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.
26
March 2024
Jarvis Securities
plc
("Jarvis" or "the Company" or
"the Group")
RESULTS FOR THE YEAR ENDED 31
DECEMBER 2023
CHAIRMAN'S
STATEMENT
· 15%
decrease in profit before tax
· 27%
decrease in interim dividend per share
· 20%
decrease in EPS
This year has again been very
challenging for Jarvis with the continuing skilled person review
and voluntary requirement ("VREQ") restrictions on the firm's
subsidiary Jarvis Investment Management Limited being the main
focus for the firm. This has had a material impact on costs and
continues to do so but conversely, the interest rate increases seen
towards the end of 2022, as a tool to fight inflation, continued
through to Q3 of 2023, which has been of benefit to the Group.
Overall, we have traded in line with current expectations for the
year.
We continue to progress through the
skilled person review. We were expecting the skilled person to have
provided their draft report for Phase 1c by 28 February 2024. This
has been delayed, with the draft report now expected by the end of
April 2024. During Q2, we expect the skilled person to start its
phase 2 review and assurance report on the
remediation work we have undertaken to date.
The reduction in share transaction
volumes first seen in the second half of 2022 has continued
throughout 2023. 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 is now much clearer.
As already announced in September
2022, the VREQ relates to our Model B Corporate Clients, and over
the last 18 months we have continually reviewed those
relationships. As a result of our risk assessments and
categorisation, a number of Corporate Clients have been off-boarded
due to falling outside of our risk appetite, whilst some have
simply chosen to transfer elsewhere due to the restrictions of the
VREQ. Our Corporate Client universe has remained steady since our
assessments were completed in Q3 of the financial year under review
and we are pleased to continue to be approached regarding potential
new corporate introductions.
There have been significant
enhancements to the onboarding processes and ongoing monitoring of
all our client relationships and our enhanced Compliance Monitoring
Plan is underway which will continuously give assurance as to the
adequacy and effectiveness of our operations, systems and controls
for monitoring compliance risk.
An area of change for Jarvis in 2024
is the decision to exit the SIPP market. Jarvis Investment
Management Limited will of course work with all clients and SIPP
Trustees to assist with a smooth transition to their preferred new
custodian or platform provider and enable full closures of these
accounts.
One of the Group's income streams is
interest earned on client funds. This again has seen a significant
upturn throughout the year, and has offset the reduction in
commission income due to lower trade volumes and the significant
one-off costs associated with the skilled person process. However,
we are working closely with the skilled person with regard to
uninvested client cash, interest retention and term deposits.
Any potential impact on those income streams from reductions in
funds held should become clearer in the coming months.
Despite these ongoing challenges the
Board and staff at Jarvis remain committed and are working
tirelessly so that the business can continue and to build for a
stable, resilient future.
As always, I would like to thank all
off our staff for their hard work and support over what has been
another 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 2023, together with a notice convening the Annual General
Meeting ("AGM"), to be held at the Company's offices on Thursday
18th April 2024 at 9am. The Annual Report and
Accounts and Notice of AGM will also be available from today from
the Company's website, www.jarvissecurities.co.uk .
