAIRMAN'S STATEMENT

· 20% decrease in profit before tax

· 15% decrease in interim dividend per share (excludes 2021 special dividend)

· 20% decrease in EPS

This year has definitely been one of the more interesting years at Jarvis since forming the Company in 1984. It began with the Russian invasion of Ukraine, an event which had a wide ranging impact across already stagnant economic conditions, and concluded with the appointment of a skilled person, the first such event in nearly 40 years of regulated activity. The appointment began in late September with a six-month time schedule to review the systems and controls of our subsidiary, Jarvis Investment Management Limited. This review is still ongoing and we expect to provide an update shortly.  Finally, as the year progressed, we witnessed a significant shift in central banks' monetary policy as they used interest rate increases as a tool to fight inflation and was good news.

General share transaction volumes remain below average across the whole industry so we have seen a reduction in line with that. The Covid pandemic brought significant volatility to the market between 2020-21, and a flurry of corporate activity after lock down as IPO activity increased. This has largely died down and been replaced by a steadily declining market, which is not ideal for transaction volumes. The negative geo-political situations have weighed heavily on the markets due to uncertain outcomes, however the effect of interest rate and cost of living increases on household spending has yet to be fully realised. There are indications that the market may have now turned, as market indices have turned positive and central banks signalling that interest rates may now have peaked or the rate of increase will slow.

The agreed FCA restriction set out in the previous market announcement on our Model B corporate clients has led us to review our business model. We are severing ties with a number of our model B clients whose businesses do not meet the risk tolerance at Jarvis and fall outside of our more restricted outsourcing model. Whilst limiting the business activities in the short term, it was felt necessary to ensure that the business would thrive in the longer term. We have made and continue to make enhancements to our Model B and retail client onboarding procedures and monitoring to ensure that they are in line with market practice and meet that expected of us by the regulator.

As many of our investors know, one of our income streams is interest earned on client funds. This has seen a significant upturn throughout the year, and has to an extent offset the reduction in commission income due to lower trade volumes and the significant one off costs associated with the skilled person process. We have in the short term been able to capture these rate increases as funds have matured, but there are still further gains to come in the future.

I am confident that the business will emerge financially stronger and more resilient as a result of this year, and whilst we are currently experiencing a period of change the future of Jarvis is bright.

As always, I would like to thank all off our staff for their hard work and support over what has been a very challenging and stressful period.

Andrew Grant

Chairman

Annual General Meeting

The Company will today dispatch to shareholders its Annual Report and Accounts for the year ended 31 December 2022, together with a notice convening the Annual General Meeting ("AGM"), to be held at the Company's offices on Thursday 20^th April 2023 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: [phone]

Andrew Grant

Jolyon Head

WH Ireland Limited

Tel: [phone]

Katy Mitchell

Darshan Patel

Consolidated income statement for the year ended 31 december 2022

				Year to	Year to
				31/12/22	31/12/21
	Notes
				£	£
Continuing operations:
Revenue	3			12,606,516	14,297,263
Administrative expenses Lease finance costs				(6,462,706) (5,785)	(6,632,746) (3,520)
Profit before income tax	5			6,138,026	7,660,997
Income tax charge	7			(1,163,303)	(1,480,146)
Profit for the period				4,974,723	6,180,851
Attributable to equity holders of the parent				4,974,723	6,180,851
Earnings per share	8			P	P
Basic and diluted				11.12	13.91

Consolidated statement of comprehensive income for the year

	Notes			Year to	Year to
				31/12/22	31/12/21
				£	£
Profit for the period				4,974,723	6,180,851
Total comprehensive income for the period				4,974,723	6,180,851
Attributable to equity holders of the parent				4,974,723	6,180,851

