The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.

 

Jarvis Securities plc

("Jarvis Securities" or "the Company" and with its subsidiaries the "Group")

 Audited Results for the 18 months ended 30 June 2025

FCA Update

Notice of General Meeting

 

CHAIRMAN'S STATEMENT

 

 

The release of final audited accounts for the Company was delayed in July 2025, and the Company's accounting reference date was extended to 30 June 2025 to allow the completion by Jarvis Investment Management (JIML) of the sale of its retail execution-only brokerage clients.  I am pleased to confirm that the transaction completed and JIML received the initial sale proceeds of £9m on 8 July 2025 ("Completion").  Two further deferred consideration payments are due of £1m each, payable twelve and twenty four months after Completion subject to certain criteria as set out in the Company's announcement of 15 April 2025.

The Board of Jarvis Securities is committed to delivering an effective and efficient wind-down of JIML and it has now appointed S&W Partners LLP (S&W) to monitor this objective on its behalf.  The Directors believe a professional independent firm with extensive experience in the wind down of regulated entities will be better placed to challenge and advise and will be in the best interests of clients and shareholders. JIML is continuing to deliver the wind-down and clear the remediation tasks, therefore costs remain significant at this time.

Jarvis Securities continues to receive interest income, though much reduced due to the reduction in client money held by JIML.  So long as this continues together with other small revenue streams the Board will continue to review on a quarterly basis its ability to pay dividends.  The Directors currently believe JIML has headroom to cover its cost until the final close down of operations, which will be reviewed and monitored as part of the recent engagement with S&W.  JIML is currently restricted from paying up any dividend to JSP under the conditions of the Voluntary Agreed restrictions (VReQ) with the FCA (see announcement dated 16th September 2022).

S&W have also been asked to review the remaining business assets of the Group and advise if there are any further sales which might generate value. As at 29^th December 2025 the Group currently has cash of £10.4m.

As set out in the Company's announcement of 15 April 2025, whilst the Directors continue to keep their strategic options under review it is still the intention of the Directors to seek cancellation of the Company's admission to trading on AIM pursuant to AIM Rule 41 in due course (the "Proposed Cancellation").  The Proposed Cancellation would be subject to, inter alia, shareholder approval, with the expectation that any distributable reserves remaining in the Company at the time of the Proposed Cancellation would then be returned to shareholders.

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.

 

 

FCA Update

The Board of Jarvis also confirms today that as part of the wind down process and the ongoing engagement with the FCA, the board of its subsidiary company, JIML, has due to historic breaches of FCA conduct of business rules determined it has incurred an obligation to provide redress to certain clients. The first breach is in respect of inducement rules, specifically the sharing of commission with an introducer.  The second breach is with regards to unclear and potentially misleading language in legacy versions of the JIML client terms of business when describing the rate and circumstances in which interest would be paid on client money held. 

The details of the redress scheme are yet to be finalised, and are subject to engagement with the FCA. In addition, the calculation of the likely cost of any redress is complex and the directors of JIML have been required to make assumptions about how any financial redress payable to clients should be calculated, which clients should be included in the scope of the redress scheme and the percentage of clients that are expected to opt in to the redress scheme.   However, JIML, having taken legal advice, currently estimates that this will incur a liability over the next 12 months in the region of £2.8m.  Although, if the assumptions given above transpire to be incorrect, this amount may be materially adjusted in the future.  More details of this are set out in Note 25 (below)

General Meeting

The Company will today dispatch to shareholders its Annual Report and Accounts for the 18 months ended 30 June 2025, and a notice convening a General Meeting ("GM") of the Company, to approve the accounts to be held at Spa Hotel, Tunbridge Wells, TN4 8XJ on 29 January 2026 at 9am. The Annual Report and Accounts and Notice of GM will also be available from the Company's website,  www.jarvissecurities.co.uk .

 

Andrew Grant

Chairman

 

 

Kieran Price, Finance Director of Jarvis Securities Plc, has approved this announcement and authorised its release.  

Enquiries: 

Jarvis Securities plc                                                            [email protected]

Andrew Grant

 Zeus Capital                                                                        020 3829 5000

 Katy Mitchell

 

 

STRATEGIC REPORT

Key developments and outlook

In September 2022 the firm's regulated subsidiary Jarvis Investment Management Limited ("JIML") agreed to a voluntary restriction with the FCA of certain regulated activities, and the appointment of a skilled person to review their systems and controls.