Enquiries:
Jarvis Securities
plc
Tel: 01892 510515
Andrew Grant
Kieran Price
WH Ireland
Limited
Tel: 0113 394 6618
Katy Mitchell
Darshan
Patel
Consolidated income statement
for the year ended 31 december 2023
|
|
|
|
Year to
|
Year
to
|
|
|
|
|
31/12/23
|
31/12/22
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£
|
£
|
Continuing operations:
|
|
|
|
|
|
Revenue
|
3
|
|
|
13,088,907
|
12,606,516
|
|
|
|
|
|
|
Administrative expenses
Exceptional administrative
expenses
Lease finance costs
|
5
13
|
|
|
(6,523,706)
(1,337,522)
(17,090)
|
(6,212,770)
(249,936)
(5,785)
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax
|
5
|
|
|
5,210,589
|
6,138,026
|
|
|
|
|
|
|
Income tax charge
|
7
|
|
|
(1,229,356)
|
(1,163,303)
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
|
3,981,233
|
4,974,723
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity holders of
the parent
|
|
|
|
3,981,233
|
4,974,723
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
8
|
|
|
P
|
P
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
8.90
|
11.12
|
|
|
|
|
|
|
Consolidated statement of
comprehensive income for the year
|
Notes
|
|
|
Year to
|
Year
to
|
|
|
|
|
31/12/23
|
31/12/22
|
|
|
|
|
£
|
£
|
Profit for the period
|
|
|
|
3,981,233
|
4,974,723
|
Total comprehensive income for the
period
|
|
|
3,981,233
|
4,974,723
|
Attributable to equity holders of
the parent
|
|
|
|
3,981,233
|
4,974,723
|
Consolidated STATEMENT OF
FINANCIAL POSITION at 31 december 2023
|
|
|
|
|
|
|
|
|
|
31/12/23
|
31/12/22
|
|
Notes
|
|
|
|
|
|
|
|
|
£
|
£
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
9
|
|
|
505,184
|
598,044
|
Intangible assets
|
10
|
|
|
45,331
|
70,142
|
Goodwill
|
10
|
|
|
342,872
|
342,872
|
|
|
|
|
893,387
|
1,011,058
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
12
|
|
|
2,011,608
|
3,388,927
|
Investments held for
trading
|
14
|
|
|
11,966
|
8,769
|
Cash and cash equivalents
|
15
|
|
|
5,514,075
|
4,278,737
|
|
|
|
|
7,537,649
|
7,676,433
|
Total assets
|
|
|
|
8,431,036
|
8,687,491
|
|
|
|
|
|
|
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
|
|
|
|
4,912,384
|
4,845,114
|
Total equity attributable to the
equity holders of the parent
|
|
|
|
5,043,957
|
4,976,687
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
Deferred tax
|
7
|
|
|
54,266
|
60,044
|
|
Lease liabilities
|
13
|
|
|
223,515
|
297,512
|
|
|
|
|
|
277,781
|
357,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
17
|
|
|
2,541,690
|
2,739,330
|
Lease liabilities
|
13
|
|
|
73,997
|
70,410
|
Income tax
|
17
|
|
|
493,611
|
543,508
|
|
|
|
|
3,109,298
|
3,353,248
|
Total liabilities
|
|
|
|
3,387,079
|
3,710,804
|
Total equity and liabilities
|
|
|
|
8,431,036
|
8,687,491
|
CoMPANY STATEMENT OF
FINANCIAL POSITION at 31 december 2023
|
|
|
|
31/12/23
|
31/12/22
|
|
Notes
|
|
|
|
|
|
|
|
|
£
|
£
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
9
|
|
|
505,184
|
598,044
|
Intangible assets
|
10
|
|
|
45,331
|
70,142
|
Goodwill
|
10
|
|
|
342,872
|
342,872
|
Investment in
subsidiaries
|
11
|
|
|
884,239
|
284,239
|
|
|
|
|
1,777,626
|
1,295,297
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
12
|
|
|
166,298
|
87,924
|
Cash and cash equivalents
|
15
|
|
|
1,406,811
|
1,925,466
|
|
|
|
|
1,573,109
|
2,013,390
|
Total assets
|
|
|
|
3,350,735
|
3,308,687
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
Share capital
|
16
|
|
|
111,828
|
111,828
|
Capital redemption
reserve
|
|
|
|
9,845
|
9,845
|
Retained earnings
|
|
|
|
1,840,421
|
625,967
|
Total equity attributable to the
equity holders
|
|
|
|
1,962,094
|
747,640
|
|
|
|
|
|
|
Non-current Liabilities
|
|
|
|
|
|
Deferred Tax
|
7
|
|
|
55,523
|
61,006
|