Consolidated STATEMENT OF FINANCIAL POSITION at 31 december 2022

				31/12/22	31/12/21
	Notes
				£	£
Assets
Non-current assets
Property, plant and equipment	9			598,044	295,767
Intangible assets	10			70,142	93,606
Goodwill	10			342,872	342,872
				1,011,058	732,245
Current assets
Trade and other receivables	12			3,388,927	6,361,707
Investments held for trading	14			8,769	1,958
Cash and cash equivalents	15			4,278,737	3,780,594
				7,676,433	10,144,259
Total assets				8,687,491	10,876,504
Equity and liabilities
Capital and reserves
Share capital	16			111,828	111,828
Merger reserve				9,900	9,900
Capital redemption reserve				9,845	9,845
Retained earnings				4,845,114	5,014,456
Total equity attributable to the equity holders of the parent				4,976,687	5,146,029
Non-current liabilities Deferred tax Lease liabilities	7 13			60,044 297,512	61,928 -
				357,556	61,928
Current liabilities
Trade and other payables	17			2,739,330	4,900,444
Lease liabilities	13			70,410	64,653
Income tax	17			543,508	703,450
				3,353,248	5,668,547
Total liabilities				3,710,804	5,730,475
Total equity and liabilities				8,687,491	10,876,504

CoMPANY STATEMENT OF FINANCIAL POSITION at 31 december 2022

				31/12/22	31/12/21
	Notes
				£	£
Assets
Non-current assets
Property, plant and equipment	9			598,044	295,767
Intangible assets	10			70,142	93,606
Goodwill	10			342,872	342,872
Investment in subsidiaries	11			284,239	284,239
				1,295,297	1,016,484
Current assets
Trade and other receivables	12			87,924	138,958
Cash and cash equivalents	15			1,925,466	2,329,510
				2,013,310	2,468,468
Total assets				3,308,687	3,484,952
Equity and liabilities
Capital and reserves
Share capital	16			111,828	111,828
Capital redemption reserve				9,845	9,845
Retained earnings				625,967	400,083
Total equity attributable to the equity holders				747,640	521,756
Non-current liabilities Deferred tax Lease liabilities	7 13			61,006 297,512	62,847 -
				358,518	62,847
Current liabilities
Trade and other payables Lease liabilities	17 13			1,615,986 70,410	2,427,462 64,653
Income tax	17			516,133	408,234
				2,202,529	2,900,349
Total liabilities				2,561,047	2,963,196
Total equity and liabilities				3,308,687	3,484,952

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 2021	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 Cancellation of share premium	- - -	- 1,412,372 (3,068,012)	- - -	- - -	6,180,851 (95,834) 3,068,012	- 886,113 -	6,180,851 2,202,651 -
Dividends	-	-	-	-	(9,811,421)	-	(9,811,421)
At 31 December 2021	111,828	-	9,900	9,845	5,014,456	-	5,146,029
Profit for the financial year	-	-	-	-	4,974,723	-	4,974,723
Dividends	-	-	-	-	(5,144,065)	-	(5,144,065)
At 31 December 2022	111,828	-	9,900	9,845	4,845,114	-	4,976,687

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 2021	111,828	1,655,640	9,845	1,481,763	(886,113)	2,372,963
Profit for the financial year Sale of own shares held in treasury Cancellation of share premium Dividends	- - - -	- 1,412,372 (3,068,012) -	- - - -	5,757,563 (95,834) 3,068,012 (9,811,421)	- 886,113 - -	5,757,563 2,202,651 - (9,811,421)
At 31 December 2021	111,828	-	9,845	400,083	-	521,756
Profit for the financial year	-	-	-	5,369,949	-	5,369,949
Dividends	-	-	-	(5,144,065)	-	(5,144,065)
At 31 December 2022	111,828	-	9,845	625,967	-	747,640

