I turned buyer of the Aim-traded shares of Jarvis Securities (JIM:466p), a financial services outsourcer and retail client stockbroker, at around the current price last summer, since when the board has paid out total dividends of 26p a share (‘Jarvis offers medium-term value’, 15 August 2018). Financial results for the first half to 30 June 2019 only add to my enthusiasm.
Jarvis has two business units: a corporate division, which provides outsourced and partnered financial administration services to a number of third-party organisations, including pension funds and wealth managers, and has cash under administration in excess of £150m, all of which is placed on short-term deposit with triple-A-rated banks; and a broking operation that has more than 100,000 retail clients who use its ShareDeal-Active and X-O low-cost online share trading services.
In the latest six month trading period, the company increased pre-tax profit by 15 per cent to £2.4m on revenues up 9 per cent to £5.2m, a performance that reflects the impact of restructuring its commercial fee tariffs to take into account the additional £500,000 of costs incurred as a consequence of implementing the new Markets in Financial Instruments Directive (Mifid II), which held back first-half performance in 2018. The result was even more impressive given ongoing UK political and economic uncertainty has subdued market volumes.