Final Results

RNS Number : 3790P

Jarvis Securities plc

18 February 2016

 



Jarvis Securities plc

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

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

HIGHLIGHTS

·      7% increase in profit before tax

·      11% increase in year on year interest income

·      61% growth in dividend per share

·      7% increase in EPS

Enquiries:

Jarvis Securities plc Tel: [phone]

Andrew Grant

Jolyon Head

WH Ireland Limited 0113 394 6600

Katy Mitchell

Liam Gribben

Notes:

Jarvis Securities plc is the holding company for Jarvis Investment Management Limited (AIM: JIM.L) a stock broking company and outsourced service provider for bespoke tailored financial administration. Jarvis was established in 1984 and is a member of the London Stock Exchange; a broker dealer member of ISDX Markets, authorised and regulated by the Financial Conduct Authority and an HM Revenue & Customs approved ISA manager. As well as normal retail broking Jarvis provides cost effective and flexible share trading facilities within ISA and SIPP wrappers.

Jarvis provides outsourced and partnered financial administration services to a number of third party organisations. These organisations include advisers, stockbrokers, banks and fund managers. Jarvis can tailor its administration processes to the requirements of each organisation and has a strong reputation for flexibility and cost-effectiveness.

The Company is tomorrow sending to shareholders its Annual Report and Accounts for the year ended 31 December 2015, together with a notice convening the Annual General Meeting ("AGM"), to be held at the Company's offices on Thursday 24 March 2016. The Annual Report and Accounts and Notice of AGM will also be available from the Company's website, www.jarvissecurities.co.uk.

CHAIRMAN'S STATEMENT

·      7% increase in profit before tax

·      11% increase in year on year interest income

·      61% growth in dividend per share

·      7% increase in EPS

I cannot help but feel a sense of déjà vu as I write this as market conditions in 2015 have followed almost exactly the same pattern as 2014. In the first half of the year market sentiment was positive with the FTSE 100 share index briefly breaking through the 7,000 point barrier in April and May. This in turn led to healthy trade volumes across the market. During the second half of the year concerns about the Chinese economy and the impact of the fall in oil prices have dominated investors' thoughts. Prices have fallen across all market sectors and trade volumes declined.

In spite of a difficult second half in 2015 I am pleased to report another record year of profits. I remain cautious about our short term performance given continuing market uncertainty and the low interest rate environment. Over the medium to long term we believe the business is well positioned to continue to grow and further improve our financial results. At the time of writing we have several enquiries in the pipeline for our outsourcing service, some of whom would immediately add significantly to our trade volumes and cash balance under administration.  The interest in this service reflects a market reputation of being able to deliver in a consistent and cost effective manner for market participants. This fits with the overall Jarvis model of ensuring that we do what we say we will do and do it at a competitive price. The investment we have made in the business in recent years plays a key part in supporting that delivery and future growth.

We have this year paid out a special dividend of 10p as cash reserves in the business were continuing to build up. In addition we have purchased and will continue to purchase shares to hold in treasury where we feel the purchase price will increase returns to shareholders.   The decision to pay the special dividend was made after considering other investment options for the business and reflects a business model that continues to be highly cash generative.

As I have stated before the continuing success of the business reflects successful investment in infrastructure, a focus on what the business is good at and managing the risks that any business such as ours faces. To do this requires an excellent group of people and I would like to thank all members of the Jarvis team for their continuing hard work.

Andrew Grant

Chairman

Consolidated income statement for the year ended 31 december 2015

				Year to	Year to
				31/12/15	31/12/14
	Notes
				£	£
Continuing operations:
Revenue	3			7,614,664	7,314,384
Administrative expenses				(4,220,406)	(4,122,256)
Finance costs	5			-	(5,851)
Profit before income tax	6			3,394,258	3,186,277
Income tax charge	8			(678,155)	(672,067)
Profit for the period				2,716,103	2,514,210
Attributable to equity holders of the parent				2,716,103	2,514,210
Earnings per share	9			P	P
Basic				24.46	22.79
Diluted				24.39	22.68

