Jarvis Securities plc (LON:JIM) Financial Director Jolyon Head caught up with DirectorsTalk for an exclusive interview to discuss interim results, significant cash on the balance sheet, financial performance over the next six months and whether there are any significant changes going forward.
Q1: An excellent set of results for Jarvis Securities, what your thoughts?
A1: Well, obviously, delighted with the way that things are going at the moment. I think the most satisfying thing for us is that these results prove that the year end results for 2020 weren’t so much of a one-off due to the extraordinary market conditions but are actually a fair reflection of where the business is at the moment.
I think these half year results really back up the fact that we’ve grown and that these are the type of results we would be expecting to release under normal market conditions.
Q2: I see that you have a significant amount of cash on the balance sheet, is this all required for operational purposes?
A2: Some of it is. I think you’re correct in that observation, we do have more cash than normal in the business and there are two reasons for that.
One is we sold off the treasury shares that we held during the period using Primary Bid, one of our clients, and that raised £2.2 million. These were shares that we bought back previously at a much lower price than we were able to sell them for.
The other reason is that the cash balance has just benefited from the excellent operational performance of the business.
In terms of our requirements, they’re obviously driven by regulatory reasons and operational. The business historically has made an effort to return cash to shareholders in a timely fashion where it’s not required and that certainly remains the case.
So, if, after review, we feel that we have excess cash, over and above both our current needs and our anticipated needs, we would certainly look to pay that out as dividends.
Q3: So, how do you anticipate the financial performance over the next six months?
A3: Hopefully more of the same, I don’t see any reason why not.
I think in the very near term, and by that I would mean July and August, we do see those months being a little bit quieter, a lot of our clients are on holiday, a lot of the brokers who work from our Model B are also on holiday.
By September, and through to the end of the year, I would expect that we will be experiencing similar levels of market activity to those that we saw in the first half of the year.
Q4: Do you have any significant changes planned for the business in the near future?
A4: No, we don’t. I think one of the strengths of Jarvis Securities is we know what we are and we know what we do, and we know what we do well so unless there’s a compelling reason to deviate from that, we don’t plan to do so. At present, there doesn’t seem to be any reason to do so.
We’re continuing to see a lot of growth within our existing portfolio of Model B clients, we signed up two Model B clients during the period just gone, we’ve got more inquiries in the pipeline that we would hope to onboard in the next few months.
In our retail proposition, particularly our very low cost X-O platform, is still acquiring new clients so I think from our perspective, it’s very much a case of if it ain’t broke, don’t fix it.