Jarvis Securities Share Discussion Threads

[steelwatch] 24/4/2024 16:39

Jolyon Head's Linkedin page:

[steelwatch] 24/4/2024 16:19

I think ten got his information/misunderstanding from page 26 of the Annual Report. Of course, Head was a director during the reporting period and the accounts correctly report his emoluments for the 11 months or so up to his resignation.

[steelwatch] 24/4/2024 16:08

As Thrugelmir said above:

"The Board of Jarvis Securities plc is pleased to announce that Kieran Mark Price has been appointed as Finance Director of the Company with effect from 1st November 2023.

At the same time, the Company announces that Jolyon Head has confirmed that he will be resigning as Finance Director of the Company with immediate effect".

[cwa1] 24/4/2024 15:09

Solid volume and trades today

[melton john] 24/4/2024 14:58

Indeed just wondering what tenapen is on about.

[thrugelmir] 24/4/2024 14:25

" The finance director left the position but still kept his seat on the board "
Morning tenapen, can you explain what you mean here " kept his seat on the board" . Where does it say that?

He resigned from the board the day he left the job.

[qg holdings] 24/4/2024 12:47

Thanks for that info MJ.

In response to how will JIM make money from interest, the model is simple. Basically a certain percentage of cash is kept in an account for settling trades (think of this as a current account that doesn't pay interest), the remaining cash is kept in a different account(think of this as a savings account that does pay interest). Therefore with rates staying higher for longer returns on interest will stay higher for longer.

The FCA have been primarily concerned with looking for companies that are "double dipping", this happens when a brokerage collects income from interest AND either charges clients to have an account or charges interest on cash balances. JIM do not charge for cash balances or a monthly fee, therefore they are not "double dipping". Also it's hard to suggest they don't offer value to their customers when the price per trade is a little under half the charge from Hargreaves Lansdowne.

I have noticed various commentators/traders on Bloomberg and CNBC have recently been talking about the UK markets being good value and an opportunity for investment. This is in contrast to last year when very few expressed this opinion. The FTSE 100 breaking new highs suggests new money is entering the UK markets and animal spirits are returning. This can only be good for JIM as it will help increase trading activity by market participants.

We have seen a high ratio of buys to sells in the last few days which also suggests the market I waking up to both the dividend and value proposition JIM offers at these prices, which I believe to be materially too low. Hence the investment.

With regard to the share price coming down from it's all time high, I don't think it is fair to blame the UK coming out of lockdown and a subsequent drop off in trading activity across private investors on the Jarvis management. It is merely a consequence of people being allowed to go about their normal day to day business, and not being effectively under house arrest. I'm not suggesting this will rerate back to 350p,we are unlikely to see another COVID event in our lifetime. I do however see fair value at 150p-200p depending on how well the management navigate the next 2-3 years. I can collect and compound a very healthy dividend while I wait.

I understand some people will be upset at having bought in at a higher price. Trading can be tough, however it is always best to stay as emotion free as possible and to think logically about the current and future situation. None of us can change the past, by definition it has already happened. The future earnings and dividends suggest this stock is too cheap by most metrics and is therefore worth an investment.

I understand why some of you may want a lower price, I have been doing this for decades. The trouble is now the dividend has been reinstated sub 50p is an absurd target. For what it's worth I suspect there is a chance the dividend for this quarter may go up above the 1.75p, which I maintain as my base case scenario, I put the probability of another dividend skip at below 5%. The trading volumes and cash balance easily supports another quarterly dividend. Also worth bearing in mind JIM has a very good track record on paying regular quarterly dividends. One swallow doth not make a Spring...

I hope you all have a profitable day and may the FTSE 100 march higher still.

[melton john] 24/4/2024 11:35

Return on Capital 98.2%
Return on Equity 79.5%
Operating Margin 39.94%

Over £5M cash at the year end
P/E ratio 6.7
Enterprise value/EBITDA 4.04
Price to free cashflow ratio 5.1

Figures from Stocko.
Anybody need any more facts, tenapen?

[wasteof] 24/4/2024 10:54

8.4p - over 20% return at current price.

W

[melton john] 24/4/2024 09:34

I don't see why not. Business has picked up since the last one and according to Stockopedia the house broker is forecasting 11.4p eps and 8.4p dividend for the year.

[sbb1x] 24/4/2024 08:47

Do we expect a dividend to be announced in May ?