Consolidated statement of comprehensive income for the year

	Notes			Year to	Year to
				31/12/15	31/12/14
				£	£
Profit for the period				2,716,103	2,514,210
Total comprehensive income for the period				2,716,103	2,514,210
Attributable to equity holders of the parent				2,716,103	2,514,210

COMPANY statement of comprehensive income for the year

	Notes			Year to	Year to
				31/12/15	31/12/14
				£	£
Profit for the period				2,231,593	2,100,841
Total comprehensive income for the period				2,231,593	2,100,841
Attributable to equity holders of the company				2,231,593	2,100,841

Company No.: 5107012

Consolidated STATEMENT OF FINANCIAL POSITION at 31 december 2015

				31/12/15	31/12/14
	Notes
				£	£
Assets
Non-current assets
Property, plant and equipment	10			235,536	243,348
Intangible assets	11			174,857	230,722
Goodwill	11			342,872	342,872
				753,265	816,942
Current assets
Investments held to maturity	12			-	246,979
Trade and other receivables	14			3,233,971	2,674,034
Investments held for trading	15			77,057	13,626
Cash and cash equivalents	16			9,777,936	8,296,385
				13,088,964	11,231,024
Total assets				13,842,229	12,047,966
Equity and liabilities
Capital and reserves
Share capital	17			111,503	111,200
Share premium				1,520,119	1,467,485
Merger reserve				9,900	9,900
Capital redemption reserve				9,845	9,845
Share option reserve				136,556	136,556
Retained earnings Own shares held in treasury	17			2,626,295 (301,514)	2,955,642 -
Total equity attributable to the equity holders of the parent				4,112,704	4,690,628
Current liabilities	18
Trade and other payables	18			9,389,215	7,055,111
Deferred tax	18			9,238	23,919
Income tax	18			331,072	278,308
Total current liabilities	18			9,729,525	7,357,338
Total equity and liabilities				13,842,229	12,047,966

Company No.: 5107012

CoMPANY STATEMENT OF FINANCIAL POSITION at 31 december 2015

				31/12/15	31/12/14
	Notes
				£	£
Assets
Non-current assets
Property, plant and equipment	10			235,536	243,348
Intangible assets	11			174,857	230,722
Goodwill	11			342,872	342,872
Investment in subsidiaries	13			284,239	284,239
				1,037,504	1,101,181
Current assets
Trade and other receivables	14			796,631	1,173,874
Cash and cash equivalents	16			1,089,101	1,162,770
				1,885,732	2,336,644
Total assets				2,923,236	3,437,825
Equity and liabilities
Capital and reserves
Share capital	17			111,503	111,200
Share premium				1,520,119	1,467,485
Capital redemption reserve				9,845	9,845
Share option reserves				136,556	136,556
Retained earnings Own shares held in treasury	17			598,450 (301,514)	1,412,307 -
Total equity attributable to the equity holders				2,074,959	3,137,393
Current liabilities	18
Trade and other payables	18			525,540	31,700
Deferred tax	18			9,238	23,919
Income tax	18			313,499	244,813
Total current liabilities	18			848,277	300,432
Total equity and liabilities				2,923,236	3,437,825

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	Merger reserve	Capital redemption reserve	Share option reserve	Retained earnings	Own shares held in Treasury	Total equity
	£	£	£	£	£	£	£	£
At 1 January 2014	107,825	1,061,972	9,900	9,845	129,162	2,263,396	-	3,582,100
Share options exercised during the year	3,375	405,513	-	-	-	-	-	408,888
Share based payment expense	-	-	-	-	7,394	-	-	7,394
Profit for the financial year	-	-	-	-	-	2,514,210	-	2,514,210
Dividends	-	-	-	-	-	(1,821,964)	-	(1,821,964)
At 31 December 2014	111,200	1,467,485	9,900	9,845	136,556	2,955,642	-	4,690,628
Share options exercised during the year	303	52,634	-	-	-	-	-	52,937
Profit for the financial year	-	-	-	-	-	2,716,103	-	2,716,103
Dividends Purchase of own shares held in treasury Sale of own shares held in treasury	- - -	- - -	- - -	- - -	- - -	(2,947,571) - (97,879)	- (482,072) 180,558	(2,947,571) (482,072) 82,679
At 31 December 2015	111,503	1,520,119	9,900	9,845	136,556	2,626,295	(301,514)	4,112,704

