March 12, 2009 / 8:32 PM / 9 years ago

UPDATE 1-Jackson Hewitt suspends quarterly dividend

* Suspends quarterly dividend of $0.18/shr

* Move expected to save just over $20 mln per year

* Shares down 3 pct after the bell

March 12 (Reuters) - Jackson Hewitt Tax Service Inc JTX.N, the No. 2 U.S. tax preparer, said it will suspend its quarterly dividend to conserve capital and enhance its growth prospects for 2010 and beyond.

The move will enable the company to save just over $20 million a year, and help develop its online presence and expand its retail distribution base, Jackson Hewitt said in a statement.

Jackson Hewitt, which competes with H&R Block Inc (HRB.N), the largest U.S. tax preparer, paid a third-quarter dividend of 18 cents a share in December.

Last week, Jackson Hewitt forecast 2009 results well below market estimates, and said it was seeking relief from lenders regarding its leverage ratio covenant. [ID:nBNG157294]

Shares of the Parsippany, New Jersey-based company were down 10 cents in trading after the bell. The stock closed at $3.17 Thursday on the New York Stock Exchange. . (Reporting by Anurag Kotoky in Bangalore; Editing by Deepak Kannan)

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