The firm said it will announce a dividend of 4p per share alongside its preliminary results on 18 June, which are expected to be in line with forecasts.
Daisy aims to increase its dividend by 15 per cent a year in 2014 and 2015.
Free cash flow is materially ahead of expectations, and net debt is set to be at the low end of the current market range, Daisy said.
“Though trading trends have continued as highlighted at the interim results, we are pleased to report this is balanced with improved revenue mix, product diversification and strong cash flow generation,” said Matthew Riley, chief executive and one of the firm’s largest investors with a 23 per cent share of voting rights.
“Our recently announced new £200m banking facility enables us to continue to review acquisition opportunities alongside the implementation of the progressive dividend policy we have announced today.”
Liberum analyst Lawrence Sugarman said the update was encouraging, with a sensible dividend that is covered over three times by underlying free cash flow.
The firm, set up in 2001 and floated in 2009, provides services such as online servers, data clouds and secure networks for businesses.
Shares in Aim-listed Daisy Group closed up 4.5 per cent at 129p yesterday. The company’s shares have soared more than 40 per cent since the start of the year.