Fountains, the grounds maintenance and forestry services group, has pleased investors with a 9% hike in the half-time payout and an 11% rise in profits for the six months to March. Pre-tax profits rose from £477,000 to £530,000 on turnover up 9% to £17.7m and a 0.07p interim dividend increase to 0.85p is proposed. Chairman Barry Gamble lauds the company's strong cash generation, 'one of the best measures of our customer's satisfaction', with the net cash inflow from operating activities improving from £652,000 to £731,000, and debtors falling from £9.8m to £8.9m as Gamble and his management team collected cash more efficiently. The core utility services and grounds maintenance business, some 80% of turnover, scored good first-half growth - Fountains works with the major electrical utilities in the UK and Ireland, and also handles vegetation control for the rail sector. Fountains candidly admits it closed or re-negotiated certain underperforming deals, but says it has also signed up a new utility customer. Gamble says the forestry business is 'starting to come back', with US forestry turnover more than double the comparative period. 'We're continuing to increase profits and generate cash,' he roars. For the year, house broker Collins Stewart predicts a £1.4m profit, earnings of 9.2p a share and a 2.8p payout. Decent value. Hold for now.