Lease Liabilities
|
13
|
|
|
223,514
|
297,512
|
|
|
|
|
279,037
|
358,518
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
17
|
|
|
541,996
|
1,615,986
|
Lease liabilities
|
13
|
|
|
73,997
|
70,410
|
Income tax
|
17
|
|
|
493,611
|
516,133
|
|
|
|
|
1,109,604
|
2,202,529
|
Total liabilities
|
|
|
|
1,388,641
|
2,561,047
|
Total equity and liabilities
|
|
|
|
3,350,735
|
3,308,687
|
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
|
Share
capital
|
Merger
reserve
|
Capital
redemption reserve
|
Retained
earnings
|
Total
equity
|
|
£
|
£
|
£
|
£
|
£
|
At 1
January 2022
|
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
|
Profit for
the financial year
|
-
|
-
|
-
|
3,981,233
|
3,981,233
|
Dividends
|
-
|
-
|
-
|
(3,913,962)
|
(3,913,962)
|
At 31
December 2023
|
111,828
|
9,900
|
9,845
|
4,912,385
|
5,043,958
|
COMPANY STATEMENT OF CHANGES
IN EQUITY
|
Share
capital
|
Capital
redemption reserve
|
Retained
earnings
|
Total
equity
|
|
£
|
£
|
£
|
£
|
At 1
January 2022
|
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
|
Profit for
the financial year
|
-
|
-
|
5,128,416
|
5,128,416
|
Dividends
|
-
|
-
|
(3,913,962)
|
(3,913,962)
|
At 31
December 2023
|
111,828
|
9,845
|
1,840,421
|
1,962,094
|
statement OF
cashflows
for the year ended 31
december 2023
|
|
CONSOLIDATED
|
COMPANY
|
|
|
Year to
|
Year
to
|
Year to
|
Year
to
|
|
|
31/12/23
|
31/12/22
|
31/12/23
|
31/12/22
|
|
Notes
|
|
|
|
|
|
|
£
|
£
|
£
|
£
|
Cash flow from operating
activities
|
|
|
|
|
|
Profit before income tax
|
|
5,210,589
|
6,138,026
|
6,710,558
|
6,250,665
|
Depreciation and
amortisation
|
5
|
118,421
|
131,203
|
118,421
|
131,203
|
Lease finance cost
|
|
17,090
|
5,785
|
17,090
|
5,785
|
|
|
5,346,100
|
6,275,014
|
6,846,069
|
6,387,653
|
|
|
|
|
|
|
(Increase) /Decrease in trade and
other receivables
|
1,377,319
|
2,971,537
|
(78,374)
|
51,034
|
(Decrease) /Increase in trade
payables
|
|
(197,640)
|
(2,161,711)
|
(1,399,106)
|
(813,317)
|
Cash generated from operations
|
|
6,525,779
|
7,084,840
|
5,368,589
|
5,625,370
|
|
|
|
|
|
|
Income tax
(paid)/received
|
|
(1,285,032)
|
(1,323,288)
|
(1,285,032)
|
(772,817)
|
Net
cash from operating activities
|
|
5,240,747
|
5,761,552
|
4,083,557
|
4,852,553
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
-
|
(12,583)
|
-
|
(12,448)
|
Purchase of investments held for
trading
|
|
(57,933)
|
(2,797,364)
|
-
|
-
|
Proceeds from sale of investments
held for trading
|
|
54,736
|
2,790,552
|
-
|
-
|
Investments in
subsidiaries
|
|
-
|
-
|
(600,000)
|
-
|
Purchase of intangible
assets
|
|
(750)
|
(12,448)
|
(750)
|
(12,583)
|
Cash flows from investing activities
|
|
(3,946)
|
(31,843)
|
(600,750)
|
(25,031)
|
|
|
|
|
|
|
Dividends paid
|
|
(3,913,962)
|
(5,144,065)
|
(3,913,962)
|
(5,144,065)
|
Lease finance costs
|
|
(17,090)
|
(5,875)
|
(17,090)
|
(5,875)
|
Repayment of lease
liability
|
|
(70,410)
|
(81,626)
|
(70,410)
|
(81,626)
|
Net cash used in financing
activities
|
|
(4,001,462)
|
(5,231,566)
|
(4,001,462)
|
(5,231,566)
|
|
|
|
|
|
|
Net (decrease)/ increase in cash
& cash equivalents
|
1,235,338
|
(498,143)
|
(518,655)
|
(404,044)
|
Cash and cash equivalents at the
start of the year
|
4,278,737
|
3,780,594
|
1,925,466
|
2,329,510
|
Cash and cash equivalents at the end
of the year
|
5,514,075
|
4,278,737
|
1,406,811
|
1,925,466
|
Cash and cash equivalents:
|
|
|
|
|
Balance at bank and in
hand
|
5,169,380
|
5,499,464
|
1,406,811
|
1,925,466
|
Cash held for settlement of market
transactions
|
344,695
|
(1,220,727)
|
-
|
-
|
|
5,514,075
|
4,278,737
|
1,406,811
|
1,925,466
|
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 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.
