Redcentric PLC (LON: RCN) have seen their shares jump on Thursday afternoon after the firm doubled its interim dividend.
Redcentric PLC is a customer focused end to end managed service provider delivering innovative technology to improve business productivity and efficiency.
The IT firm offer a range of Application, Collaboration, Infrastructure, Network, Security and Business Mobile services.
Shares of Redcentric jumped 6.44% after the announcement to 92p. 28/11/19 12:05BST.
The firm announced that it would double its interim dividend after it swung to an interim profit despite lower revenues.
Financial 2019 has been a mixed year of results for Redcentric, as the firm reported a loss in June as it saw a fall in sales.
However, shareholders will be thoroughly impressed as RedCentric seem to have ended the year on a strong note.
In the software industry, competitors such as Avast (LON: AVST) and Kainos (LON: KNOS) have made strong gains.
Additionally, overseas competitor Intel (NASDAQ: INTC) have given shareholders a bullish update, which will stiffen competition for Redcentric.
For the six months ended September, pretax profit swung to £887,000 from a loss of £122,000 the year prior.
This was despite revenue falling 9.1% to £43.2 million from £47.5 million the year before.
“Visibility of future revenues remains strong with recurring revenues reaching 90%,” Chair Ian Johnson said. “New customers were added in the period which, together with effective cross selling, led to quarter on quarter revenue growth. This revenue growth has been achieved despite the ongoing FCA investigation, which continues to impact the pace at which we win new business.”
“Management continues to improve the operational efficiency of the business,” Johnson added. “The strategic data centre and network portfolios review now underway is expected to lead to the realisation of annual savings of at least GBP2.8 million and further improvements in operating margins.”
Redcentric proposed a 0.83 pence per share interim dividend, up from 0.40p the year prior.
“Cash flow remains strong allowing significant investment into our network and a further reduction to net debt in the period,” Johnson continued. “The board is confident that the business will continue to generate strong cash flows enabling it to return cash to shareholders by way of dividend and further share purchases via the share buy-back programme.”