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(Sharecast News) - Jarvis Securities reported the completion of the sale of its retail execution-only brokerage clients on Tuesday, and set out further details of the wind-down of its regulated subsidiary, alongside an update on an FCA redress process, in its audited results for the 18 months ended 30 June.
The AIM-traded group said the publication of its audited accounts had been delayed while its accounting reference date was extended to facilitate the completion by Jarvis Investment Management of the client sale.
It said the transaction was completed on 8 July, with initial proceeds of 9m received on that date.
Two further deferred consideration payments of 1m each were due 12 and 24 months after completion, subject to conditions previously outlined by the company.
The board said it remained focused on delivering an orderly and efficient wind-down of JIML and had appointed S&W Partners to independently monitor the process.
JIML continued to progress remediation work, resulting in ongoing significant costs.
While interest income continued to be generated, Jarvis said it had fallen materially as client money balances reduced.
The board said it would continue to review the group's ability to pay dividends on a quarterly basis, noting that JIML was currently restricted from upstreaming dividends to Jarvis Securities under the terms of its voluntary agreed restrictions with the Financial Conduct Authority.
As at 29 December, the group had cash of 10.4m.
The company reiterated that it continued to review its strategic options, and still intended to seek the cancellation of its admission to trading on AIM in due course, subject to shareholder approval.
Any distributable reserves remaining at the time of cancellation were expected to be returned to shareholders.
In a separate FCA update, the board confirmed that JIML had determined it had incurred an obligation to provide redress to certain clients relating to historic breaches of FCA conduct of business rules.
Those included inducement breaches involving the sharing of commission with an introducer and the use of unclear or potentially misleading language in legacy client terms regarding the payment of interest on client money.
While the redress scheme remained subject to agreement with the FCA and the final cost was uncertain, JIML currently estimated a liability of around 2.8m over the next 12 months, although that could be materially adjusted if assumptions changed.
Jarvis Securities said it was dispatching its annual report and accounts and a notice convening a general meeting to approve the accounts, to be held on 29 January.
At 1537 GMT, shares in Jarvis Securities were down 20.29% at 13.55p.
Reporting by Josh White for Sharecast.com.