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Jarvis Securities (JIM)

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Thursday 25 January, 2007

Jarvis Securities

Final Results

Jarvis Securities plc
25 January 2007


                         JARVIS SECURITIES PLC
                       ('Jarvis' or 'the Company')


              STATEMENT OF AUDITED RESULTS FOR THE YEAR
                         ENDED 31 DECEMBER 2006


                         CHAIRMAN'S STATEMENT


Financial Highlights
 •  Turnover up 29% to £3.42M (December 2005: £2.65M)
 •  Operating profit up 93% to £1.14M (December 2005: £592k)
 •  EPS up 158% to 6.79p (December 2005: 2.63p)
 •  Net assets of the group up 11% to £1.52M (December 2005: £1.37M)
 •  Final dividend proposed of 2.5p (2005: nil final dividend)


Commentary

In our last interim statement I reported that our strategy to focus on service
and profits was beginning to deliver considerable financial benefits to the
group. The results for 2006 show the success that we have enjoyed with turnover,
profits, earnings and assets all up significantly.


The business continues to expand in all areas and we look forward to 2007 with
great confidence. Retail client numbers are still increasing at an impressive
rate and we have a number of potential commercial contracts awaiting agreement.
Whilst general trading volumes are beyond our control we have been growing our
fee income base and the interest rate environment is also moving in our favour.


We have put a lot of effort into the new business review requirements an extract
of which is set out at the end of this announcement. This is an idea that we
support as it gives our stakeholders a real insight into how the Board monitor
the progress of the group and whether we are achieving or not. I would urge
shareholders in particular to take a little time to consider these measures so
as to fully appreciate the true depth of achievement and strength of the
company. A quick glance at the highlights above and in the business review
section of the fast growth of turnover, profits and funds under administration
give a good overview of our financial performance. However, it is also important
to consider what underpins that performance and I am pleased to say that you
will see a firm that takes its environmental and social responsibilities
seriously, that is improving productivity from its staff, that has rapidly
growing client numbers, that takes quality of service seriously and that has the
lowest complaints' ratio in our sector. As a Board we perceive a positive
outlook for Jarvis over the coming year and I anticipate announcing an improved
financial position at the interim stage.


I also commented in July 2006 on the disappointing performance of our share
price. Whilst this has improved over recent months, I still do not believe that
this sufficiently values the current and future prospects of the business. Since
we joined AIM in 2004, operating profits are up by more than 67% but at the 31
December the share price had only risen 15% to 95p from the introduction price
of 82.5p. This has not gone unnoticed by other firms in our sector and we have
received a number of informal approaches during 2006. These informal discussions
were not at an attractive level but they support our view on the current low
valuation of Jarvis. It is also worth noting that our price earnings ratio at
the end of 2006 was 9.5 compared to a selection of other publicly traded brokers
at 18.3 for Charles Stanley Group plc*, 19.8 for Fiske plc* and 20.4 for Walker,
Cripps, Weddle, Beck plc*. Jarvis Securities plc is fast growing, with an
arguably better business model in my view, and this disparity is unsatisfactory.
Given these circumstances we shall continue to commit some spare cash to
buying-back further shares for cancellation whilst the Board believe the stock
to be undervalued. As I have previously mentioned, this cannot be a long-term
answer for our frustrations and so we shall continue to try and improve
awareness of our group with investors.


I am delighted that our efforts to strengthen the foundations of the business
have been successful and that we are now seeing a significant financial benefit.
I would like to thank Lionel Grant, who retired this year, for his tireless
service for more than 20 years in building the business that he helped to found.
I would also like to extend my thanks to my colleagues on the Board and to the
rest of our dedicated team in delivering such an improved performance.


Andrew J. Grant
Chairman

                                               *Source RoyalBlue Fidessa 11/1/07


                         GROUP PROFIT AND LOSS ACCOUNT
                     For the year ended 31 December 2006


                                                  --------         --------
                                                      2006             2005
                                                                as restated
                                                  --------         --------
                                                         £                £

TURNOVER                                         3,419,658        2,651,665

Administrative expenses                          2,275,800        2,009,766
Exceptional administrative expenses                      -           50,222
                                                  --------         --------
                                                 2,275,800        2,059,988

OPERATING PROFIT                                 1,143,858          591,677

Interest payable                                     2,605            8,288
                                                  --------         --------

PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION                                         1,141,253          583,389

Tax on profit on ordinary activities               364,322          281,678
                                                  --------         --------

PROFIT FOR THE FINANCIAL YEAR                      776,931          301,711
                                                  ========         ========

EARNINGS PER SHARE
Basic earnings per share                              6.79p            2.63p
Diluted earnings per share                            6.43p            2.49p

CONTINUING OPERATIONS
None of the group's activities were acquired or discontinued in the current
year.

            STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                    For the year ended 31 December 2006

                                                      2006             2005
                                                                as restated
                                                  --------         --------

                                                         £                £

PROFIT FOR THE FINANCIAL YEAR                      776,931          301,711
                                                  --------         --------

TOTAL RECOGNISED GAINS AND LOSSES RELATING
TO THE YEAR                                        776,931          301,711
                                                                   ========
Prior year adjustment                               (8,848)
                                                  --------

TOTAL GAINS AND LOSSES RECOGNISED SINCE
LAST FINANCIAL STATEMENTS                          768,083
                                                  ========
                                                    





                         GROUP BALANCE SHEET
                       As at 31 December 2006

                                  --------------              ---------------
                                           2006                    2005
                                                              as restated
                                 --------------              ---------------
                                 £            £               £            £

FIXED ASSETS
Intangible assets          344,060                      364,695
Tangible assets            144,145                      176,597
                         ---------                     --------
                                        488,205                      541,292

CURRENT ASSETS
Investments                 34,186                       33,177
Debtors                  5,710,459                    3,693,549
Cash at bank and         6,561,264                    5,130,205
in hand                  ---------                     --------
                        12,305,909                    8,856,931

CREDITORS:
Amounts falling         11,273,281                    8,031,163
due within one           ---------                     --------
year

NET CURRENT ASSETS                    1,032,628                      825,768
                                       --------                     --------
                                         
TOTAL ASSETS LESS CURRENT LIABILITES  1,520,833                    1,367,060
                                       ========                     ========

CAPITAL AND RESERVES
Called up share                         113,500                      114,845
capital
Share premium                           789,834                      789,834
account
Profit and loss                         668,251                      472,412
account
Capital redemption                        1,345                            -
reserve
Other reserves                           17,696                        8,848
                                       --------                     --------
                                      1,590,626                    1,385,939
Own shares held                         (69,793)                     (18,879)
for cancellation
                                       --------                     --------
                                         
SHAREHOLDERS' FUNDS -                 1,520,833                    1,367,060
ALL EQUITY                             ========                     ========







             GROUP CASH FLOW STATEMENT
       For the year ended 31 December 2006


                                                   ---------       ---------
                                                        2006            2005
                                                                 as restated
                                                   ---------       ---------

                                                           £               £

Reconciliation of operating profit to net cash inflow from operating
activities

Operating profit                                   1,143,858         591,677
Depreciation                                          80,385          77,822
Amortisation                                          20,635          20,635
Loss on disposal of fixed assets                         749          13,501
(Increase) in debtors                               (581,828)       (319,021)
Increase/(decrease) in creditors                      50,359        (282,020)
Cost of share options                                  8,848           8,848
Interest payable                                      (2,605)         (8,288)
                                                   ---------       ---------
Net cash inflow from operating                       720,401         103,154
activities                                         =========       =========


CASH FLOW STATEMENT

Cash flow from operating                             720,401         103,154
activities
Taxation                                            (201,933)       (245,412)
Capital expenditure and financial                    (49,691)       (137,874)
investment
Equity dividends paid                               (458,768)       (287,114)
                                                   ---------       ---------
                                                      10,009        (567,246)

Financing                                           (173,240)        (29,065)
                                                   ---------       ---------
(Decrease) in cash                                  (163,231)       (596,311)
                                                   =========       =========


Reconciliation of net cash flow to movement in net funds

                                                        2006                       2005
                                              --------------             --------------

                                               £           £             £            £

(Decrease) in cash in the year          (163,231)                 (596,311)
                                        --------                  --------
Movement in net funds in the year                   (163,231)                  (596,311)

Net funds at 1 January 2006                          634,730                  1,231,041
                                                    --------                   --------
Net funds at 31 December 2006                        471,499                    634,730
                                                    ========                   ========








              NOTES FORMING PART OF THE FINANCIAL STATEMENTS
                    For the year ended 31 December 2006


1. ACCOUNTING POLICIES

The financial statements have been prepared in accordance with applicable
accounting standards. The following accounting policies have been used
consistently in dealing with items which are considered material in relation to
the financial statements.