COMPANY STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	Capital redemption reserve	Share option reserve	Retained earnings	Own shares held in treasury	Total equity
	£	£	£	£	£	£	£
At 1 January 2014	107,825	1,061,972	9,845	129,162	1,133,430	-	2,442,234
Share options exercised during the year	3,375	405,513	-	-	-	-	408,888
Share based payment expense	-	-	-	7,394	-	-	7,394
Profit for the financial year	-	-	-	-	2,100,841	-	2,100,841
Dividends	-	-	-	-	(1,821,964)	-	(1,821,964)
At 31 December 2014	111,200	1,467,485	9,845	136,556	1,412,307	-	3,137,393
Share options exercised during the year	303	52,634	-	-	-	-	52,937
Profit for the financial year	-	-	-	-	2,231,593	-	2,231,593
Dividends Purchase of own shares held in treasury Sale of own shares held in treasury	- - -	- - -	- - -	- - -	(2,947,571) - (97,879)	- (482,072) 180,558	(2,947,571) (482,072) 82,679
At 31 December 2015	111,503	1,520,119	9,845	136,556	598,450	(301,514)	2,074,959

statement OF cashflows

for the year ended 31 december 2015

		CONSOLIDATED		COMPANY
		Year to	Year to	Year to	Year to
		31/12/15	31/12/14	31/12/15	31/12/14
	Notes
		£	£	£	£
Cash flow from operating activities
Profit before income tax		3,394,258	3,186,277	2,786,670	2,659,026
Depreciation and amortisation	6	67,457	87,634	67,457	71,663
Share based payment expense	6	-	7,394	-	7,394
Profit on disposal of investments held to maturity		(1,875)	-	-	-
Finance costs	5	-	5,851	-	-
		3,459,840	3,287,156	2,854,127	2,738,083
Decrease/(Increase) in trade and other receivables		(559,937)	45,887	377,243	(627,943)
(Decrease) /Increase in trade payables		2,334,103	(3,040,756)	493,839	(143,785)
Increase in investments in subsidiaries		-	-	-	(1,201)
(Increase)/Decrease in investments held for trading		(63,431)	(7,869)	-	-
Cash generated from operations		5,170,575	284,418	3,725,209	1,965,154
Interest paid		-	(5,851)	-	-
Income tax (paid)/received		(640,072)	(904,469)	(501,072)	(729,469)
Net cash from operating activities		4,530,503	(625,902)	3,224,137	1,235,685
Cash flows from investing activities
Purchase of property, plant and equipment		(3,780)	(9,078)	(3,780)	(9,078)
Receipt from sale of investment		248,855	-	-	-
Purchase of intangible assets		-	(1,277)	-	(1,277)
		245,075	(10,355)	(3,780)	(10,355)
Cash flows from financing activities
Issue of share capital		52,937	408,888	52,937	408,888
Repurchase of ordinary share capital Sale of treasury shares Dividends paid		(482,072) 82,679 (2,947,571)	- - (1,821,964)	(482,072) 82,679 (2,947,571)	- - (1,821,964)
Net cash used in financing activities		(3,294,027)	(1,413,076)	(3,294,027)	(1,413,076)
Net increase/(decrease) in cash & cash equivalents		1,481,551	(2,049,333)	(73,670)	(187,746)
Cash and cash equivalents at the start of the year		8,296,385	10,345,718	1,162,770	1,350,516
Cash and cash equivalents at the end of the year		9,777,936	8,296,385	1,089,101	1,162,770
Cash and cash equivalents:
Cash at bank and in hand		9,777,936	8,296,385	1,089,101	1,162,770

1. Basis of preparation

The company has adopted the requirements of International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (EU) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified by the revaluation of available-for-sale financial assets, and financial assets and liabilities 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. These accounting policies comply with applicable IFRS standards and IFRIC interpretations issued and effective at the time of preparing these statements.

