Shares in software and service provider Ingenta PLC (LON:ING) jumped as it announced a plan to increase its flexibility to pay dividends and reported a rise in full year earnings.
The group, which supplies to the publishing and media industries, is seeking to cancel its share premium account in a bid to create extra distributable reserves.
Ingenta said the additional reserves will allow it to pay more dividends and support any future share buybacks. The capital reduction proposal is subject to shareholder and court approval.
Shares gained 14% to 134p each in morning trading.
Margin improvement
In a separate trading update, the company said adjusted underlying earnings in the year to December 31 increased to at least £1.4mln as it continued to see further margin improvements.
Revenue was in line with management expectations but Ingenta did not provide any figures in its statement.
The group had net cash balances at year-end of £2.1mln and intends to pay an interim dividend of 1.5p each.
"We are pleased by the significant progress on operational efficiency and profitability that we have seen over the course of the year and are confident we have the right team and product offering to propel the business through the next stage of its growth,” said chief executive David Montgomery.