Billing Services Group Limited (LON:BILL) warned on profits but its shares soared after it generated extra revenue and cash flow by providing more profitable services.
The telecoms clearing and financial settlement product supplier said underlying first-half earnings fell to US$3mln from US$3.3mln a year ago on a dip in revenue to US$16.2mln from US$18.8mln beforehand.
It blamed the displacement of landline phones by mobiles and tougher regulation.
But the group said a new strategy of providing more services to the wireless sector was working, albeit not at a fast enough rate to replace the decline in revenue from landline services.
Billing Services added that class action litigation under which the company incurred indemnification liabilities to two of the largest local exchange carriers was approaching an end.
“The reserves we established have proven adequate in meeting our obligations,” it said.
Shares rose 0.89p, or 26%, 4.26p in morning London trading.