statement OF cashflows

for the year ended 31 december 2022

		CONSOLIDATED		COMPANY
		Year to	Year to	Year to	Year to
		31/12/22	31/12/21	31/12/22	31/12/21
	Notes
		£	£	£	£
Cash flow from operating activities
Profit before income tax		6,138,026	7,660,997	6,250,665	6,364,617
Depreciation and amortisation Lease finance cost	5	131,203 5,785	127,433 3,520	131,203 5,785	127,433 3,520
		6,275,014	7,791,950	6,387,653	6,495,570
(Increase) /Decrease in trade and other receivables		2,971,537	566,607	51,034	249,330
(Decrease) /Increase in trade payables		(2,161,711)	719,254	(813,317)	1,626,443
Cash generated from operations		7,084,840	9,077,811	5,625,370	8,371,343
Income tax (paid)/received		(1,323,288)	(1,363,179)	(772,817)	(533,059)
Net cash from operating activities		5,761,552	7,714,632	4,852,553	7,838,284
Cash flows from investing activities
Purchase of property, plant and equipment		(12,583)	(11,296)	(12,448)	(11,296)
Purchase of investments held for trading Proceeds from sale of investments held for trading Purchase of intangible assets		(2,797,364) 2,790,552 (12,448)	(1,272,780) 1,275,005 (23,677)	- - (12,583)	- - (23,677)
Cash flows from financing activities		(31,843)	(32,748)	(25,031)	(34,973)
Sale of treasury shares Dividends paid Lease finance cost Repayment of lease liability		- (5,144,065) (5,875) (81,626)	2,202,651 (9,811,421) (3,520) (83,980)	- (5,144,065) (5,875) (81,626)	2,202,651 (9,811,421) (3,520) (83,980)
Net cash used in financing activities		(5,231,566)	(7,696,270)	(5,231,566)	(7,696,270)
Net (decrease)/ increase in cash & cash equivalents		498,143	(14,386)	(404,044)	107,041
Cash and cash equivalents at the start of the year		3,780,594	3,794,980	2,329,510	2,222,469
Cash and cash equivalents at the end of the year		4,278,737	3,780,594	1,925,466	2,329,510
Cash and cash equivalents:
Balance at bank and in hand		5,499,464	4,864,077	1,925,466	2,329,510
Cash held for settlement of market transactions		(1,220,727)	(1,083,483)	-	-
		4,278,737	3,780,594	1,925,466	2,329,510

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 2022.

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.

(c) Property, plant and equipment

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 £384,985 at the lease start date of 27 September 2022. A finance charge of 5% 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.

	2022		2021
	£		£
Gross interest earned from treasury deposits, cash at bank and overdrawn client accounts	5,472,439		4,512,260
Commissions Fees	3,812,087 3,321,990		5,926,669 3,858,334
	12,606,516		14,297,263

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	2022		2021
Profit before income tax is stated after charging/(crediting):	£		£
Directors' emoluments Depreciation - right of use asset	598,733 79,979		491,426 80,973
Depreciation - owned assets	14,393		14,370
Amortisation (included within administrative expenses in the consolidated income statement)	25,668		32,090
Low value leases	8,852		8,852
Impairment of receivable charge / (credit)	(77,450)		13,152
Bank transaction fees	65,914		121,957

  Details of directors' annual remuneration as at 31 December 2022 are set out below:

						2022		2021
						£		£
Short-term employee benefits						550,551		438,850
Post-employment benefits						40,000		44,043
Benefits in kind						8,182		8,533
						598,733		491,426
Details of the highest paid director are as follows:
Aggregate emoluments						415,700		315,700
Benefits in kind						8,182		8,533
						423,882		324,233
					Emoluments & Benefits in kind	Pension		Total
Directors					£	£		£
Andrew J Grant					423,882	-		423,882
Jolyon C Head					110,851	40,000		150,851
S M Middleton					24,000	-		24,000
TOTAL					558,733	40,000		598,733
During the year benefits accrued for one director (2021: 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:
						2022		2021
Management and administration						59		63
The aggregate payroll costs of these persons were as follows:						£		£
Wages & salaries Social security						2,274,813 244,034		2,261,326 226,461
Pension contributions including salary sacrifice						78,610		78,831
						2,597,457		2,566,618

  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 £75,840 (2021: £56,835).