(a) Accounting convention

The financial statements have been prepared under the historical cost convention
as modified by the revaluation of certain assets.

(b) Revenue

Revenue represents net sales of services, commissions and interest excluding
value added tax. Management fees charged in arrears are accrued pro-rata for the
expired period of each charging interval. Interest is accrued on cash deposits
pro-rata for the expired period of the deposit. Commission income is recognised
on receipt.

(c) Basis of consolidation

The group financial statements consolidate the financial statements of Jarvis
Securities plc, Jarvis Investment Management plc, Sharegain Limited, JIM
Nominees Limited, Galleon Nominees Limited and Dudley Road Nominees Limited made
up to 31 December 2006. Intra-group sales and profits are eliminated on
consolidation and all sales and profit figures relate to external transactions
only. No profit and loss account is presented for Jarvis Securities plc as
provided by S230(3) of the Companies Act 1985.

(d) Tangible fixed assets

Depreciation is provided on cost in equal annual instalments over the lives of
the assets at the following rates:

Website                   - 33% on cost
Leasehold improvements    - 33% on cost
Motor vehicles            - 15% on cost
Office equipment          - 20% on cost
Software developments     - 33% on cost

(e) Intangible fixed assets

Goodwill represents the excess of the fair value of the consideration given over
the aggregate fair values of the separable net assets. Goodwill is amortised
over 20 years on a straight line basis, being the directors' best estimate of
the useful economic life, subject to annual impairment reviews. Other intangible
assets are capitalised at their market value on acquisition and are amortised on
the same basis.

(f) Deferred taxation

Provision is made in full for all taxation deferred in respect of timing
differences that have originated but not reversed by the balance sheet date,
except for gains on disposal of fixed assets which will be rolled over into
replacement assets. No provision is made for taxation on permanent differences.
Deferred tax assets are recognised to the extent that it is more likely than not
that they will be recovered.

(g) Segmental reporting

No significant segments for reporting purposes exist as required by Statement of
Standard Accounting Practice 25.

(h) Pensions

The group operates a defined contribution pension scheme. Contributions payable
for the year are charged to the profit and loss account.

(i) Stockbroking balances

The gross assets and liabilities of the group relating to stockbroking
transactions on behalf of clients are included in debtors, creditors and cash at
bank.

(j) Operating leases and finance leases

Costs in respect of operating leases are charged on a straight line basis over
the lease term in arriving at the operating profit. Where the company has
entered into finance leases, the obligations to the lessor are shown as part of
borrowings and the rights in the corresponding assets are treated in the same
way as owned fixed assets. Leases are regarded as finance leases where their
terms transfer to the lessee substantially all the benefits and burdens of
ownership other than right to legal title.

(k) Investments

Fixed asset investments are stated at cost and current asset investments are
stated at current market valuations.

(l) Cashflow statement

Cash movements relating to stockbroking balances derived from client trading are
excluded from the cashflow statement on the basis that these amounts do not form
part of the cashflow position of the group.

(m) Foreign Exchange

The company offers settlement of trades in sterling, US dollars, euros, Canadian
dollars and Swiss francs. The company does not hold any assets or liabilities
other than in sterling and converts client currency on matching terms to
settlement of trades realising any currency gain or loss immediately.
Consequently the company has no foreign exchange risk.

(n) Options

Employee options are expensed equally in each year from issue to the date of
first exercise. The total cost is calculated on issue based on the Black Scholes
method with a volatility rate of 30% and a risk free interest rate of 3.75%. It
is assumed that all current employees with options will still qualify for the
options at the exercise date.