Throughout 2023, 2024 and 2025 to date JIML  has continued to co-operate with the FCA and the skilled person by providing all information requested and to develop systems and controls as recommended by the skilled person. This has been a resource intensive process and taken a considerable amount of management's time as well as internal and external cost.

One outcome of this process has been the recruitment of a number of senior staff with the specialist skills required to take the business out of the voluntary restriction. This resulted in a significant, and permanent, increase to the cost base of the regulated entity. At the same time, the firm's number of model B clients continued to reduce, impacting trading volumes and therefore revenue prior to the decision to wind-down.

The external developments of the economy are widely known. Central bank policy of using interest rates in order to subdue price inflation continued though to August 2024, after which rates began to fall as inflationary pressures reduced. This has continued to be the case, reducing the revenue available from client money treasury deposits. Also, increased price competition from an increasing number of much larger firms who are able to take advantage of a number of economies of scale that are not available to Jarvis.

The above internal and external factors have been the key contributors to the firm's decision to sell the retail client book, give notice to all corporate clients, and wind-down the remaining business. This culminated in the announcement on 15^th April 2025 of JIML entering into a conditional sale agreement disposing of its retail execution-only brokerage business to Interactive Investor Services Limited for a consideration of up to £11,000,000 payable in cash. The sale completed on 7^th July 2025 and the first amount payable of £9,000,000 was received by JIML on 8^th July 2025. Following the sale, JIML is currently in the process of winding down Subsequently, two items of redress have been identified within JIML, and financial provisions have been made as detailed within these financial statements.

Jarvis Securities Plc continues to review its strategic options, though once JIML's operations are wound down, the firm would then no longer own, control, or conduct any trading business. Accordingly, pursuant to AIM Rule 15 the firm  would, at that time, become an AIM Rule 15 Cash Shell and would be required to make an acquisition or acquisitions that constitutes a reverse takeover under AIM Rule 14, within 6 months of becoming an AIM Rule 15 Cash Shell. It is currently anticipated Jarvis will become an AIM Rule 15 Cash Shell on the date that all, or substantially all, of JIML's client agreements or assets are transferred to a third party.

At this time, the Directors do not intend to make any acquisitions. Whilst they continue to keep their strategic options for the remaining assets of the Group under review, the Directors currently intend to seek a cancellation of the Company's admission to trading on AIM pursuant to AIM Rule 41 (the "Proposed Cancellation") in due course, with the expectation that, following the lifting of the VREQ, any distributable reserves remaining in the Company at the time of the Proposed Cancellation would then be returned to shareholders. The Proposed Cancellation would be subject, inter alia, to shareholder approval. Further announcements will be made in due course.  

Performance

 

Results and quarterly dividends (pence per share)

The consolidated profit for the period after income tax amounted to £2,182,644 (Year to 31^st December 2023: £3,981,233). The company paid quarterly interim dividends per share totalling 6.75p during the period (Year to 31^st December 2023: 8.75p). The company will review dividends on a quarterly basis. A special dividend of 2.9p was declared on 31^st July 2025. No final dividend is proposed by the board.

 

Annual Dividend (pence per share)

 

* In 2015 in addition to total quarterly dividends of 4.125p per share a 2.5p special dividend was also paid.

** In 2019 in addition to total quarterly dividends of 6.56p per share a 3.75p special dividend was also paid

*** In 2021 in addition to total quarterly dividends of 13.5p per share a 8.5p special dividend was also paid

The special dividends are excluded from the graph

 

 

 

Profit before tax - £m

 

 

The reduction in profit before tax on an annualised basis has been caused by lower commission income as trading volumes have continued to decrease, combined with continued significant internal and external remediation costs relating to the voluntary requirement and skilled person. These are reported within  Exceptional administrative expenses in the Consolidated Income Statement, which also includes legal fees in relation to the sale of the retail business and provisions for redress totalling £2,831,848. When adjusted, the PBT for the 18 months to 30^th June 2025 of £7.0m (being PBT £3.0m plus Exceptional administrative costs £4.0m) is lower on an annualised basis than the Year to 31^st December 2023 equivalent of £6.5m (being PBT £5.2m plus Exceptional administrative expenses £1.3m). These exceptional costs have been partially offset by increased average interest income over the period.