6. Auditors' remuneration
During the year the company obtained the following services from the company's auditors as detailed below:
	2022		2021
	£		£
Fees payable to the company's auditors for the audit of the company's annual financial statements	28,000		26,000
Fees payable to the company's auditors and its associates for other services:
The audit of the company's subsidiaries, pursuant to legislation	15,000		10,000
Total audit fees	43,000		36,000
Taxation Compliance	5,560		5,500
	48,560		41,500

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

	7. Income and deferred tax charges - group 2022 2021 £ £ Based on the adjusted results for the year: UK corporation tax 1,165,733 1,463,681 Adjustments in respect of prior years (546) 154 Total current income tax 1,165,187 1,463,835 Deferred income tax: Origination and reversal of temporary differences (1,883) 2,052 Adjustment in respect of prior years (1) (126) Adjustment in respect of change in deferred tax rates - 14,386 Total deferred tax charge (1,884) 16,312 1,163,303 1,480,146 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		6,138,026		7,660,997
Profit before income tax multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)		1,166,225		1,455,589
Effects of:
Expenses not deductible for tax purposes		-		9,346
Adjustments to tax charge in respect of previous years		(547)		28
Ineligible depreciation Adjust in respect of change in deferred tax rate		320 (2,695)		320 14,863
Current income tax charge for the years		1,163,303		1,480,146

Movement in (assets) / provision - group:
Provision at start of year	61,928		45,617
Deferred income tax charged in the year	(1,884)		16,311
Provision at end of year	60,044		61,928

Movement in (assets) / provision - company:
Provision at start of year				62,847		46,253
Deferred income tax charged in the year				(1,841)		16,594
Provision at end of year				61,006		62,847
8. Earnings per share				2022		2021
				£		£
Earnings: Earnings for the purposes of basic and diluted earnings per share
(profit for the period attributable to the equity holders of the parent)				4,974,723		6,180,851
Number of shares:
Weighted average number of ordinary shares for the purposes of basic earnings per share				44,731,000		44,419,318
				44,731,000		44,419,318

On 29 October 2021 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 2021 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 2021				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
Additions				384,985	-	12,583		397,568
Disposals				(303,648)	-	(258,887)		(562,535)
At 31 December 2022				384,985	222,450	73,112		680,547
Depreciation:
At 1 January 2021				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
Charge for the year				79,979	1,949	12,444		94,372
On Disposal				(303,648)	-	(257,968)		(561,616)
At 31 December 2022				19,250	20,952	42,301		82,503
Net Book Value:
At 31 December 2022				365,735	201,498	30,811		598,044
At 31 December 2021				60,729	203,447	31,591		295,767

The net book value of non-depreciable land is £125,000 (2021: £125,000).

10. Intangible assets & goodwill - group & company
				Intangible assets
		Goodwill		Databases	Software Development	Website		Total
		£		£	£	£		£
Cost:
At 1 January 2021		342,872		25,000	345,291	261,713		632,004
Additions		-		-	23,677	-		23,677
At 31 December 2021		342,872		25,000	368,968	261,713		655,681
Additions		-		-	12,448	-		12,448
Disposals		-		-	(234,628)	(257,836)		(492,464)
At 31 December 2022		342,872		25,000	146,788	3,877		175,665
Amortisation:
At 1 January 2021		-		17,719	258,888	253,378		529,985
Charge for the year		-		1,000	27,752	3,338		32,090
At 31 December 2021		-		18,719	286,640	256,716		562,075
Charge for the year		-		917	23,459	1,292		25,668
On Disposal		-		-	(226,365)	(255,855)		(482,220)
At 31 December 2022		-		19,636	83,734	2,153		105,523
Net Book Value:
At 31 December 2022		342,872		5,364	63,054	1,724		70,142
At 31 December 2021		342,872		6,281	82,328	4,997		93,606

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
					2022		2021
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:	2022		2021		2022		2021
	£		£		£		£
Trade receivables	381,367		1,504,513		-		-
Settlement receivables	2,498,019		4,365,820		-		-
Other receivables	83,910		128,183		83,911		122,265
Prepayments and accrued income Other taxes and social security	425,631 -		363,191 -		1,750 2,263		15,673 1,020
	3,388,927		6,361,707		87,924		138,958

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 2022 is as follows:

	< 1 year (£)	1-2 years (£)	2-3 years (£)	3-4 years (£)	4-5 years (£)
Lease payment	87,500	87,500	87,500	87,500	65,625
Finance charge	17,090	13,503	9,733	5,711	1,607
Net present value	70,410	73,997	77,767	81,729	64,018

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

	< 1 year (£)	1-2 years (£)	2-3 years (£)	3-4 years (£)	4-5 years (£)
Lease payment	65,625	-	-	-	-
Finance charge	972	-	-	-	-
Net present value	64,653	-	-	-	-

	2022
Lease liabilities included in the current statement of financial position	£
Current	70,410
Non-current	297,512
	367,922
	2022
	£
Amounts recognised in income statement	5,785
	5,785

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 2022 was £87,500.