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.
2.
Accounting policies (continued)
(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 2023.
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.
2.
Accounting policies (continued)
(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 temporary 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.
2.
Accounting policies (continued)
(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.
|
2023
|
|
2022
|
|
£
|
|
£
|
Gross
interest earned from treasury deposits, cash at bank and overdrawn
client accounts
|
7,614,815
|
|
5,472,439
|
Commissions
|
2,660,896
|
|
3,812,087
|
Fees
|
2,813,196
|
|
3,321,990
|
|
13,088,907
|
|
12,606,516
|
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
|
2023
|
|
2022
|
Profit
before income tax is stated after charging/(crediting):
|
£
|
|
£
|
Directors'
emoluments
|
586,881
|
|
598,733
|
Depreciation - right of use asset
|
76,997
|
|
79,979
|
Depreciation - owned assets
|
15,863
|
|
14,393
|
Amortisation (included within administrative expenses in the
consolidated income statement)
|
25,561
|
|
25,668
|
Low value
leases
|
8,852
|
|
8,852
|
Impairment
of receivable charge / (credit)
|
(65,466)
|
|
(77,450)
|
Bank
transaction fees
|
51,362
|
|
65,914
|
Details of directors' annual
remuneration as at 31 December 2023 are set out below:
|
2023
|
|
2022
|
|
£
|
|
£
|
Short-term
employee benefits
|
510,823
|
|
550,551
|
Post-employment benefits
|
62,893
|
|
40,000
|
Benefits in
kind
|
13,165
|
|
8,182
|
|
586,881
|
|
598,733
|
Details of
the highest paid director are as follows:
|
|
|
|
Aggregate
emoluments
|
357,500
|
|
415,700
|
Benefits in
kind
|
11,133
|
|
8,182
|
|
368,633
|
|
423,882
|
|
|
|
|
|
|
Emoluments
& Benefits in kind
|
Pension
|
|
Total
|
Directors
|
|
|
|
|
£
|
£
|
|
£
|
Andrew J
Grant
|
|
|
|
|
368,633
|
-
|
|
368,633
|
Kieran M
Price
|
|
|
|
|
31,199
|
2,167
|
|
33,366
|
Jolyon C
Head
|
|
|
|
|
98,156
|
60,726
|
|
158,882
|
S M
Middleton
|
|
|
|
|
26,000
|
-
|
|
26,000
|
TOTAL
|
|
|
|
|
523,988
|
62,893
|
|
586,881
|
During the year benefits accrued for
two directors (2022: one director) 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:
|
|
2023
|
|
2022
|
Management
and administration
|
54
|
|
59
|
The
aggregate payroll costs of these persons were as
follows:
|
£
|
|
£
|
Wages &
salaries
|
2,306,091
|
|
2,274,813
|
Social
security
|
243,955
|
|
244,034
|
Pension
contributions including salary sacrifice
|
107,971
|
|
78,610
|
|
2,658,017
|
|
2,597,457
|
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
£80,549 (2022: £75,840).
Exceptional administrative
costs
Exceptional administrative
costs represent external third party professional advice and
consultancy relating to the ongoing remediation and skilled persons
work within the firm's subsidiary Jarvis Investment Management
Limited.
6.
