# Jarvis Securities achieves a record breaking set of results (LON:JIM)

- Link: https://www.directorstalkinterviews.com/jarvis-securities-achieves-a-record-breaking-set-of-results-lonjim/4121058062
- Published: 2022-03-23T09:56:53+00:00
- Author: Amilia Stone

**Jarvis Securities plc ([LON:JIM](https://www.directorstalkinterviews.com/company/jarvis-securities-plc/jim.l))**
Finance Director Jolyon Christopher Head caught up with DirectorsTalk for an exclusive
interview to discuss full year results, how recent uncertainty is affecting the 
business, the impact of interest rates and what investors can expect from the company
in the coming months.

**Q1: Jarvis Securities has ****recently announced full year results for 2021. Jolyon,
how did the year unfold in your opinion?**

**A1**: I think overall, it’s been an excellent year for us. We’ve released a record
breaking set of results which shows that the company is moving in the right direction.

I think broken down between the two halves of the year, what we saw in the first
half was incredibly high volumes, which had continued through from the back end 
of 2020. We saw that across the retail space and the model B space, which is our
institutional business, that carried on to about the end of May. What we saw in 
the second half was slightly quieter volumes, the retail side of the business continued
from strength to strength, but the model B side of the business was a bit quieter.

I think in hindsight, the reason for that was there was a lot of pent up demand 
from COVID for corporate services in terms of IPOs and placings and that came through
in the first half of the year whereas now we’ve reverted to slightly more normal
levels.

**Q2: Now, there seems to be a lot of uncertainty around at the moment, how is it
impacting the company?**

**A2**: At the moment, we’re in a very interesting market and I think uncertainty
is the buzzword for most people.

At the beginning of the year, we obviously had the spectrum of inflation coming 
through and how the central banks across the world would deal with that, and that
weighed a little bit on equity prices. Then that’s obviously been followed up by
Russia’s invasion of Ukraine, which is ongoing.

Now, that in itself, those two things have caused quite a lot of volatility in the
equity markets and normally, for us, volatility is a good thing in that it increases
volumes. What we are currently seeing is not what we would usually see in that whilst
volumes are good, they are not where we would expect with this level of volatility.
We are in a very uncertain time, we do hope for many reasons that the Ukrainian 
situation resolves itself as soon as possible.

Just looking at this purely from a commercial perspective, it does for feel quite
a lot like when we were in the Brexit situation when there was a lot of uncertainty
then, where I think a lot of investors were sitting on their hands. As soon as the
situation was resolved, we saw a huge spike in volumes coming back into the market
and that’s really where it feels like we’re at the moment.

**Q3: Your business is impacted by interest rates, will the increases be positive
for the business and will there be an immediate impact, do you think?**

**A3**: I think this is an area where we have a little bit more certainty.

So, we have three main revenue streams. We have commission from trading volumes,
we have interest income that we earn on client cash that we place on deposit and
then we have various fixed fees that we levy on our institutional clients for compliance-
type services.

In terms of the interest rate revenue stream, what we’ve seen over the last five
years is a continuous decrease in the rates that we were able to obtain. So, we 
have a large treasury book where we effectively manage a considerable amount of 
money and it’s broken down into smaller amounts of £5-£10 million which is placed
on deposit and comes off periodically. We probably have deposits maturing every 
couple of weeks, sometimes more regularly than that.

What we have definitely seen since the turn of the year is an increase and this 
is the first time we’ve seen this for several years, where funds that are maturing
are being replaced at a higher rate than the rate that we were getting previously.
So, that, for us, is a huge positive step. How much those increases will continue
is an uncertain area because obviously it’s for the central banks to decide and 
it’s quite difficult to second guess exactly where their priorities will lie in 
terms of inflation, keeping the economy going, etc.

The other thing that we do know for certain is that what we saw in 2021 was a complete
flattening of the rates that were available to us. So, a lot of the deposit were
put out very short term, there was no benefit to putting money out for two years
when the rate at three months was identical.

So, what we do have is a lot of the deposits that were placed in ‘21 will be maturing
this year so, everything else being equal as it is at the moment, we will see a 
fairly immediate benefit to that revenue stream.

**Q4: Just looking forward in terms of news flow, what can we expect from Jarvis
Securities over the next few months?**

**A4**: Well, hopefully, just the regular stuff that we would normally announce.

So, in terms of the way the business is managed, it’s still highly cash generative,
nothing has changed in terms of management philosophy, we are still focusing on 
returning cash to shareholders as soon as possible.

So, we will have our dividend announcement on the 12th of May or shortly before,
for the Q2 dividend, our interim accounts are published on the 14th of July this
year and for anyone who is interested, all our information is available on our corporate
website which is javissecurities.co.uk

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