Shares in Intelligent Environments (iE) gained in morning trading after the UK retail banking vendor said it expects first half gross and operating profits to "increase materially" compared with the same period last year.
The vendor's shares rose 11.3%, or 0.75 pence, to 7.38 pence in mid-morning trading after it released a bullish update for the six months to 30 June saying recurring royalties were "substantially" ahead of 2007.
The completion of low margin projects and a cut in the use of contractors has helped profitability, says iE.
But the vendor warns that overall revenues are expected to show a "marginal decline", due to a drop in low margin service work.
However, the company expects operating profits to continue to improve in the second half of the year as three new partnerships with blue chip brands go live.
In addition, iE says a 200% increase in research and development spend in H1 is helping it to capitalise on "new market opportunities" and attract pan European partnerships.
Phill Blundell, CEO, iE, says the firm's investment in products and partnerships has led to "solid and sustainable" financial results whilst the cost base has been cut and recurring revenues are growing.
"This gives the board further confidence that the performance for the full year will be significantly improved from 2007," says Blundell.
You can view iE share data here.