Auditors' remuneration
|
|
|
|
During the year the company obtained
the following services from the company's auditors as detailed
below:
|
|
2023
|
|
2022
|
|
£
|
|
£
|
Fees
payable to the company's auditors for the audit of the company's
annual financial
|
|
|
|
statements
|
33,000
|
|
28,000
|
Fees payable to the
company's auditors and its associates for other
services:
|
|
|
|
The audit
of the company's subsidiaries, pursuant to legislation
|
17,000
|
|
15,000
|
Total audit
fees
|
50,000
|
|
43,000
|
Taxation
Compliance
|
5,650
|
|
5,560
|
|
55,650
|
|
48,560
|
The audit costs of the
subsidiaries were invoiced to and met by Jarvis Securities
plc.
|
|
|
|
|
7. Income
and deferred tax charges - group
|
2023
|
|
2022
|
|
|
£
|
|
£
|
|
Based on
the adjusted results for the year:
|
|
|
|
|
UK
corporation tax
|
1,231,304
|
|
1,165,733
|
|
Adjustments
in respect of prior years
|
3,830
|
|
(546)
|
|
Total
current income tax
|
1,235,134
|
|
1,165,187
|
|
Deferred
income tax:
|
|
|
|
|
Origination
and reversal of temporary differences
|
(5,779)
|
|
(1,883)
|
|
Adjustment
in respect of prior years
|
2
|
|
(1)
|
|
Adjustment
in respect of change in deferred tax rates
|
-
|
|
-
|
|
Total
deferred tax charge
|
(5,777)
|
|
(1,884)
|
|
|
1,229,357
|
|
1,163,303
|
|
|
|
|
|
|
|
|
|
|
The income tax assessed for the year
is more than the standard rate of corporation tax in the UK
(23.5%). The differences are explained below:
|
|
Profit
before income tax
|
5,210,589
|
|
6,138,026
|
|
|
Profit
before income tax multiplied by the standard rate of corporation
tax in the UK of
|
|
|
|
|
|
23.5% (2022
- 19%)
|
1,225,559
|
|
1,166,225
|
|
|
Effects
of:
|
|
|
|
|
|
Expenses
not deductible for tax purposes
|
-
|
|
-
|
|
|
Adjustments
to tax charge in respect of previous years
|
3,832
|
|
(547)
|
|
|
Ineligible
depreciation
|
397
|
|
320
|
|
|
Adjustment
in respect of change in deferred tax rate
|
(431)
|
|
(2,695)
|
|
|
Current
income tax charge for the years
|
1,229,356
|
|
1,163,303
|
|
|
|
|
|
|
|
Movement in (assets) /
provision - group:
|
|
|
|
Provision
at start of year
|
60,044
|
|
61,928
|
Deferred
income tax charged in the year
|
(5,778)
|
|
(1,884)
|
Provision
at end of year
|
54,266
|
|
60,044
|
Movement in (assets) /
provision - company:
|
|
|
|
Provision
at start of year
|
61,006
|
|
62,847
|
Deferred
income tax charged in the year
|
(5,483)
|
|
(1,841)
|
Provision
at end of year
|
55,523
|
|
61,006
|
8. Earnings
per share
|
|
|
2023
|
|
2022
|
|
|
|
|
£
|
|
£
|
Earnings:
Earnings
for the purposes of basic and diluted earnings per share
|
|
|
|
|
(profit for the period
attributable to the equity holders of the parent)
|
|
3,981,233
|
|
4,974,723
|
Number of
shares:
|
|
|
|
Weighted
average number of ordinary shares for the purposes of basic
earnings per share
|
44,731,000
|
|
44,731,000
|
|
|
|
|
|
44,731,000
|
|
44,731,000
|
|
|
|
|
|
|
|
9.
Property, plant & equipment - group & company
|
Right of
use assets - Leasehold
|
Leasehold
& Property
|
Office
Equipment
|
|
Total
|
Cost:
|
|
|
|
£
|
£
|
£
|
|
£
|
At 1
January 2022
|
|
|
|
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
|
Additions
|
|
|
|
-
|
-
|
-
|
|
-
|
Disposals
|
|
|
|
-
|
-
|
-
|
|
-
|
At 31
December 2023
|
|
|
|
384,985
|
222,450
|
73,112
|
|
680,547
|
Depreciation:
|
|
|
|
|
|
|
|
|
At 1
January 2022
|
|
|
|
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
|
Charge for
the year
|
|
|
|
76,997
|
1,949
|
13,914
|
|
92,860
|
On
Disposal
|
|
|
|
-
|
-
|
-
|
|
-
|
At 31
December 2023
|
|
|
|
96,247
|
22,901
|
56,215
|
|
175,363
|
Net Book
Value:
|
|
|
|
|
|
|
|
|
At 31
December 2023
|
|
|
|
288,738
|
199,549
|
16,897
|
|
505,184
|
|
|
|
|
|
|
|
|
|
At 31
December 2022
|
|
|
|
365,735
|
201,498
|
30,811
|
|
598,044
|
The net book value of non-depreciable
land is £125,000 (2022: £125,000).