2. GROUP INCOME

The income of the group during the year was made in the United Kingdom and the
income of the group for the year derives from the same class of business as
noted in the Directors' Report.
                                                           2006          2005
                                                       --------      --------
                                                              £             £
Interest received                                     1,508,974     1,280,405
Fees, commissions, foreign exchange gains and other
revenue                                               1,910,684     1,371,260
                                                       --------      --------
                                                      3,419,658     2,651,665
                                                       ========      ========


NOTES FORMING PART OF THE FINANCIAL STATEMENTS

For the year ended 31 December 2006 (continued)

3. OPERATING PROFIT                                          2006           2005
                                                        ---------       --------
Operating profit is stated after charging:                      £              £
Directors' emoluments                                     378,330        247,595
Depreciation - owned assets                                80,385         77,820
Amortisation                                               20,635         20,635
Operating lease rentals - hire of machinery                 5,766            786
Operating lease rentals - land and buildings               26,371         19,750
Auditor's remuneration - audit - parent company            18,525         27,000
Auditor's remuneration - interim accounts review -
parent company                                              3,000          3,750
Auditor's remuneration - other services - parent
company                                                    10,150         24,500
Auditor's remuneration - other services - subsidiaries          -          2,200
Loss on disposal of fixed assets                              749         13,501
Interest payable and similar charges                      163,566        213,343
Directors' emoluments include a non-recurring retirement payment to Mr L G Grant
of £70,000.
Benefits are accruing for one director (2005 one director) under a money purchase
pension scheme.

Staff Costs
The average number of persons employed by the group, including directors, during
the year was as follows:
                                                           Number         Number
Management and administration                                  22             23
                                                         ========       ========

The aggregate payroll costs of these persons were as            £              £
follows:
Wages and salaries                                        766,071        626,883
Pension contributions                                      10,764          9,964
Social security                                            86,787         66,094
                                                         --------       --------
                                                          863,622        702,941
                                                         ========       ========

4. EXCEPTIONAL ITEMS

Exceptional items derive from the costs relating to the following events:
During the previous year a potential acquisition was aborted following due
diligence.

5. INTEREST PAYABLE AND SIMILAR CHARGES                      2006           2005
                                                         --------       --------
                                                                £              £
Bank loans and overdrafts                                   2,605          8,288
Interest paid to clients                                  160,961        205,055
                                                         --------       --------
                                                          163,566        213,343
                                                         ========       ========


Interest paid on client deposits is included within administrative expenses as
the holding of client monies and the earning and paying of interest upon these
is a core part of the business activities of Jarvis Investment Management plc.

6. DIVIDENDS                                                 2006         2005
                                                         --------     --------
                                                                £            £

Interim dividends paid on Ordinary 1p shares              458,768      287,114
                                                         ========     ========

Dividend per Ordinary 1p share                                4.0p         2.5p
                                                         ========     ========



               NOTES FORMING PART OF THE FINANCIAL STATEMENTS
               For the year ended 31 December 2006 (continued)

7. CASH AT BANK & IN HAND

                                        Group                     Company
                                 2006           2005         2006         2005
                             --------       --------     --------     --------
                                    £              £            £            £
Balance at bank and in hand 6,561,264      5,130,205        2,905        4,080
                             ========       ========     ========     ========

Cash at bank includes £6,089,765 (2005 £4,495,475) received in the course of
settlement of bargains. This amount is held by the company in trust on behalf of
clients and is only available to complete the settlement of outstanding
bargains.


8. RELATED PARTY TRANSACTIONS


At the year end Sion Holdings Limited had an outstanding balance due to Jarvis
Securities plc of £254,496 (2005 £149,479). The loan is secured and carries an
interest rate of 6.45% p.a. The highest outstanding balance during the year was
£576,023 and the loan is due to be repaid in full on conclusion of several
property sales made by Sion Holdings Limited that have exchanged and are
awaiting legal completion. A further partial repayment of £54,496 was made on 17
January 2007.


During the year the company made a management charge of £10,000 to Sion Holdings
Ltd for office and administrative services and paid rent of £26,371 to Sion
Holdings Limited. In addition, Jarvis Securities plc charged Sion Holdings
Limited £74,125 for the costs and project management of building an extension to
its office premises of which Sion Holdings Limited is the freeholder.


