Source - SMW
IT managed services group Redcentric booked a deeper first-half loss, owing to falling sales and costs associated with a regulatory probe into misleading market statements.

The company, however, upped its annual dividend, amid an improvement in sales during the second half.

Pre-tax losses for the year through March amounted to £10.6m, compared to losses of £1.4m on-year, and included a £11.4m hit from the regulatory breaches. Revenue fell 6% to £87.5m.

The UK's Financial Conduct Authority recently found that Redcentric had previously issued results that materially misstated its net debt and overstated its true asset position.

Redcentric subsequently agreed to offer compensation to affected investors who purchased its shares between 9 November 2015 and 7 November 2016.

Its underlying operating profit, which excluded those expenses, rose 5% to £20.6m.

The company declared a full-year dividend of 1.83p, up 31% on-year, having made a 'good start' the new financial year, with all key business metrics showing positive trends.

'We have had a very productive year with many of the initiatives undertaken giving rise to long term benefits,' chief executive Peter Brotherton said

'After three years of decline, recurring revenues are now growing and account for 89% of total revenues.'

'The efficiency and integration initiatives undertaken during the year have resulted in annualised savings of £3.5m, which will boost future profitability.'

'The settlement with the FCA means that the company's management team is now free to focus solely on the business and able to sell to all markets, including those regulated by the FCA.'

At 9:38am: (LON:RCN) Redcentric PLC share price was +0.5p at 132.5p

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