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

IFRS 14 Regulatory Deferral Accounts

IFRS 9 Financial Instruments

IFRS 15 Revenue from Contracts with Customers and amendments to IFRS 15: Effective date of IFRS 15

IFRS 16 Leases

Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities - Applying the Consolidation Exception

Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Amendments to IAS 1: Disclosure Initiative

Amendment to IAS 27: Equity Method in Separate Financial Statements

Amendments to IAS16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation

Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations

Amendments to IAS 16 and IAS 41: Bearer Plants

Other than the possible exception of IFRS 16 which is currently under review, the adoption of these Standards and Interpretations is not expected to have a material impact on the results of the Company or Group.

The preparation of financial statements in accordance with IFRS requires the use of certain accounting estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies.  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 22.

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. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described within these financial statements. In addition, note 27 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 together with long term contracts with all its customers and significant suppliers as well as 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 despite the current uncertain economic outlook.

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. Summary of significant accounting policies

(a) Revenue

Income is recognised as earned in the following way:

Commission - we charge 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. 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. Fees are accrued up to the time 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.

(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 2015.

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

Intra-group sales and profits are eliminated on consolidation and all sales and profit figures relate to external transactions only. No income statement is presented for Jarvis Securities plc as provided by S408 of the Companies Act 2006. The profit for the year of Jarvis Securities plc, as approved by the board, was £2,231,593 (2014: £2,100,841).

(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 three years.

Motor vehicles                                     -               15% on cost

Office equipment                                 -               20% on cost

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

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

(d) Intangible assets

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

Databases                                             -               4% on cost

Customer relationships                     -               7% on cost

Software developments                      -               20% on cost

Website                                                 -               33% on cost

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

(e) Goodwill

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

(f) Deferred income tax

Deferred income tax is provided in full, using the liability method, on differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting or taxable profit or loss. Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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

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

(g) Segmental reporting

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

(h) Pensions

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

(i) Trade receivables and payables

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

(j) Operating leases and finance leases

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

(k) Investments

The Group classifies its investments in the following categories: investments held to maturity, investments held for trading and available-for-sale investments. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.

Investments held to maturity

Investments held to maturity are stated at amortised cost. Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Assets in this category are classified as non-current, unless they are due to mature in the 12 months following the balance sheet date.

Investment held for trading

Investments held for trading are stated at fair value. An investment is classified in this category if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current and are considered to be level one assets in accordance with IFRS 13.

Purchases and sales of investments are recognised on the trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value. Investments are derecognised when the rights to receive cash flows from the investments have expired or been transferred and the Group has transferred substantially all the risks and rewards of ownership. Realised and unrealised gains and losses arising from changes in fair value of investments held for trading are included in the income statement in the period in which they arise. Unrealised gains and losses arising in changes in the fair value of available-for-sale investments are recognised in equity. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

The fair value of quoted investments is based on current bid prices. If the market for an investment is not active, the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, or discounted cash flow analysis refined to reflect the issuer's specific circumstances.

The Group assesses at each balance sheet date whether there is objective evidence that an investment is impaired. In the case of investments classified as available-for-sale, a decline in the fair value below its carrying value is considered in determining whether the security is impaired.

Investments in subsidiaries

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

(l) Foreign Exchange

The group offers settlement of trades in various currencies, predominately Sterling, US dollars and Euros. 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 minimal foreign exchange risk.

(m) Share Capital

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

 

(n) Cash and cash equivalents

Cash and cash equivalents comprise cash on 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.

(o) Current income tax

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

 

(p) Dividend distribution

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

(q) Share based payments

The Group applies the requirements of IFRS 2 Share-based Payment and IFRIC 11.

The Group issues equity-settled share-based payments to certain employees and other personnel. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effects of non market-based vesting conditions.

Fair value is measured by use of a Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

3. Group revenue

The revenue of the group during the year was made 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.

	2015		2014
	£		£
Gross interest earned from treasury deposits, cash at bank and overdrawn client accounts	3,391,977		3,053,533
Fees, commissions, foreign exchange gains and other revenue	4,222,687		4,260,851
	7,614,664		7,314,384

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 the Group's sole business activity is the provision of stock broking services and all revenue is derived in the UK, management have not had occasion to define any factors to identify reportable segments.

