Shares in Coventry Group have risen as much as 14 per cent today following an improved debt position and a return of dividends.
The company's share price jumped 12 cents to 98c at 13:53 AEST.
The positive share price performance on an otherwise weak day for the bourse follows Coventry's announcement after market close on Friday.
Coventry said late last month it had completed the sale of its property in Osborne Park, which coupled with cost reduction initiatives, had reduced the group's net debt from its peak of $83 million in 2007 to just below $20 million.
The group had also successfully negotiated an extension to its debt facility with Westpac to July 10.
As a result of the improved debt position, Coventry announced it will pay a fully franked dividend of five cents per share and the dividend reinvestment plan has also been reactivated.
The good news follows a forecast provided by Coventry in May that the group's full-year net profit would be substantially below the previous year's $6.9 million and earnings before interest and tax (EBIT) would be on par at $10 million.
In the update on Friday, Coventry said EBIT is likely to be around $8 million and has forecast a full-year net loss after allowing for asset impairments.
Coventry said the main factor influencing its updated earnings was the continuing adverse impact faced by the industrial products business unit particularly in the resources sector and infrastructure projects.
"Those conditions have continued to deteriorate since the previous market update and whilst there are some signs of an improvement in general economic conditions it now appears probable that negative trading conditions will continue for the remainder of the 2009 calendar year," the group said.