LONDON (ShareCast) - (ShareCast News) - Cloud services provider, Iomart Group hiked its final dividend payment touting its strong cash generation and management's confidence in the outlook.
The final payout for the full-year to 31 March was set at 6.0p per share, representing a 90% increase over the year-earlier level and a pay-out ratio of 35%.

Linked to the above, the firm increased the upper limit for its dividend payments from up to 25% to up to 40%.

"We have decided to improve our dividend policy to reflect the ongoing growth that we have been delivering, the level of cash we generate, and the confidence we continue to have in our future prospects," the company said in a statement.

AIM-listed Iomart had already flagged the possibility of such an increase in its end of March trading update.

Full-year revenues were up by 17% to £89.6m, which together with stable margins of 25% at the PBT level helped drive a 22% rise in cash flows from operations to £37.8m.

Commenting on the results, Finncap's Andrew Darley highlighted the return to organic growth of the company's Easyspace unit.

"As ever, therefore, the typical Iomart steady pace of bolt-on acquisitions added to group performance [...] The quality of the company remains difficult to match, with expected results routinely delivered with a maximum variation of 1-2% before acquisitions," Darley said in a research note sent to clients.

In the same note, Darley revised his target price for the shares higher from 360.0p to 400.0p.

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