Shares in stockbroker and financial services outsource provider Jarvis Securities (JIM) have been flying this year. In fact, they have risen by 80 per cent since the company's full-year results in February.
In the circumstances, it would be no surprise to see the directors tempted to take some profit on their holdings, but in the case of chief executive Andrew Grant the motive for selling was entirely different. Following a recent series of meetings with institutional investors, Mr Grant agreed to sell 250,000 shares at 400p in order to match demand in the market. The disposal was agreed at a price just shy of this month's 420p all-time high, so the fund managers are clearing confident there is medium-term upside even after the storming share price performance. It's worth pointing out that the sale only represents a small proportion of Mr Grant's total holding as he still retains 6.17m shares, representing 57.5 per cent of the issued share capital, so still has a significant interest in the shares.
The surge in the company's share price is fully warranted, too, being driven by a significant uptick in business. Jarvis announced a 45 per cent surge in half-year pre-tax profits to a record £1.52m, fuelled by a 17 per cent rise in revenues to £3.5m. Pre-tax margins improved by 9 percentage points to a mightily impressive 44 per cent, and revenue per employee increased by 11 per cent to £183,000. Importantly, the customer base was up 13 per cent, taking the total to well over 65,000 retail clients. There is also a growing number of institutional clients.
Following a number of earnings upgrades this year, analyst Nick Spoliar at brokerage WH Ireland expects Jarvis to report full-year EPS of 21p, up from 16.6p in 2012. As I have pointed out previously, Jarvis has a stated policy of paying out two-thirds of its net earnings as a quarterly dividend so expect a full-year payout of 14p this year. On this basis the prospective yield is around 3.5 per cent with the shares currently trading on a bid offer spread of 405p to 410p. The second quarter dividend of 3.5p a share is payable on 12 September (ex-dividend: 21 August). Jarvis can certainly afford to fund it as low-yielding cash on the balance sheet has more than trebled in the past year to £8.8m, the equivalent of 82p a share. Strip this out and the shares are trading on 15 times earnings estimates. That is looking more like fair value, but if you followed my advice to buy the shares at the start of the year it's worth running your profits as further earnings upgrades seem a realistic possibility.
Fore more on Jarvis Securities, see Simon Thompson's homepage, where he has covered the company in depth in several articles.
BUYS
| Company | Director | Date | No of shares | Price (p) | Value (£) | Holding (shares) |
|---|---|---|---|---|---|---|
| Aberforth Geared Income Trust | Michael Greig | 05 Aug 13 | 5,010 | 140.25 | 7,027 | 46,836 |
| Aberforth Geared Income Trust * | Michael Greig | 05 Aug 13 | 4,104 | 140.25 | 5,756 | 50,940 |
| Aberforth Smaller Companies Trust | P Trickett | 05 Aug 13 | 2,500 | 945 | 23,625 | 2,500 |
| Armadale Capital † | Paul Marks (ch) | 01 Aug 13 | 33,333,400 | 0.075 | 25,000 | 41,695,400 |
| Armadale Capital † | Justin Lewis | 01 Aug 13 | 60,000,000 | 0.075 | 45,000 | 60,000,000 |
| Athelney Trust | RG Boyle | 05 Aug 13 | 3,105 | 135 | 4,192 | 462,075 |
| Chamberlin | Keith Butler-Wheelhouse (ch) | 09 Dec 13 | 20,000 | 80 | 16,000 | 84,368 |
| Chaarat Gold Holdings * | Alexander Novak | 02 Aug 13 | 99,954 | 10 | 9,995 | 11,075,312 |
| COLT SA | Anthony P Rabin | 02 Aug 13 | 10,000 | 102.2 | 10,220 | 10,000 |
| Equatorial Palm Oil † | Michael Frayne (ch) | 02 Aug 13 | 1,815,000 | 6 | 108,900 | 2,065,000 |
| Equatorial Palm Oil † | Joseph Jaoudi | 02 Aug 13 | 83,333 | 6 | 5,000 | 6,592,833 |
