Wellington, May 20 NZPA - Auckland-based data monitoring company Endace Ltd today jumped 34 pence (NZ89c) to 273p on the London Stock Exchange.

The 17 percent surge in its share price came after the company, a world leader in network security reported a 26 percent gain in revenues and increased demand for its products across all regions.

It said the rise in full-year revenue was a result of increased demand for its products across all regions and that it remained confident in its prospects for the current financial year, Reuters reported.

Chief executive Mike Riley this week told the Dominion-Post that the company had decided not to move its research and development overseas.

He had warned last November that the Government's canning of tax credits put in place by the previous Labour government would impact "on how we invest in growth and where we invest in growth".

But this week he said there were "a lot of good practical operational business reasons" to keep its research in New Zealand and that the company would just have to find the money elsewhere or else invest less.

Endace's research and development operations were still competitive but "not as competitive as we could be if we were operating in other countries", he said.

The company was one of an estimated 2500 businesses Inland Revenue had predicted - before the scheme was axed - would claim tax credits worth $630 million over four years.

But Mr Riley warned the National-led Government would have to look at the way the tax system was structured if it wanted to build a "knowledge economy".

Mr Riley said the company had cut costs in the past financial year, but there was no such plan for the current year.

"The markets are looking for us to do something in the region of 15 percent to 20 percent growth this year and that actually requires investment," he said.

He told Reuters that telecommunications and government sectors remain "healthy" and financial services markets have been showing signs of recovery.

"It's encouraging to see very strong business in March continuing into April," Mr Riley said.

"There is nothing to suggest that it should be any different (going forward)."

Until now, Endace has been getting a third of its revenue from each of the telecommunications, government sector and financial services markets, but Mr Riley said that this year might be "a little bit more business out of telecoms and government and maybe a bit less out of financial services".

For the full year ended March 31, adjusted pretax profit was slightly up at $US5.3 million ($NZ8.97m) , compared with $US5.2 million in a year ago, driven by better-than-expected gross margins. Revenue rose to $30.4 million.

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