Cello Group plc (LON:CLL) raised its interim dividend by 19% as it drew a line under its dispute with the UK tax office.
Mark Scott, chief executive, said the group was back on a growth path following the VAT issue.
The healthcare marketing group settled the dispute over the VAT status of charities it works for by agreeing a £5.3mln payment to HMRC.
That included a £2.1mln provision in the latest half year numbers. Discussions about recouping some of the money from its customers are underway, it added.
Cello had already flagged it was changing its dividend policy to a 40% annaul payout rate and the interim rise announced today highlighted strong cash generation in the first six months of the year.
Sales to June were 5% higher at £80.9mln with underlying profits flat at £4.2mln.
After the tax provision, restructuring costs and start-up losses there was a statutory loss of £900,000.
Cello Signal, a digital marketing agency for charities and blue chips saw profits climb by almost three quarters to £1.6mln, though the larger health arm dipped 9% to £3.9mln as it was restructured.
Scott, though, was upbeat over the health arm’s potential.
“Cello Health has the potential to become a global leader in the growing healthcare advisory services space and rapid progress is being made towards this goal,” he said, adding “Cello Signal's potential as a powerful growth and profit engine for the group in the digital solutions space is now also taking shape.”