10.
Intangible assets & goodwill - group & company
|
|
|
Intangible assets
|
|
Goodwill
|
|
Databases
|
Software
Development
|
Website
|
|
Total
|
|
|
|
£
|
|
£
|
£
|
£
|
|
£
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
At 1
January 2022
|
|
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
|
|
Additions
|
|
-
|
|
-
|
750
|
-
|
|
750
|
|
Disposals
|
|
-
|
|
-
|
-
|
-
|
|
-
|
|
At 31
December 2023
|
|
342,872
|
|
25,000
|
147,538
|
3,877
|
|
176,415
|
|
Amortisation:
|
|
|
|
|
|
|
|
|
|
At 1
January 2022
|
|
-
|
|
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
|
|
Charge for
the year
|
|
-
|
|
1,000
|
23,269
|
1,292
|
|
25,561
|
|
On
Disposal
|
|
-
|
|
-
|
-
|
-
|
|
-
|
|
At 31
December 2023
|
|
-
|
|
20,636
|
107,003
|
3,445
|
|
131,084
|
|
Net Book
Value:
|
|
|
|
|
|
|
|
|
|
At 31
December 2023
|
|
342,872
|
|
4,364
|
40,536
|
432
|
|
45,331
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2022
|
|
342,872
|
|
5,364
|
63,054
|
1,724
|
|
70,142
|
|
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
|
|
|
|
|
|
2023
|
|
2022
|
Unlisted
Investments:
|
|
|
|
|
£
|
|
£
|
Cost:
|
|
|
|
|
|
|
|
At 1
January
|
|
|
|
|
284,239
|
|
284,239
|
Investments
during the year
|
|
|
|
|
600,000
|
|
-
|
As at 31
December
|
|
|
|
|
884,239
|
|
284,239
|
|
Shareholding
|
Holding
|
Business
|
Jarvis
Investment Management Limited
|
100%
|
85,000,000
|
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:
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
£
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Trade
receivables
|
781,000
|
|
381,367
|
|
106,899
|
|
-
|
Settlement
receivables
|
821,072
|
|
2,498,019
|
|
-
|
|
-
|
Other
receivables
|
21,875
|
|
83,910
|
|
21,875
|
|
83,911
|
Prepayments
and accrued income
|
350,037
|
|
425,631
|
|
21,875
|
|
1,750
|
Other taxes
and social security
|
37,624
|
|
-
|
|
15,648
|
|
2,263
|
|
2,011,608
|
|
3,388,927
|
|
166,298
|
|
87,924
|
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 2023 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
|
65,625
|
-
|
Finance charge
|
13,503
|
9,733
|
5,711
|
1,607
|
-
|
Net present value
|
73,997
|
77,767
|
81,729
|
64,018
|
-
|
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
|
|
2023
|
Lease liabilities included in the
current statement of financial position
|
£
|
Current
|
73,997
|
Non-current
|
223,515
|
|
297,512
|
|
|
|
2022
|
|
£
|
Amounts recognised in income
statement
|
17,090
|
|
17,090
|
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 2023 was
£87,500.
14.