[melton john] 24/4/2024 08:24

" The finance director left the position but still kept his seat on the board "Morning tenapen, can you explain what you mean here " kept his seat on the board" . Where does it say that?

[thrugelmir] 23/4/2024 21:58

@Saucepan The FCA is targetting consumer activity not commercial. Likewise JIM will earn interest on pending settlement cash balances. Where the cash has been removed from the clients account.
With SIPPS it's been possible to hold cash on deposit with the SIPP provider. Rather than leave a balance idly doing nothing in the trading account. No benefit to JIM as a consequence.

[saucepan] 23/4/2024 21:42

"the interest rate is still favourable to the business model and will remain so for longer than most anticipated."

An interesting comment.

I thought one of the main points of the FCA investigation generally (i.e. not targeted only at JIM) was that it does not like the idea of companies in the sector creaming off interest on client cash. Surely, this key plank of the JIM business model is not going to be sustainable?

[ih_818120] 23/4/2024 21:21

Kinda hard to believe that you lot think it's scare mongering to call out bad management when the share price went from c£3 to 60p . The finance director left the position but still kept his seat on the board and the CEO is stepping away from the job. Facts is facts.

Stiff upper lip guys

[thrugelmir] 23/4/2024 16:30

Thanks QG. Extremely informative. A positive use of this media channel for once.

[melton john] 23/4/2024 10:07

Thanks a lot QG.

That supports my perception of where we are and helps to balance the unfounded scaremongering by some other posters.

I live much too far away to attend myself unfortunately.

[steelwatch] 23/4/2024 08:48

Thank you QG.

[qg holdings] 23/4/2024 08:35

Good morning steelwatch, sorry for the delayed response. I wanted to add to my position before letting people know how the AGM went, and had a few trading partners to inform first. The curious movement down in the share price the last few days allowed me to add to my position.

The mood of the room was relaxed and reasonably positive considering the general sentiments surrounding JIM this past year. It sounds like we are through the worst of the current FCA situation. Luckily not many members were in attendance so we were able to ask quite a few questions each and gained some interesting information.

I will keep it brief as I have a tendencies to digress. Trade volumes are materially up on last year (circa +20%). The FCA investigation is going well and should draw to a conclusion before the second half of this year, JIM has not been specifically picked out for investigation, the FCA have been reviewing the sector as a whole. We discussed perhaps using some of future dividend hikes to repurchase shares while the MCAP is disconnected from the true value of the business. We discussed the future cost savings from streamlining the business. We discussed potential ways to increase clients and market share. All resolutions were passed easily. Mr Grant seemed calm and philosophical, he answered all questions comfortably and seemed upbeat regarding the future of the company. There are potential new model B clients and private investor balances and numbers are slightly up on last year, there has been no flight by the client base. Model B clients have remained stable since the clear out.

In summary there has been a lot of unfounded scare mongering on this company, while it has benefitted me allowing me to massively reduce my average price paid and increase the percentage of the company I own, I feel those wishing to enter at a lower price/close short positions only have a couple of weeks timeframe before the stock price goes significantly higher when the next dividend is announced on the 9th May.

I am bullish, I see an excellent dividend, significant upside, a potential takeover by a larger rival (Mr Grant says he is openminded on this matter), and earnings growth as 1)the sunk cost of the skilled person review will no longer hamper the bottom line, 2)trade volumes are up 3) the interest rate is still favourable to the business model and will remain so for longer than most anticipated.

I hope this information is useful to you.

[steelwatch] 19/4/2024 17:00

Did anyone actually make it to the AGM? If so, what was your take from formal/informal Q&As?

[tenapen] 19/4/2024 16:54

.......cos that's all we have..... hope

[thrugelmir] 19/4/2024 16:50

Many of us are also living in hope..........

[tenapen] 19/4/2024 16:01

He was hopeless.

Going back to his rant in the chairman's statement about the MiFID rules and the added costs, leading to a crash in the share price at the time.

Then we had the IMHO the pointless four to one share ...... Why ? Because the nodding head board didn't think people would buy JIM shares at a higher price. They got that bit right. The added expenses of the changes for no reason.

Shames they didn't keep their eyes on the regulations rather than the share price, we wouldn't be in this mess.

No lose to see him go.

[melton john] 19/4/2024 09:16

I agree, when I said I retired, I stopped working for someone else. Still investing at 78. Just good business practice to have a succession plan for the future.