9. EARNINGS PER SHARE


The weighted average number of shares in issue during the year for the Earnings
per Share calculations are as follows:

Date   Event                   No. of shares Days           2006          2005
------ ----------------           -------- ------      ---------     ---------
01/01/ Opening balance 2005     11,484,545     365             -    11,484,545
05

01/01/ Opening balance 2006     11,484,545       8       251,716             -
06

09/01/ Cancellation of          11,460,000     252     7,912,109             -
06     treasury shares

18/09/ Cancellation of          11,400,000      81     2,529,860             -
06     treasury shares

07/12/ Cancellation of          11,350,000      24       746,301             -
06     treasury shares                                 ---------     ---------
                                                      11,439,986    11,484,545

The Diluted Earnings per Share calculation is as follows:

Date  Event                  No. of shares Days          2006             2005
                                                                     ---------
01/01 Opening balance 2005    12,134,545    365             -       12,134,545
/05

01/01 Opening balance 2006    12,134,545      8       265,962                -
/06

09/01 Cancellation of         12,110,000    252     8,360,876                -
/06   treasury shares

18/09 Cancellation of         12,050,000     81     2,674,109                -
/06   treasury shares

07/12 Cancellation of         12,000,000     24       789,041                -
/06   treasury shares                               ---------        ---------
                                                   12,089,988       12,134,545
Earnings per
share before
exceptional
expenses                                                 6.79p            3.06p



              NOTES FORMING PART OF THE FINANCIAL STATEMENTS
              For the year ended 31 December 2006 (continued)


10. NOTES TO THE CASH FLOW STATEMENT

                                     ---------      ---------
NOTE A - GROSS CASH  FLOWS                2006           2005
                                                  as restated
                                     ---------      ---------
                                            £               £
Capital expenditure and
financial investment
Payments to acquire
tangible fixed assets                 (64,659)       (183,045)
Receipts from disposal
of fixed assets                        15,977          41,999
Receipts from disposal
of current asset
investments                                 -           3,172
Purchase of current
asset investments                      (1,009)              -
                                     ---------       ---------
                                      (49,691)       (137,874)
                                     =========       =========
Financing
Expenses paid on
issue                                       -         (10,186)
of shares
Repurchase of own                    (173,240)        (18,879)
shares                               ---------       ---------
                                     (173,240)        (29,065)
                                     =========       =========
NOTE B - ANALYSIS
OF NET FUNDS
                   At 1.1.06       Cash Flow      At 31.12.06
                   ---------       ---------        ---------
                            £               £               £
Cash in             5,130,205       1,431,059       6,561,264
hand, at
bank
Less DVP           (4,495,475)     (1,594,290)     (6,089,765)
cash                ---------      ---------       ---------
NET FUNDS             634,730        (163,231)        471,499
                    ---------      ---------       ---------

DVP cash is client funds held in trust for delivery versus payment
transactions in order to pay market counterparties for the purchase of
equities and other instruments settled via CREST, the electronic mechanism for
the simultaneous and irrevocable transfer of cash and securities operated by
CRESTCo Limited.

11. EVENT AFTER THE BALANCE SHEET DATE


The Board proposes the payment of a final dividend of 2.5p per Ordinary 1p share
to holders on the register on 2 February 2007 for payment on the 1 March 2007
subject to approval at the annual general meeting of the company.


BUSINESS & OPERATING REVIEW


Business review

Strong growth has resulted in the group's turnover rising by 29.0% to
£3,419,658. Profit before tax has also grown to 195.6% of the 31 December 2005
level, with basic earnings per share up by 158.2%. Group net assets are at
£1,520,833 from £1,367,060 a year earlier, a rise of 11.2%.


The Group


The principal trading subsidiary of the Group is Jarvis Investment Management
plc. For regulatory reasons relating to administration and cost, Jarvis
Securities plc is the AIM traded parent, holds the assets of the Group and is
responsible for activities that fall outside the scope of regulated investment
business. Jarvis Investment Management plc is a Member of The London Stock
Exchange (LSE) and is authorised and regulated by the Financial Services
Authority (FSA). This status is essential for the trading activities of the
Group and therefore compliance with the Rules of both the LSE and FSA is of
paramount importance. The Group provides retail execution-only stockbroking;
PEP, ISA and SIPP investment wrappers; savings schemes and financial
administration and settlement services in all these areas to other stockbrokers
and investment firms as well as individuals.