14. Investments held for trading			Group						Company
			2022			2021			2022			2021
Listed Investments:			£			£			£			£
Valuation:
At 1 January			1,958			4,183			-			-
Additions			2,797,363			1,272,780			-			-
Disposals			(2,790,552)			(1,275,005)			-			-
As at 31 December			8,769			1,958			-			-
	Listed investments held for trading are stated at their market value at 31 December 2022 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
				2022			2021			2022			2021
				£			£			£			£
		Balance at bank and in hand - group/company		5,499,464			4,864,077			1,925,466			2,329,510
		Cash held for settlement of market transactions		(1,220,727)			(1,083,483)			-			-
				4,278,737			3,780,594			1,925,466			2,329,510

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 £1,088,375 (2021: £1,527,547) 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	2022		2021
Authorised: 64,000,000 Ordinary shares of 0.25p each	160,000  160,000		160,000  160,000
	2022		2021
	£		£
At 1 January 2022	111,828		111,828
Allotted, issued and fully paid:
44,731,000 (2021: 44,731,000) Ordinary shares of 0.25p 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:	2022		2021		2022		2021
	£		£		£		£
Trade payables	231,920		383,364		13,586		1,015
Settlement payables	1,219,465		3,138,814		-		-
Amount owed to group undertaking	-		-		1,549,300		2,383,347
Other taxes and social security	125,646		107,162		-		-
Other payables	808,027		893,722		-		-
Accruals	354,272		377,382		53,100		43,100
Trade and other payables Lease liabilities	2,739,330 70,410		4,900,444 64,653		1,615,986 70,410		2,427,462 64,653
Income tax	543,508		703,450		516,133		408,234
Total liabilities	3,353,248		5,668,547		2,202,529		2,900,349

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	2022		2021
	£		£
Interim dividends paid on Ordinary 1p shares	5,144,065		9,811,421
Dividend per Ordinary 1p share	11.5		22.0

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 15. 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.

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 £12,500 (2021: £7,000) for rental of a disaster recovery site.

Jarvis Securities plc owed Jarvis Investment Management Limited £1,549,300 (2021: £2,663,298) 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 2022, these same related parties had cash balances of £810,742 (2021: £634,423). No interest was earned during the year (2021: £2,181).  In addition to cash balances other equity assets of £30,479,543 (2021: £60,729,502) were held by JIM Nominees Ltd as custodian.

During the year Jarvis Securities Plc charged £4,871,178 (2021: £3,304,759) to Jarvis Investment Management Limited for use of intellectual properties.

At the period end Directors directly held 11,203,924 shares in the company (2021: 11,183,924). A further 12,547,330 shares (2021: 12,547,330) shares were held by concert parties of the directors as defined by the City Code on Takeovers and Mergers.

23. Capital commitments

As of 31 December 2022, the company had no capital commitments (2021: 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 that the group has remained profitable during the past decade when the Bank of England base rate was at its lowest level since its foundation in 1694 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 and Risk Assessment process ("ICARA"), as required by the Financial Conduct Authority ("FCA") for establishing the amount of regulatory capital to be held by that company. The ICARA gives consideration to both current and projected financial and capital positions. The ICARA is updated throughout the year to take account of any significant changes to business plans and any unexpected issues that may occur. The ICARA 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. 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 2022, trade receivables of £128,948 (2021: £186,074) were past due and were impaired and partially provided for. The amount of the provision was £57,828 as at 31 December 2022 (2021: £143,524). 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:	2022		2021		2022		2021
	£		£		£		£
At 1 January	143,524		131,456		-		-
Charge / (credit) for the year	(77,450)		13,152		-		-
Uncollectable amounts written off	(8,246)		(1,084)		-		-
At 31 December	57,828		143,524		-		-

 

END

 

 

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