5. Finance costs	2015		2014
	£		£
Interest on bank loans, overdrafts and tax	-		5,851
	-		5,851

6. Profit before income tax	2015		2014
Profit before income tax is stated after charging/(crediting):	£		£
Directors' emoluments	526,329		562,102
Depreciation - owned assets	11,592		15,797
Amortisation (included within administrative expenses in the consolidated income statement)	55,865		55,865
Operating lease rentals - hire of machinery	9,052		9,052
Operating lease rentals - land and buildings	63,500		63,500
Impairment of receivable charge	135,550		84,555
Bank transaction fees	52,199		47,086

Details of Directors' annual remuneration as at 31 December 2015 are set out below:

						2015		2014
						£		£
Short-term employee benefits						455,500		491,500
Post-employment benefits						61,239		56,666
Share based payment expense						-		6,193
Benefits in kind						9,590		7,743
						526,329		562,102
Details of the highest paid director are as follows:
Aggregate emoluments						240,000		264,894
Company contributions to personal pension scheme						24,000		37,966
Benefits in kind						8,132		6,703
						272,132		309,563
					Emoluments & Benefits in kind	Pension		Total
Directors					£	£		£
Andrew J Grant					248,132	24,000		272,132
Nick J Crabb					101,958	28,139		130,096
Jolyon C Head					101,000	9,100		107,700
Graeme McAusland					14,000	-		14,000
TOTAL					465,090	61,239		526,329
During the year benefits accrued for three directors (2014: three directors) under a money purchase pension scheme. In addition, Andrew Grant made a gain of £141,777 (2014: £780,690) from exercising options. Staff Costs
The average number of persons employed by the group, including directors, during the year was as follows:
						2015		2014
Management and administration						44		42
The aggregate payroll costs of these persons were as follows:						£		£
Wages, salaries & social security						1,605,814		1,546,545
Pension contributions including salary sacrifice						63,025		41,700
Share based payment expense						-		7,394
						1,668,839		1,595,639

Key personnel

The directors disclosed above are considered to be the key management personnel of the group.

7. Auditors' remuneration
During the year the company obtained the following services from the company's auditors as detailed below:
	2015		2014
	£		£
Fees payable to the company's auditors for the audit of the company's annual financial statements	21,000		20,000
Fees payable to the company's auditors and its associates for other services:
The audit of the company's subsidiaries, pursuant to legislation	12,000		11,950
Total audit fees	33,000		31,950
Taxation Compliance	4,250		4,050
Other taxation advisory services not relating to compliance	-		5,000
	37,250		41,000

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

8. Income and deferred tax charges - group 2015 2014 £ £ Based on the adjusted results for the year: UK corporation tax 688,498 683,182 Adjustments in respect of prior years 4,339 (34,624) Total current income tax 692,837 648,557 Deferred income tax: Origination and reversal of timing differences (11,062) 3,026 Adjustment in respect of change in deferred tax rate - (1,045) Adjustment in respect of prior years (3,619) 21,528 Total deferred tax (credit) / charge (14,681) 23,509 Income tax on profit 678,155 672,067 The income tax assessed for the year is less than the standard rate of corporation tax in the UK (20.25%). The differences are explained below:
Profit before income tax	3,394,258		3,186,277
Profit before income tax multiplied by the standard rate of corporation tax in the UK of 20.25% (2014 - 21.5%)	687,337		685,049
Effects of:
Expenses not deductible for tax purposes	61		-
Adjustments to tax charge in respect of previous years	720		(13,096)
IFRS 2 (share option) expense	(10,358)		1,590
Ineligible depreciation	395		419
Adjustment in respect of change in deferred tax rate	-		(1,045)
Other	-		(850)
Current income tax charge for the year	678,155		672,067

Movement in (assets) / provision - group and company:
Provision at start of year	23,919		410
Deferred income tax (creditor) / charged in the income statement in the year	(11,062)		1,981
Adjustment in respect of prior periods	(3,619)		21,528
(Asset) / Provision at end of year	9,238		23,919
8. Income and deferred tax charges - group (continued) The deferred tax balances arise from taxable temporary differences in respect of the following:			Share Based Payments
Deferred tax (asset) / liability brought forward			-
Current year			(10,335)
(Asset) at end of year			(10,335)
			Tangible Assets
Deferred tax liability brought forward Charge / (credit) to income Current year			23,919 (727)
Prior year			(3,619)
Liability at end of year			19,573