The market


There are many stockbroking firms within the UK and a number of outsourced
financial administration service providers. Jarvis Investment Management is in a
highly competitive and price-sensitive market for retail execution-only clients.
The market for third party administration services is also competitive but with
a greater bias towards service than cost. Jarvis has expanded significantly in
both these areas during the year under review and expects to continue doing so
in 2007. Trade volumes clearly have a significant impact on the fortunes of
stockbroking businesses but with a wider spread of activities and a different
charging model to our competitors we believe that our income is less volatile
and of a higher quality that other pure execution-only brokers.



Capitalisation and financing


Jarvis Securities plc has 11,280,000 Ordinary 1p shares in issue, following the
cancellation of 70,000 Ordinary 1p shares on 8 January 2007. These shares are
admitted to trading on AIM. The Company has been buying back its shares for
cancellation during the year when the Board believed that the share price did
not reflect the value of the business. The Company will continue to repurchase
shares when its cash position allows. Whilst the business is highly cash
generative, and therefore requires no further debt or other external financing,
the Board wish to balance the use of cash between the stated dividend policy and
any buy-back of shares. Approximately two-thirds of profit after tax is paid out
as a dividend, with the other third being reinvested in the business or used for
purchasing its own shares as appropriate. This results in the Group having no
borrowing requirements and the ability to pay an attractive yield.


Environmental and social responsibility


Jarvis is committed to reducing waste because of the environmental and cost
implications. We do not see environmental concerns as negative to our business
progress but complimentary. To this end we have instigated a number of
initiatives relating to electronic communication and payment in order to reduce
paper usage and the carbon effects of transporting documentation. Jarvis has
been storing its client documentation electronically for more than four years
now and this significantly reduces wasted space and the resultant costs of rent,
light and heat as well as the environmental impact of physical storage. This
further supports our business continuity objectives. Jarvis have supported a
number of local events, including the Tunbridge Wells Business Awards, where we
were delighted to be a runner-up in the Customer Service section, and we see our
firm as part of our local community as well as a national service provider.
Jarvis has supported a number of charities during the year and we are committed
to continuing to do so and to develop new ways to cut our waste and impact upon
the environment. Donations made to:


   • Comic Relief
   • British Heart Foundation
   • Demelza House
   • Shooting Star Children's Hospice
   • RSPCA


Jarvis also won another Investor's Chronicle award this year. These are awarded
on the basis of a public vote, which makes this a real achievement against our
larger competitors.


Key Performance Indicators (KPI)


The primary goal of the Board is efficiency. We believe this to be at the heart
of a successful business and we believe that efficiency is central to pleasing
all the stakeholders in the Jarvis Securities plc Group. Efficiency means a
constructive and satisfying work environment for employees, a positive
experience for clients, reduced environmental impact, reliability for those
organisations that trust Jarvis to support them and a robust financial
performance for shareholders. The following measurements, or KPIs, are important
in monitoring and directing the development of the Company:


Operating profit margin

This is operating profit as a percentage of turnover. This is a good indicator
of efficiency, as a high margin tends to suggest that work is completed quickly
and accurately resulting in a high rate of return for the Group. The average
margin for our competitors is 6.77% (source: ComPeer annual benchmarking report
2005). The Board aims to have significantly higher than average margins and to
keep these above 20%.


2006:             33.45%
2005:             22.31%


ROCE

The return on capital employed is the operating profit as a proportion of the
fixed capital used in the business, such as assets. A high rate of return, ROCE,
indicates the efficient use of the resources of your Group. Given the low
capital nature of our business model we would expect a relatively high ROCE
figure. The Board aims to maintain a ROCE figure of double the one-year Treasury
rate, giving a current target of 11.2%.


2006:             75.2%
2005:             43.3%


Revenue per employee

This is turnover per staff member and an increasing rate of revenue per employee
represents increasing efficiency. Given that the Group's staff is not only its
largest single cost but also its most important resource this measure is
fundamental in monitoring performance. The Board's aim is to grow revenue per
employee at a faster rate than payroll costs, excluding any non-recurring items,
in order to improve returns to shareholders and increase efficiency each year.


2006:             155,439
2005:             115,290

Revenue increase rate: 34.8% vs. payroll cost increase: 11.2%


Funds under administration:

A growth in stock and cash held for clients by Jarvis indicates growth of the
firm. Whilst this can be due to external factors such as market values which are
beyond the control of the Board this is a useful indicator of the general
direction of the company. Interest on cash held for clients is a significant
proportion of the Group's income and hence this provides a good guide to
anticipated earnings in combination with current interest rates. The Board aims
to grow both cash and stock under administration explicitly each year.


