Craneware moves to ease tax burden on dividend up 261%

The Livingston-based firm, which provides billing systems for hospitals, mainly in the United States, said its dividend for the six months to 31 December would be 4.7p.

The payment is the same level as its total dividend in the year to the end of last June and more than two and a half times the level of last year's interim dividend.

Chief executive Keith Neilson said Craneware's policy remained to pay progressively increasing dividends each year, but hinted that the final dividend would be much lower than the interim payment. Craneware expects to pay a total dividend "somewhere north of 4.7p", Neilson said.

The payment is set up to avoid an impending increase in tax on dividends. Chancellor Alistair Darling unveiled a range of new higher taxes last year, with the levy on dividend income for high earners increasing by 10 per cent to 42.5 per cent. While the move has no impact on institutional investors, several companies where individuals hold large stakes have moved dividend payments forward to avoid the tax.

In recent weeks both Robert Wiseman Dairies and Stagecoach have announced "second interim dividends", which came with warnings that they were unlikely to pay final divis.

Neilson, who co-founded Craneware in 1999 and has served as chief executive ever since, is the Aim-listed group's largest shareholder, with a stake of more than 15 per cent.

Craneware delivered more strong results yesterday, with a 28 per cent rise in pre-tax profits to $3.3 million (2.13m). Its shares rose 3.5p to 380p.

Physicians in the US are under increasing pressure from both the government and the insurance industry to ensure bills are accurate. However, Craneware estimates that more than half do not yet have an automated system.

The Scots firm also announced it had agreed a multi-year contract with North Shore-LIJ, the "third largest, non-profit secular healthcare system" in the US. The value of the contract was not disclosed.