9. Earnings per share				2015		2014
				£		£
Earnings: Earnings for the purposes of basic and diluted earnings per share
(profit for the period attributable to the equity holders of the parent)				2,716,103		2,514,210
Number of shares:
Weighted average number of ordinary shares for the purposes of basic earnings per share				11,105,705		11,031,288
Effect of dilutive potential ordinary shares:
Share option scheme				32,500		55,474
				11,138,205		11,086,762

Shares held in treasury are deducted for the purpose of calculating earnings per share. Options exercised or those lapsed as relating to former employees have been deducted for the purpose of calculating the diluted weighted average number of shares in issue for the period.

10. Property, plant & equipment - group & company				Freehold Land & Property	Leasehold Improvements	Office Equipment		Total
Cost:				£	£	£		£
At 1 January 2014				222,450	1,191	243,579		467,220
Additions				-	2,823	6,255		9,078
Disposals				-	-	-		-
At 31 December 2014				222,450	4,014	249,834		476,298
Additions				-	-	3,780		3,780
Disposals				-	-	-		-
At 31 December 2015				222,450	4,014	253,614		480,078
Depreciation:
At 1 January 2014				3,411	397	213,345		217,153
Charge for the year				1,949	556	13,292		15,797
On Disposal				-	-	-		-
At 31 December 2014				5,360	953	226,637		232,950
Charge for the year				1,949	873	8,770		11,592
On Disposal				-	-	-		-
At 31 December 2015				7,309	1,826	235,407		244,542
Net Book Value:
At 31 December 2015				215,141	2,188	18,207		235,536
At 31 December 2014				217,090	3,061	23,197		243,348

11. Intangible assets & goodwill - group & company				Intangible assets
		Goodwill		Customer Relationships	Databases	Software Development	Website		Total
		£		£	£	£	£		£
Cost:
At 1 January 2014		342,872		177,981	25,000	216,685	103,519		523,185
Additions		-		-	-	1,276	-		1,276
At 31 December 2014		342,872		177,981	25,000	217,961	103,519		524,461
Additions		-		-	-	-	-		-
At 31 December 2015		342,872		177,981	25,000	217,961	103,519		524,461
Amortisation:
At 1 January 2014		-		83,726	10,719	39,911	103,519		237,875
Charge for the year		-		18,290	1,000	36,574	-		55,864
At 31 December 2014		-		102,016	11,719	76,485	103,519		293,739
Charge for the year		-		18,291	1,000	36,574	-		55,865
At 31 December 2015		-		120,307	12,719	113,059	103,519		349,604
Net Book Value:
At 31 December 2015		342,872		57,674	12,281	104,902	-		174,857
At 31 December 2014		342,872		75,965	13,281	141,476	-		230,722

The addition to software development in the prior year is capital expenditure on switching and upgrading our core IT system.

Goodwill represents the difference between the consideration paid and the fair value of assets acquired on the acquisition of a business in 2003.  In accordance with the transitional provisions in IFRS 1 the group elected not to apply IFRS 3 retrospectively to past business combinations.  Therefore the goodwill balance represents an acquired customer base, that continues to trade with 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 cost effective provider of execution only stockbroking solutions that it is today.

An impairment review is conducted annually (or more frequently if indicators of impairment are noted) by preparing a value in use calculation over a five year period.  The key assumptions into the value in use calculation are the attrition rate of customers: 7% based upon the actual rate for the previous period and the discount rate: 6% based upon the company's weighted average cost of capital.  The discount rate used is pre-tax.  Having completed this calculation the directors conclude that there is no reasonably possible change in any of the key assumptions that will result in the carrying amount of goodwill exceeding its recoverable amount.