Investments held for trading
|
Group
|
|
Company
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Listed
Investments:
|
£
|
|
£
|
|
£
|
|
£
|
|
Valuation:
|
|
|
|
|
|
|
|
|
At 1
January
|
8,769
|
|
1,958
|
|
-
|
|
-
|
|
Additions
|
57,933
|
|
2,797,363
|
|
-
|
|
-
|
|
Disposals
|
(54,736)
|
|
(2,790,552)
|
|
-
|
|
-
|
|
As at 31
December
|
11,966
|
|
8,769
|
|
-
|
|
-
|
|
|
Listed
investments held for trading are stated at their market value at 31
December 2023 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
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
£
|
|
£
|
|
£
|
|
£
|
|
Balance at
bank and in hand - group/company
|
5,169,380
|
|
5,499,464
|
|
1,406,811
|
|
1,925,466
|
|
Cash held
for settlement of market transactions
|
344,695
|
|
(1,220,727)
|
|
-
|
|
-
|
|
|
5,514,075
|
|
4,278,737
|
|
1,406,811
|
|
1,925,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 £376,394 (2022 :
£1,088,375) 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
|
2023
|
|
2022
|
Authorised:
64,000,000
Ordinary shares of 0.25p each
|
160,000
|
|
160,000
|
|
|
|
|
|
2023
|
|
2022
|
|
£
|
|
£
|
At 1
January 2023 and 2022
|
111,828
|
|
111,828
|
Allotted,
issued and fully paid:
|
|
|
|
44,731,000
(2022: 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:
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
£
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Trade
payables
|
461,328
|
|
231,920
|
|
8,829
|
|
13,586
|
Settlement
payables
|
1,126,083
|
|
1,219,465
|
|
-
|
|
-
|
Amount owed
to group undertaking
|
-
|
|
-
|
|
482,067
|
|
1,549,300
|
Other taxes
and social security
|
-
|
|
125,646
|
|
-
|
|
-
|
Other
payables
|
627,239
|
|
808,027
|
|
-
|
|
-
|
Accruals
|
327,040
|
|
354,272
|
|
51,100
|
|
53,100
|
Trade and
other payables
|
2,541,690
|
|
2,739,330
|
|
541,996
|
|
1,615,986
|
Lease
liabilities
|
73,997
|
|
70,410
|
|
73,997
|
|
70,410
|
Income
tax
|
493,611
|
|
543,508
|
|
493,611
|
|
516,133
|
Total
liabilities
|
3,109,298
|
|
3,353,248
|
|
1,109,604
|
|
2,202,529
|
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
|
2023
|
|
2022
|
|
£
|
|
£
|
Interim
dividends paid on Ordinary 1p shares
|
3,913,962
|
|
5,144,065
|
Dividend
per Ordinary 1p share
|
8.75
|
|
11.5
|
Please refer to the directors'
report for dividends declared post year end.
19. Financial Instruments
The group's principal financial
instruments comprise cash 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. Immediate and ultimate parent
undertaking
There is no immediate or ultimate
controlling party.
21.
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 £18,000 (2022:
£12,500) for rental of a disaster recovery site.
Jarvis Securities plc owed Jarvis
Investment Management Limited £482,067 (2022: £1,549,300) 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 2023, these same related
parties had cash balances of £44,738 (2022: £810,742). No interest
was earned during the year (2022: £0). In addition to cash
balances other equity assets of £4,151,917 (2022: £30,479,543) were
held by JIM Nominees Ltd as custodian.
During the year Jarvis Securities
Plc charged £7,365,165 (2022: £4,871,178) to Jarvis Investment
Management Limited for use of intellectual properties.
At the period end Directors directly
held 11,125,620 shares in the company (2022: 11,203,924). A further
12,546,130 shares (2022: 12,547,330) shares were held by concert
parties of the directors as defined by the City Code on Takeovers
and Mergers.
22.
Capital commitments
As of 31 December 2023, the company
had no capital commitments (2022: nil).
23.
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.
24.
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 any 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. Though 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 monitored as a potential 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 regularly 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 2023, trade receivables of £275,691 (2022: £128,948) were
past due and were impaired and partially provided for. The amount
of the provision was £35,506 as at 31 December 2023 (2022:
£57,828). 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:
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
£
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
At 1
January
|
57,828
|
|
143,524
|
|
-
|
|
-
|
Charge /
(credit) for the year
|
(13,724)
|
|
(77,450)
|
|
-
|
|
-
|
Uncollectable amounts written off
|
(8,598)
|
|
(8,246)
|
|
-
|
|
-
|
At 31
December
|
35,506
|
|
57,828
|
|
-
|
|
-
|