Redcentric PLC - Harrogate, England-based IT managed services provider - Issues 1.9 million new shares to investors holding 63.4% of its total equity. The shares are instead of a cash dividend of 2.4 pence per share. The new shares, representing 1.2% of the enlarged total, are issued at 125.90 pence each and are worth GBP2.4 million in total.
"Having regard to the strategy of the company, the board has decided to take this course of action to strengthen cash balances that enable the company to make strategic decisions in respect of its long-term leases that the board believe will improve the future profitability of the company," Redcentric says.
It notes on Friday that trading remains in line with expectations set out in November. At the time, Redcentric said it expected to see the return of "healthy" earnings before interest, tax, depreciation and amortisation margins of 25% and "excellent" cash generation following the completion of the integration of its most recent acquisitions.
Current stock price: 126.00 pence, down 1.4% in London on Friday
12-month change: down 7.5%
By Tom Waite, Alliance News editor
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Redcentric (RCN)