 

Trade Volumes - average daily volume (1)

 

 

Trade volumes have declined further during the 18 months to 30^th June 2025, due to a combination of markets conditions and reduction in Model B clients.

 

Cash under administration - average balance (1)

 

 

Cash under administration is a function of client numbers and trade volumes. During the 18 months to 30^th June 2025 cash under administration continued to decrease from prior periods, mainly due to the reduced volumes year-on-year.

 

(1) These graphs are to demonstrate the trend and values have been intentionally omitted

 

Group structure

The principal trading subsidiary of the group is Jarvis Investment Management Ltd. Jarvis Investment Management Ltd is the 100% owner of three dormant nominee companies. For regulatory reasons relating to administration and cost, Jarvis Securities plc is the AIM traded parent, holds most of the assets of the group and is responsible for activities that fall outside the scope of regulated investment business. Jarvis Investment Management Ltd is a Member of The London Stock Exchange (LSE) and Aquis Stock Exchange (AQSE) and is authorised and regulated by the Financial Conduct Authority (FCA). This status is essential for the trading activities of the group and therefore compliance with the rules of both the LSE and FCA is of paramount importance. The group provides retail execution-only stockbroking, ISA investment wrappers, and savings schemes. In addition, it provides financial administration, settlement and safe custody services in all these areas to other stockbrokers and investment firms as well as individuals.

 

Capitalisation and financing

 

Jarvis Securities plc had 64,000,000 authorised Ordinary 0.25p shares. Of these, 44,731,000 were in issue at the end of the period. These shares are admitted to trading on AIM.  The business requires no debt or external financing. The Board balance the use of cash between maintaining sufficient reserves for regulatory requirements, the stated dividend policy, and delivery the wind-down plan.

 

EPS and P/E ratio

 

The principal measures used by investors to compare and rate publicly traded companies are the earnings per share (EPS) and the relative multiple to these earnings of the current share price (the price earnings or P/E ratio). The Board must have regard to these measures in order to maximise returns to investors. EPS is a result of dividing profit after tax by the average number of shares in issue throughout the period. The P/E ratio is the average share price during the year divided by EPS. The average share price during the period was 49p (Year to 31^st December 2023: 123p). The P/E ratio is largely a product of the market price of the shares in the Company and hence is largely beyond the control of the Board. These measures are important to investors and hence need to be given high regard.

                                   

18 months to 30^th June 2025 EPS (annualised):   3.25p   

 

Year to 31^st December 2023 EPS:                                  8.90p   

 

Rate of change:                                                            -63.5% 

 

18 months to 30^th June 2025 P/E ratio:               10.08   

 

Year to 31^st December 2023 P/E ratio:               13.85   

 

Principal risks and uncertainties

 

The following are the main risks to the Jarvis Securities plc group that are considered and monitored by the board:

 

Revenue risk

 

The Jarvis business model has several income streams. These are primarily commission income, interest income and fixed fee income. As described earlier in this report, each of these areas has been subject to various external pressures, resulting in the decision to sell the retail execution-only brokerage business.

 

Regulatory risk

 

Changes in the regulatory environment resulting in additional costs or significant system or product amendments.

 

The firm operates in the "execution only", transaction processing and reporting, and safe custody areas of the financial services environment. Retail clients are currently only able to sell or hold assets. As part of ongoing risk management, the firm avoids entry into areas where it lacks expertise or that have additional regulatory complexities. The firm is currently undergoing a skilled person review and is using outside expertise as required to ensure the correct risk framework is established and the firm is fully compliant with its Consumer Duty obligations during the wind-down period.

 

Competitor risk

 

The firm operates in a competitive industry and has many larger competitors in the execution only retail and institutional market.

 

Cybercrime

 

Loss of data, client assets or corporate assets through breaches of our IT infrastructure would result in financial loss to the firm and reputational damage.

 

The board acknowledge the growing threat of cybercrime and maintain up to date industry standards in IT security. The firm's IT infrastructure is externally audited, policies and procedures are in place to minimise the risk of critical data loss, employees must complete ongoing training in money laundering and fraud prevention and all computers are installed with malware protection.

 

Interest rate risk

 

The interest rate environment has a significant effect on the earnings of the company. This risk is reducing as Jarvis Investment Management Limited's wind down progresses and the amount of client money deposits falls.

 

Economic risk

 

Market sentiment directly impacts on bargain numbers transacted and hence commission income for the company, however this is no longer significant as Jarvis Investment Management Limited is in wind-down and has recently moved to a hold/sell only product for remaining retail clients.