12. Investments held to maturity	Group				Company
	2015		2014		2015		2014
Unlisted Investments:	£		£		£		£
Cost:
At 1 January Disposals	300,067 (300,067)		300,067 -		- -		- -
As at 31 December	-		300,067		-		-
Amortisation:
At 1 January	53,088		37,119		-		-
Charge for the year Disposal	15,969 (69,057)		15,969 -		-		-
As at 31 December	-		53,088		-		-
Net Book Value:
At 1 January	246,979		262,948		-		-
At 31 December	-		246,979		-		-

12. Investments held to maturity (continued)

The investment held to maturity was an 8% coupon UK Government Gilt. The Gilt was originally purchased to place as a bond with a 3^rd party business partner. The relationship was terminated during 2015 and the Gilt returned to us. As it was no longer needed for its original purpose it was sold.

13. Investments in subsidiaries						Company
						2015		2014
Unlisted Investments:						£		£
Cost:
At 1 January						284,239		283,038
Capital contributions re share option costs						-		1,201
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.                  * indirectly held

14. Trade and other receivables	Group				Company
Amounts falling due within one year:	2015		2014		2015		2014
	£		£		£		£
Trade receivables	219,471		335,898		15,789		7,026
Settlement receivables	1,946,180		1,414,929		-		-
Amounts owed by group undertakings	-		-		-		518,918
Other receivables	434,225		219,001		415,875		215,875
Prepayments and accrued income	634,095		704,206		364,967		432,055
	3,233,971		2,674,034		796,631		1,173,874

An analysis of trade and settlement receivables past due is given in note 22. There are no amounts past due included within other receivables or prepayments and accrued income.

15. Investments held for trading		Group				Company
		2015		2014		2015		2014
Listed Investments:		£		£		£		£
Valuation:
At 1 January		13,626		5,757		-		-
Additions		758,882		2,650,116		-		-
Disposals		(695,451)		(2,642,247)		-		-
As at 31 December		77,057		13,626		-		-
	Listed investments held for trading are stated at their market value at 31 December 2015 and are considered to be level one assets in accordance with IFRS 13.

16. Cash and cash equivalents	Group				Company
	2015		2014		2015		2014
	£		£		£		£
Balance at bank and in hand - group/company	2,792,353		3,255,338		1,089,101		1,162,770
Cash held for settlement of market transactions	6,985,583		5,041,047		-		-
	9,777,936		8,296,385		1,089,101		1,162,770

17. Share capital	2015		2014
Authorised: 16,000,000 Ordinary shares of 1p each	160,000  160,000		160,000 160,000
	2015		2014
	£		£
At 1 January 2015	111,200		107,825
Allotted, issued and fully paid during the year	303		3,375
Allotted, issued and fully paid:
11,150,250 (2014: 11,120,000) Ordinary shares of 1p each	111,503		111,200

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

The Company has a share option scheme for certain employees of the Group. The vesting period is five years and all options have now vested. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the option holder leaves the Group before the options are vested and exercised.

During the period 123,250 shares were purchased to be held in treasury. 47,250 of these shares were used to satisfy options with an exercise price of 175p per option, exercised by Andrew Grant on 11^th May 2015. As at the period end 76,000 shares are held in treasury.

Details of the share options outstanding during the year are as follows:

		2015				2014
		Number of share options		Weighted average exercise price		Number of share options		Weighted average exercise price
				Pence				Pence
Outstanding at the beginning of the year		110,000		175.00		447,500		134.39
Exercised during the year		(77,500)		175.00		(337,500)		121.15
Outstanding at year end		32,500		175.00		110,000		175.00
Exercisable at year end		32,500		175.00		110,000		175.00
A detailed breakdown of the exercise prices for options outstanding as at 31 December 2015 is shown in the table below:
		2015				2014
Exercise Price (pence)		Number outstanding at year end		Exercise dates		Number outstanding at year end		Exercise dates
175.00 (granted 18 May 2007)		32,500		17 May 2015 to 17 May 2017		110,000		17 May 2015 to 17 May 2017

The total number of options unexercised and in issue at the year end is 32,500. Options were exercised throughout the year and the weighted average share price for the year was 398p (2014: 480p).

