Jarvis Securities Share Discussion Threads

[tenapen] 15/3/2021 18:20

Trade Volumes are still good !.



With the JIM share price going higher ! its moments like this that make me thankfull i have been taking the DRIP for all of these years. If i'd taken the cash i would have lost it on one of my Jam tomorrow shares. Loving the DRIP :-)

Regards.

[shanklin] 15/3/2021 12:36

crazycoops, Saucepan

Thank you

I don't understand "Forecast eps growth = 52.99%"

[saucepan] 15/3/2021 11:36

Shanklin

ShareScope has:

2021 Forecast
Turnover: £13.8m
Profit: £7.4m
eps: 13.7p

2022 Forecast
Turnover: £14.3m
Profit: £7.8m
eps: 14.5p

Forecast eps growth = 52.99%

[crazycoops] 15/3/2021 11:36

They remain conservative. EPS forecasts are 13.7p for 2021 and 14.5p for 2022. From my perspective, interest income might be down/flat this year but JIM also offers an excellent hedge if/when interest rates rise.

[shanklin] 15/3/2021 08:12

Has anybody seen the 2021 EPS forecast please?

Presumably both fees and commissions are expected to be significantly up, based on the positive comments in the FY20 results. However interest income may well be down even if its based on significantly higher average balances.

[evaluate] 13/3/2021 05:30

He hasn't made the key point (made by Shanklin on here) that commissions are up 59% & now make up the majority of revenues.

Low interest rates (which they don't control) have worked against them & they still turned in these exceptional figures.

If they can keep commissions growing at 59% per year (or anything close), this has a long way to go.

[fokker45] 12/3/2021 21:40

I think this article from S Thompson @ IC went live after close today, but I saw a significant rise from 1400 on Friday, exactly the same time as I cleared off for a walk. If anybody does know what time went live would appreciate it. I know IC moves JIM price, want to know if that was due move today or if Monday will likely open higher.



Jarvis’s profit surge highlights re-rating potential

2020 pre-tax profits ahead of upgraded forecasts.
No sign of organic growth slowing.
Full-year results from Jarvis Securities (JIM:260p), a financial services outsourcer and retail client stockbroker, highlight why I suggested buying the shares at 115p (‘Jarvis offers medium-term value’, 15 August 2018).

Annual pre-tax profit and EPS surged 43 per cent to £6.9m and 12.7p, respectively, on 27 per cent higher revenue of £13.3m, the key drivers being: higher trading volumes from 100,000-plus retail clients who use Jarvis’s ShareDeal-Active and X-O low-cost online share trading services; and ongoing demand from pension funds and wealth managers looking to make cost savings by outsourcing their financial administration services to the company’s corporate division. The result was slightly ahead of WH Ireland’s forecasts, and that’s after the house broker pushed through multiple upgrades in the past 12 months.

Jarvis asset-light business model generated an eye-watering post-tax return on equity of 128 per cent and is hugely cash generative, so a high percentage of net profits are paid out as dividends. Adjusting for the 3.75p a share special dividend in 2019, the ordinary dividend per share increased 69 per cent to 11.1p in 2020 to take the total to 27.75p since I initiated coverage in 2018.

Even after upgrading 2021 profit estimates by 8 per cent ahead of the results, WH Ireland views its revenue, pre-tax profit and EPS forecasts of £13.8m, £7.4m and 13.7p as conservative. I concur. Trading volumes started 2021 from a higher run rate than a year ago, and Jarvis has a “healthy pipeline” of new opportunities on the corporate side. A 50 per cent operating margin looks sustainable with both revenue and profits skewed to the upside.

The shares are up 30 per cent since my last update (‘Six small-cap value picks’, 16 November 2020), and trade on a forward price/earnings (PE) ratio of 19 and offer 4.6 per cent prospective dividend yield. I am raising my fair value to 300p. Buy.

[shanklin] 12/3/2021 16:07

Yep, I am sure nobody buying GAW said blimey its £50.00, I'm not paying that.

At least the spread has come down to a level consistent with the pre-split situation.

[squeamish1] 12/3/2021 15:59

I didn't want them split into 4 because I didn't and still don't see the point. A split by itself adds nothing to equity, no % increase in EPS, ROE, cash flow or any other measure you might use to value a company, but it does create a nice fee for the lawyers. No-one baulks at ULVR at £40 after all.

Great to see this at £10 in old money, I had wondered if this was a dinosaur doomed to extinction but they have found new revenue sources. Well done, but we are still at the whim of Andrew Grant and whatever his future retirement means for us long termers.

[tenapen] 12/3/2021 15:26

Split or no split, after such a positive results the share price would have gone higher - IMHO

I didn't and still don't see people being put off buying JIM at £10 old money !.

Anyways, a very long tern hold for me, happy days.

[cwa1] 12/3/2021 15:26

If this keeps up there may have to be a nice bottle opened this evening!

Actually, sod it, I'm opening one anyway ;-)

[poacher45] 12/3/2021 14:48

Looking at the share price how many posters now regret saying they did not want the shares splitting into four. As I said at the time this would only increase the value. The good results have helped even more. Perhaps next year they will split them again.

[flowc] 12/3/2021 13:06

Yes correct, Jim is exempt from IHTI stated "I believe" as we never know what Richie Sunnak may do in the future with IHT

[energeticbacker] 12/3/2021 11:19

Many investors are attracted to AIM companies for the generous inheritance tax relief on offer for stocks that have been held for at least two years at the time of death.

But not all AIM companies qualify and there are plenty of ambiguities.

Investor's Champion's AIMsearch lists every company on AIM for their Inheritance Tax qualifying status.

[evaluate] 11/3/2021 15:00

I've got mine in my SIPP.

:)

[flowc] 11/3/2021 13:57

If your old like me and don't need the money, it being a Aim share it avoids death duties if held more than 2 yrs I believe

[tenapen] 11/3/2021 13:20

"A great little company".

:-)

[evaluate] 11/3/2021 12:04

I don't think interest rates can go any lower than they are - can they?

[shanklin] 11/3/2021 11:53

The only potential downside is interest income (also see Note 3), but that's a risk I am prepared to live with. With inflation coming through I see more upside than downside risk to interest rates, which would help JIM.

The RNS is very positive about "Commission" and "Fees".

[cfro] 11/3/2021 11:04

PrimaryBid is only going to grow in the years ahead and hence JIM's relationship will likely become ever more valuable as their business lines increase.
Hard to properly value this relationship especially given the likely-hood of future cashflows but i suspect it isnt anywhere near in the current share price today.

[evaluate] 11/3/2021 10:59

Well spotted Shanklin.

This is extremely positive.

[cwa1] 11/3/2021 10:58

Cheers Shanklin, thanks for that. Worth of note. Clearly I'd like more information but it's a start...

[shanklin] 11/3/2021 10:33

Worth reading note 3, which shows a revenue breakdown.

Commisions, a term defined in the RNS, are up 59% from 2019 to 2020, and now form the largest revenue stream. AIUI this includes the PrimaryBid revenue.

[cwa1] 11/3/2021 09:30

Happy with these results. I'm fairly sure that that is a broad hint in the text that we can expect either special dividends, or perhaps increased normal ones IF things continue as they are.

Would have liked to see more on PrimaryBid-but you can't have everything and very happy with where we are at now :-)