Cash 2006:         £32M
Cash 2005:         £23M

Total assets 2006: £309M
Total assets 2005: £233M


Client numbers

Increasing client numbers is essential in increasing the size of the business in
the future. Increasing revenue per client is also desirable to accelerate the
growth of the business and hence these two measures are considered together. The
Board aims to increase client numbers by at least 10% per year and maintain
positive revenue growth per client. In combination this will drive turnover
growth for the Group into the future.


Rate of Increase (Number): 19.6%
Rate of Increase (Revenue): 7.84%


Complaints ratio

Providing a good service to clients is essential for a strong business. The
number of formal complaints made per 1,000 accounts is an indicator of how good
the service provided is. It is essential to keep this figure low to maintain
clients and attract new ones. The Board aims to keep the number of formal
complaints per 1,000 accounts below 2. The average amongst our competitors is
8.92 (source: ComPeer annual benchmarking report 2005). Jarvis had the best
ratio in the execution-only industry in the last ComPeer report and we are very
proud of this achievement.


2006:          0.51
2005:          0.44


Calls answered in three rings

Unlike many firms in financial services we still believe in personal attention.
Jarvis do not use automated telephone menu systems and we aim to answer 90% of
all telephone calls within three rings. We believe that this differentiates us
from competitors and makes our firm more attractive to clients:


% of calls answered in three rings in 2006: 88.5%
% of calls answered in three rings in 2005: 92.4%


These results were adversely affected due to an unexpectedly busy period in the
first quarter of the year. Performance was improved significantly during the
year with 95.0% of calls answered in three rings by December.


Sickness days

Our staff are our most important resource and they control the success or
otherwise of Jarvis. We aim to provide a happy and positive work environment.
This is difficult to measure in strictly numerical terms but an accepted
indication of morale is the proportion of working days lost to illness. This is
calculated by dividing the number of whole working days lost per year for all
employees by the maximum potential number of working days available (assumes
average number of employees multiplied by 260 days per employee). The Board's
aim is to attain a loss of less than 1% per year.


2006:      1.85%
2005:      0.75%


These results were adversely affected due to a skiing injury and the
hospitalisation of a second employee, which are abnormal events.


EPS and P/E ratio

The principal measures used by investors to compare and rate publicly traded
companies are the earnings per share (EPS) and the relative multiple to these
earnings of the current share price (the price earnings or P/E ratio). Therefore
the Board must have regard to these measures in order to maximise returns to
investors. EPS is a result of dividing profit after tax by the average number of
shares in issue throughout the period. The P/E ratio is the share price divided
by EPS. The P/E ratio is largely a product of the market price of the shares in
the Company and hence is largely beyond the control of the Board. Certain
actions can be taken where this is perceived by your Board to be out of sync
with comparable firms, such as the purchase of shares for cancellation as
undertaken in the year. However this is mainly a result of public perception and
is therefore difficult to change. These measures are important to investors and
hence need to be given high regard. The Board aims to grow EPS by at least 25%
per year, which is an aggressive target for expanding Jarvis. The Board will
continue its efforts to increase the P/E ratio to reflect its belief that Jarvis
should have a premium rating to its competitors because of its growth rate,
yield and differentiated business model.


2006 EPS:                6.79p
2005 EPS:                2.63p
Rate of change:          158%

2006 P/E ratio:          14.0
2005 P/E ratio:          29.3


Future developments

Jarvis Securities plc continues to seek further acquisition targets that can be
integrated into the operating subsidiary with resultant cost savings and
cross-selling opportunities. Jarvis Investment Management plc will continue to
actively promote its retail and third party stockbroking and administration
services.


Results and dividends

The consolidated profit for the year after taxation amounted to £776,931 (2005
£301,711). Ordinary dividends of £458,768 (2005 £287,114) were paid during the
year. The balance on the profit and loss account has been carried forward and a
final dividend of 2.5p per Ordinary 1p share is proposed by the Board subject to
approval at the annual general meeting.


For Further Information:

Jarvis Securities plc
Mathew Edmett Tel: 0870 224 1111

Daniel Stewart & Company plc
Lindsay Mair Tel: 0207 776 6550





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