18. Trade and other payables	Group					Company
Amounts falling due within one year:	2015		2014			2015				2014
	£		£			£				£
Trade payables	70,793		63,135			3,474				-
Settlement payables	8,724,052		6,557,470			-				-
Amount owed to group undertaking	-		-			471,697				-
Other taxes and social security	63,931		100,428			2,835				1,801
Other payables	326,449		182,579			18,483				1,750
Accruals	203,990		151,499			29,500				28,149
Trade and other payables	9,389,215		7,055,111			525,989				31,700
Income tax	331,072		278,308			313,489				244,813
Deferred tax	9,238		23,919			9,238				23,919
Total liabilities	9,729,525		7,357,338			848,716				300,432

Settlement payables will be settled on their contracted date, which has a maximum allowed time of 20 days from when the trade date. 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.

19. Dividends	2015		2014
	£		£
Interim dividends paid on Ordinary 1p shares	2,947,571		1,821,964
Dividend per Ordinary 1p share	26.5p		16.5p

20. Operating lease commitments - group

At 31 December 2015 the group was committed to making the following payments in respect of operating leases which expire:

	Equipment				Land & buildings
	2015		2014		2015		2014
	£		£		£		£
Not later than one year:	9,052		9,052		63,500		63,500
Later than one year and not later than five years:	22,631		31,683		47,625		111,125
Later than five years:	-		-		-		-

Equipment leases relate to the use of postage processing and franking machines.

Operating lease commitments - company

At 31 December 2015 the company was committed to making the following payments in respect of operating leases which expire:

					Land & buildings
					2015		2014
					£		£
Not later than one year:					63,500		63,500
Later than one year and not later than five years:					47,625		111,125

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 £63,500, being the market rate on an arm's length basis, and expires on 26 September 2017.

21. 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 loans and receivables, Investments held for trading are categorised as available-for-sale financial assets and trade and other payables are classified as financial liabilities. 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 16. 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. 

22. Critical accounting estimates and judgements

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

As of 31 December 2015, trade receivables of £378,690 (2014: £251,113) were past due and were impaired and partially provided for. The amount of the provision was £207,711 as at 31 December 2015 (2014: £145,483). 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.

	Group				Company
Provision of impairment of receivables:	2015		2014		2015		2014
	£		£		£		£
At 1 January	145,483		212,376		-		-
Charge / (credit) for the year	135,550		84,555		-		-
Uncollectable amounts written off	(73,322)		(151,448)		-		-
At 31 December	207,711		145,483		-		-

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2 (e). These calculations require the use of estimates. The assumptions and sensitivity relating to the impairment tests are detailed in note 11.

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

23. Immediate and ultimate parent undertaking

The company's immediate and ultimate parent undertaking is Sion Securities Limited, a company registered in England and Wales. Sion Securities Limited is controlled by Mr A J Grant by virtue of his controlling interest.

24. Related party transactions

The company has a lease with Sion Properties Limited, a company controlled by A J Grant by virtue of his majority shareholding, for the rental of 78 Mount Ephraim, a self-contained office building. The lease has an annual rental of £63,500, being the market rate on an arm's length basis, and expires on 26 September 2017.

Jarvis Securities plc owed Jarvis Investment Management Limited £471,697 (2014: Jarvis Investment Management Limited owed Jarvis Securities Plc £518,918) at year end.

Sion Holdings Limited, a company controlled by A J Grant by virtue of his majority shareholding, had £490,906 (2014: nil) cash deposited with Jarvis Investment Management Limited at 31 December 2015. Sion Properties Limited, a company controlled by A J Grant by virtue of his majority shareholding, had £221,698 (2014: nil) deposited with Jarvis Investment Management Limited.

25. Capital commitments

As of 31 December 2015 the company had no capital commitments (2014: nil).

26. Fair value estimation

The fair value of financial instruments traded in active markets (such as trading and available for sale securities) 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.

27. Financial risk management objectives and policies

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

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

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

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

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

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

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

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

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

Jarvis Securities plc

78 Mount Ephraim

Royal Tunbridge Wells

Kent

TN4 8BS

Tel: [phone]

Fax: [phone]

Email: [e-mail]

 

END

 

 

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