| Equatorial Palm Oil † | Anthony Samaha | 02 Aug 13 | 216,667 | 6 | 13,000 | 704,107 |
| F & C Asset Management * | E J Bramson (ch) | 01 Aug 13 | 10,000 | 99.27 | 9,927 | 205,000 |
| F & C Asset Management * | E J Bramson (ch) | 01 Aug 13 | 10,000 | 99.27 | 9,927 | 215,000 |
| Great Eastern Energy Corp (GDR) | Yogendra Modi (ch & ce) | 07 Aug 13 | 27,575 | 205 | 56,529 | 35,374,417 |
| Hrvatski Telekom DD | D Grbavac | 02 Aug 13 | 1,789 | 3,066.933 | 54,867 | 6,038,389 |
| Hrvatski Telekom DD | D Grbavac | 01 Aug 13 | 2,234 | 3,092.193 | 69,080 | 6,036,600 |
| Hutchison China Meditech | Christopher Nash | 07 Aug 13 | 8,506 | 584 | 49,675 | 26,506 |
| Intu Properties | Andrew Huntley | 02 Aug 13 | 6,000 | 332.724 | 19,963 | 18,000 |
| Legal & General | Rudy Markham (vch) | 01 Aug 13 | 1,807 | 194.585 | 3,516 | 213,611 |
| Legal & General | John Stewart (ch) | 01 Aug 13 | 3,831 | 194.585 | 7,455 | 260,037 |
| Legal & General | Mike Fairey | 01 Aug 13 | 839 | 194.585 | 1,633 | 33,643 |
| Legal & General | Stuart Popham | 01 Aug 13 | 839 | 194.585 | 1,633 | 34,430 |
| Legal & General | Lindsay Tomlinson | 01 Aug 13 | 923 | 194.585 | 1,796 | 2,672 |
| Nakama | E K Ford (ch) | 01 Aug 13 | 197,140 | 1.24 | 2,445 | 13,999,997 |
| Pinnacle Technology | A J Bonner (ce) | 07 Aug 13 | 28,000 | 18 | 5,040 | 2,275,224 |
| Record | J Wood-collins (ce) | 01 Aug 13 | 27,190 | 37 | 10,060 | 1,853,754 |
| Rolls-Royce Holdings | I Davis (ch) | 07 Aug 13 | 166 | 1,196 | 1,985 | 5,907 |
| Rolls-Royce Holdings | Iain Conn | 07 Aug 13 | 207 | 1,196 | 2,476 | 26,493 |
| Rolls-Royce Holdings | John Neill | 07 Aug 13 | 207 | 1,196 | 2,476 | 40,400 |
| Rolls-Royce Holdings | Sir Frank Chapman | 07 Aug 13 | 250 | 1,196 | 2,990 | 3,587 |
| Surface Transforms | David Bundred (ch) | 01 Aug 13 | 100,000 | 8 | 8,000 | 375,000 |
| Surface Transforms | Richard Gledhill | 01 Aug 13 | 645,000 | 8.5 | 54,825 | 8,743,153 |
SELLS:
| Company | Director | Date | No of shares | Price (p) | Value (£) | Holding (shares) |
|---|---|---|---|---|---|---|
| WS Atkins | Dr. Krishnamurthy Rajagopal | 02 Aug 13 | 10,000 | 1,154.42 | 115,442 | 5,000 |
| Brammer | Paul Thwaite (fd) | 05 Aug 13 | 24,277 | 415 | 100,750 | 1,024,873 |
| Cropper (James) | John M Denman (fd) | 06 Aug 13 | 5,000 | 282.5 | 14,125 | 16,960 |
| Cropper (James) * | John M Denman (fd) | 06 Aug 13 | 5,000 | 282.5 | 14,125 | 12,127 |
| DCC * | Fergal O'Dwyer (cfo) | 06 Aug 13 | 24,000 | 2,667 | 640,080 | 240,389 |
| Dignity * | Mike McCollum (ce) | 02 Aug 13 | 54,614 | 1,490 | 813,749 | 215,386 |
| Domino Printing Sciences | Garry Havens | 06 Aug 13 | 6,000 | 646 | 38,760 | 44,390 |
| Domino's Pizza * | Stephen Hemsley (ch) | 02 Aug 13 | 500,000 | 570 | 2,850,000 | 600,000 |
| Domino's Pizza * | Nigel Wray | 02 Aug 13 | 4,910,179 | 570 | 27,988,020 | 0 |
| Fidelity European Values | Simon Fraser | 06 Aug 13 | 20,000 | 1,497 | 299,400 | 7,059 |
| Inmarsat | Andrew Sukawaty (ch) | 07 Aug 13 | 200,000 | 700 | 1,400,000 | 812,274 |
| Invensys | Victoria Hull (cs) | 07 Aug 13 | 19,095 | 496 | 94,711 | 258,515 |
| Jarvis Securities * | Andrew Grant (ch & ce) | 07 Aug 13 | 250,000 | 400 | 1,000,000 | 6,168,150 |
| KCom | Paul Simpson (cfo) | 02 Aug 13 | 180,089 | 83.65 | 150,644 | 1,265,865 |
| KCom | Kevin Walsh | 02 Aug 13 | 500,000 | 83.65 | 418,250 | 1,105,190 |
| KCom * | Paul Simpson (cfo) | 02 Aug 13 | 749,911 | 83.65 | 627,301 | 515,954 |
| KCom * | Kevin Walsh | 02 Aug 13 | 500,000 | 83.65 | 418,250 | 605,190 |
| Lo-Q | Anthony Bone | 01 Aug 13 | 100,000 | 600 | 600,000 | 201,517 |
| Private & Commercial Finance | Tony Nelson | 07 Aug 13 | 120,012 | 9 | 10,801 | 1,538,494 |
* Connected party or spouse † Placing
Key to abbreviations: ch = chairman; ce = chief executive; cfo = chief financial officer; fd = finance director; coo = chief operating officer; cs =company secretary; md = managing director
