26th Jul 2005 07:00
Jarvis Securities plc26 July 2005 Jarvis Securities plc (the "Company") Interim Results We are pleased to report our interim results to 30 June 2005 and our first sinceour admission to AIM. Financial Clearly we have been affected by the slowdown in retail stockbroking tradevolumes in the second quarter of 2005 with turnover only growing by 1.3%.Together with increased administrative costs our operating profit, excluding theexceptional costs of an aborted acquisition, has fallen by 21%. This isdisappointing but we are now well placed to make strong progress in the secondhalf of the year. Commercial Clients During the past six months we have been active in launching a Model B clearingservice to settle the trades of other London Stock Exchange members. From astanding start we have been able to obtain the necessary consents, makeadjustments to our system to operate this type of business, draft contracts andmarket our service. We have two clients already live and trading and very stronginterest at different stages from more firms with two more due to go liveimminently. We expect to be announcing further contract wins throughout the restof 2005. We have also been experiencing increasing interest in our otheroutsourced financial administration services, particularly from investment andunit trust managers. We intend to increase our presence in this market. Retail Clients We continue to sign-up retail clients at a very encouraging rate. Our clientnumbers have grown by around 35% between 2004 and 2005 compared to an averagerate amongst our peers of 18.9%. Efficiency We remain highly efficient with staff hours per trade of 0.51 against acompetitor average of 0.69 and revenue per £1,000 of staff costs of £4,331versus a £2,266 average. We are also in the top ten performers in our CRESTgroup despite the large amount of certificated trades that we still handle. Thisallows us to offer our services to both commercial and retail clients atcompetitive rates and we appreciate that maintaining and improving thisefficiency will be key to our future growth. Outlook There have been improvements in our trading volumes over recent weeks and withthe volumes of other firms now being cleared through us at a fee we are in agood position to take maximum advantage of any sustained upturn. We continue toseek out potential acquisitions where we can cut costs and use our efficiencyand higher margins to increase profitability. We also continue to activelymarket both retail and commercial clients and we hope to report more on thisover the course of the year. Andrew GrantChairman CONSOLIDATED PROFIT AND LOSS ACCOUNT (unaudited) For the six months ended 30 June 2005 --------- --------- Six months Six months 30 June 30 June 2005 2004 --------- --------- £ £ TURNOVER 1,275,270 1,258,758Administrative expenses 945,337 841,331Exceptional administrative expenses 46,929 - --------- --------- 992,266 841,331 OPERATING PROFIT 283,004 417,427 Tax on profit on Ordinary Activities 105,233 136,710 --------- --------- PROFIT FOR THE FINANCIAL PERIOD 177,771 280,717 Dividends 287,114 175,525 --------- ---------RETAINED (LOSS)/PROFIT FOR THE PERIOD (109,343) 105,192 ========= ========= GROUP BALANCE SHEET (unaudited) As at 30 June 2005 30/6/2005 30/6/2004 -------------------- ------------------- £ £ £ £ FIXED ASSETSIntangible assets 375,012 345,870Tangible assets 215,615 169,025Investments - - -------- -------- 590,627 514,895 CURRENT ASSETSInvestments 57,215 35,513Debtors 2,941,268 2,653,777Cash at bank and in hand 4,302,062 3,405,910 -------- -------- 7,300,545 6,095,200 CREDITORS:Amounts falling due within 6,632,526 6,074,671one year -------- -------- NET CURRENT ASSETS 668,019 20,529 -------- ---------TOTAL ASSETS LESS CURRENT LIABILITIES 1,258,646 535,424 PROVISIONS FOR LIABILITIES AND CHARGESDeferred taxation 5,492 - -------- ---------NET ASSETS 1,253,154 535,424 ======== ========= CAPITAL AND RESERVESCalled up share capital 114,845 100,300Share premium account 789,834 9,900Profit and loss account 348,475 425,224 -------- ---------SHAREHOLDERS' FUNDS 1,253,154 535,424 ======== ========= GROUP CASH FLOW STATEMENT (unaudited) For the six months ended 30 June 2005 30/6/2005 30/6/2004 --------- --------- £ £ Reconciliation of operating profit to net cash inflow from operating activities Operating profit 283,004 417,427Depreciation 38,164 28,187Amortisation 10,318 4,310(Increase)/decrease in currentasset investments (20,866) 10,969(Increase)/decrease in debtors 32,976 81,174Increase/(decrease) in creditors (654,873) (241,293) --------- ---------Net cash (outflow)/inflow fromoperating activities (311,277) 300,774 ========= ========= CASH FLOW STATEMENT Cash flow from operating activities (311,277) 300,774Capital expenditure and financial (126,906) (80,370)investmentEquity dividends paid (287,114) (175,525) --------- --------- (725,297) 44,879 Financing (10,183) - --------- ---------Increase in cash (735,480) 44,879 ========= ========= Reconciliation of net cash flow to movement in net funds 30/6/2005 30/6/2004 --------- --------- £ £ Movement in net funds in the year (735,480) 44,879 Net funds at 1 January 2005 1,231,041 107,392 --------- ---------Net funds at 30 June 2005 495,561 152,271 ========= ========= NOTES TO THE INTERIM ACCOUNTS 1. Basis of Accounts These unaudited interim accounts have been prepared on the basis of accountingpolicies set out in the Company's 2004 Annual Report and Accounts. 2. Earnings per Share Earnings per share is calculated as: Per Share Per Share Six months Six months Total 30 June 2005 Total 30 June 2004 ------- ---------- ------- ---------- £ p £ p Profit for the financial 177,771 1.5p 280,717 2.8pperiod The weighted average number of shares in issue during the period was calculatedas follows: Date Event No. of shares Days 2005 2004------- ----------------- ------------- ------ --------- ---------1/1/04 Opening balance 10,030,000 365 - 10,030,0001/1/05 Opening balance 11,484,545 365 11,484,545 - --------- --------- 11,484,545 10,030,000 --------- --------- 3. Dividends An ordinary dividend of 2.5p per ordinary share was proposed and paid during theperiod. Contact: Andrew Grant/Mathew EdmettJarvis Securities plc01892 700806/700815 INDEPENDENT REVIEW REPORT TO JARVIS SECURITIES PLC Introduction We have been instructed by the company to review the financial information setout in these interim financial statements and we have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. Directors' Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The continuingobligations of the AIM listing rules require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and based thereon, assessing whetherthe accounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with AuditingStandards and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2005. Horwath Clark Whitehill LLPChartered Accountants10 Palace AvenueMaidstoneKentME15 6NF This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Jarvis Securities