 

Reputational risk

 

As the custodian of the wealth of our clients, the firm adopts procedures that minimise the risk of fraudulent activity occurring either within the firm or by a third party.

 

Operational risk

 

The main risk Jarvis is exposed to in its day to day activities is settlement risk, and all procedures within the firm are designed to mitigate this risk where possible. There may be instances where errors occur which leave the firm unintentionally exposed to market risk as a result of an error in its operating processes. Given the volume of transactions being processed these errors are extremely infrequent. When they do occur, they are reviewed to see if further process enhancements can be made to minimise future errors.

 

Key personnel risk

 

Loss of key personnel is a threat to any skills-based business.

 

The firm attempts to set remuneration at competitive market levels and empower key employees so that they enjoy working at Jarvis. All employment contracts for key staff members include sufficient notice periods for replacements to be recruited and trained. Jarvis Investment Management Limited has designed and implemented a staff retention schedule, together with a financial package, to ensure that staff with the appropriate skills remain with the firm until the appropriate point within the wind down of the company. The firm has also introduced initiatives such as hybrid working for specific roles, flexibles hours etc. in order to attract and retain high calibre staff, which it acknowledges as a challenge especially given the firms outside London location.

 

 

Third party reliance risk

 

Any take over at the London Stock Exchange could result in major unanticipated changes for Jarvis and its commercial clients.

 

The board monitor any proposed changes to the pricing structure of The London Stock Exchange and will calculate any impact on the wind down of Jarvis Investment Management Limited.

 

Regulatory capital

Jarvis Investment Management Limited, the Group's main operating subsidiary, is a class 2 non-small and not interconnected firm (non SNI firm), authorised and regulated by the FCA, and together with its' parent, Jarvis Securities Plc, forms a UK Investment Firm Group.  At 30^th June 2025 Jarvis Investment Management Limited had regulatory capital resources of £0.7m and an Own Funds Threshold Requirement of £7.1m, giving a capital solvency ratio of 11% as at that time, the company was awaiting the completion of the sale of the execution-only retail brokerage business, which returns the capital solvency ratio to 204% as at 31^st July 2025.

 

Jarvis Investment Management Limited maintains an Internal Capital and Risk Assessment (ICARA), which includes reviewing the risks the firm is exposed to and performing a range of stress tests to determine the appropriate level of regulatory capital and liquidity required by Jarvis Investment Management Limited. Consolidated regulatory capital forecasts are performed quarterly prior to the payment of any dividend from Jarvis Securities Plc. Jarvis Investment Management Limited's MIFIDPRU 8 disclosures are published annually on the company's website and provide further details about the Company's regulatory capital resources and requirements.

 

Section 172(1) Statement

 

The directors act in good faith to make decisions, the outcome of which, they consider will be most likely to promote the success of the group for the benefit of its members as a whole both in current periods and in the long term.

 

In discharging their duties above, the directors carefully consider amongst other matters, the impact on and interests of other stakeholders in the group and factor these into their decision-making process.

 

Employees

 

Directors receive information on various staff metrics. The directors are committed to promoting a healthy workforce comprising both physical and mental wellbeing. The directors keep staff informed of key issues through structured communication channels, promote inclusion in the workplace and also provide training and development opportunities which are considered of benefit to the group and employees. Using the Group's recruitment and development strategies, the directors seek to attract and retain talented staff. A staff retention policy has been implemented to ensure staff are incentivised to remain with the firm for the required length of time in order to support the wind-down.

 

Customers

 

The directors commit considerable time, effort and resources into understanding and responding to the needs of our customers at all times. We act to service our customer's needs to the highest standards and have procedures in place for the escalation of disputes on the infrequent occasions they occur.

 

Suppliers

 

The Group seeks to pay all suppliers any undisputed amounts due and that conform with the Group's billing requirements within agreed terms.

 

Community and the environment

 

The Group takes its role within the community seriously and promotes and encourages community and charitable contribution. The Group also recognises the importance of environmental responsibilities and whilst not in an industry that has a significant impact on the environment, it participates in schemes such as cycle to work to promote environmental awareness.

 

Standards and conduct

 

The group has a series of defined codes of practice regarding ethical standards and the conduct of business. These are clearly communicated to every staff member and adherence to which is expected and enforced.