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Jarvis Securities shares fall as company faced with regulatory changes
Jarvis Securities shares fell approximately 10% on Thursday, despite strong dividend, revenue and profit growth, after the company's final results indicated it faces significant cost increases as a result of regulatory changes.
The company will be incurring increased costs on software, data feeds and higher staff numbers in order to ensure that newly required policies and are correctly implemented and monitored, management said in a statement.
Andrew Grant, chairman of Jarvis Securities, said: "The dominant theme for Jarvis during 2017 has been regulatory changes which have taken place and are due in the coming year. Considerable time and resources have been, and continue to be, spent preparing and satisfying the requirements of MIFID II and GDPR."
Aside from the issues with regulatory changes, Jarvis reported 34% growth in dividend per share, from 17.5p in 2016 to 23.5p in 2017, while profits before tax saw a 22% increase from £3,638,008 to £4,420,498 over the same period.
Revenues from continuing operations rose 13% from £8,322,844 to £9,423,436 between 2016 and 2017.
"I am urging investors to be realistic about near term results. As highlighted above our cost base has increased, so revenues will need to increase at a higher rate to maintain the growth of the past. That is not to say it cannot be done, especially if interest rates increase," said Grant.
The AIM-listed company has provided retail and outsourced financial services since 1984 and has worked with some of the world's best known financial names, according to the company website.
As of 1123 GMT, Jarvis Securities' shares were down 9.50% to 486.00p.