Software firm to pay special dividend

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Electronic Data Processing, the Sheffield-based software developer and IT services provider, is to pay shareholders a special interim dividend of 5p.

The Fountain Precinct-based company, which paid a 0.713p interim dividend last year, says the decision to pay a special dividend has been taken because of the “relatively large cash balances” that it had built up.

Cash balances currently stand at £5.9 million – up from £5.2 million last year – and EDP says it plans to use the remaining balances to buy other businesses, if suitable opportunities arise.

EDP specialises in providing IT solutions for the UK wholesale distribution industry and sales intelligence software to wider markets. The firm increased pre-tax profits by 17 per cent to £424,000 for the six months to the end of March on turnover up at to £2.93 million, from £2.89 million.

Chairman, Sir Michael Heller, said: “We have a robust business model, with strong recurring revenues and a carefully managed cost base.

“Whilst the economy remains uncertain our customers will remain cautious. However, with our product and financial strength we are well placed for the future.”

Sir Michael said the economic back-drop had created a very mixed picture for the sectors EDP serves, with some experiencing growth, whilst others continued to face difficulties.

Clients were continuing to see the benefits of having software delivered through the “Cloud” and the proportion of turnover generated by EDP’s hosting centre in Milton Keynes had risen from 41 per cent to 44 per cent. EDP has increased its investment in research and development from £426,000 to £469,000 as it continues to enhance its key software.