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After the BP dividend cut, where’s left for the income-hunter? 

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after the bp dividend cut wheres left for the income hunter

BP shareholders who rely on dividend payments from their investments will see their income slashed after the oil giant halved the profits it pays out.

It is the first time the BP has cut its dividend in a decade and follows a string of similar moves from companies seeking to protect themselves from the pandemic.

BP generates the largest dividend payout among the blue chip FTSE 100 giants and experts say the firm will remain one of the largest payers this year, despite the cuts. Investors can still expect returns of around 20p per share, a yield of 6.7 per cent.

BP traditionally generates the largest dividend payment among the big blue chip FTSE 100 giants and experts say the firm will remain one of the largest payers this year despite the cuts

BP traditionally generates the largest dividend payment among the big blue chip FTSE 100 giants and experts say the firm will remain one of the largest payers this year despite the cuts

BP traditionally generates the largest dividend payment among the big blue chip FTSE 100 giants and experts say the firm will remain one of the largest payers this year despite the cuts

Laura Suter, personal finance analyst at AJ Bell, says other FTSE 100 options include Aviva, which has a forecast yield of 11.7 per cent and M&G at 11.5 per cent. 

But she adds these may be overly optimistic and notes BP’s initial forecast yield was 10.6 per cent.

BP’s move came as it posted a record £5.2 billion ($6.7 billion) quarterly loss, after a drop in the demand for oil. The firm has announced it will cut 10,000 jobs, with as many as 2,000 at risk in the UK.

Many companies are seeking to hang on to cash reserves by slashing dividends.

Banks have cancelled them altogether and Shell made its first dividend cut since World War II in April, reducing the quarterly payouts by two-thirds.

Link Group’s Dividend Monitor shows dividends fell by 57 per cent in the second quarter of the year as 176 companies cancelled payouts and 30 more have cut them.

Ms Suter says investors could look at firms with track records of dividend growth, such as industrial equipment rental company Ashtead, which has delivered a compound annual growth for its dividend of 29 per cent over the past ten years.

Adrian Lowcock, of investment firm Willis Owen, says investors should look at diversifying their portfolio in the UK and consider funds such as Threadneedle UK Equity income, whose holdings include AstraZeneca and GlaxoSmithKline, as well as supermarket Morrisons.

m.dilworth@dailymail.co.uk

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Will Winter Economy Plan save jobs and how does it work? This is Money podcast

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will winter economy plan save jobs and how does it work this is money podcast

There won’t be another budget this year. Instead, we had the Winter Economy Plan unveiled this week as fears over a second wave of coronavirus infections – and the further economic turmoil it could create – takes hold.

Despite repeated calls to extend the furlough scheme, Chancellor Rishi Sunak held firm.

How does this new Jobs Support Scheme stack-up, will it be enough and what else did Mr Sunak reveal? Simon Lambert, Lee Boyce and Georgie Frost take a look.

Meanwhile, importers are worried about container delays at Felixstowe Port, with coronavirus measures reportedly creating a backlog.

NS&I made some brutal cuts to savings rates and its Premium Bonds – why did it make the move, just how severe are the cuts and where can savers head next?

Winter Economy Plan: Chancellor Rishi Sunak unveiled his latest jobs plan this week

Winter Economy Plan: Chancellor Rishi Sunak unveiled his latest jobs plan this week

Winter Economy Plan: Chancellor Rishi Sunak unveiled his latest jobs plan this week

We could be about to see the end of the loyalty penalty – when sticking with one insurer for your car or home really doesn’t pay – and it may save households nearly £4billion in the next decade.

And lastly, hot tubs… the hot weather at the start of lockdown saw many people snap them up. But, now, many are complaining of faulty ones, with difficulties getting them fixed.

How to listen to the This is Money podcast 

We publish our podcast every Friday to the player on This is Money, above, and on Apple Podcasts (iTunes) and on the podcast platforms Audioboom and Acast, both of which allow you to listen on desktop, mobile, or download an app. We also now publish to Spotify.

To download the Apple Podcasts app if you do not already have it, go to the App store. Or go to either the Apple App store or the Google Play store on Android to download the Acast, AudioBoom or Spotify app. 

Press play to listen to this week’s full episode on the player above, or listen (and please subscribe and review us if you like the podcast) at Apple Podcasts, Acast, Audioboom and Spotify or visit our This is Money Podcast page.   

This post first appeared on dailymail.co.uk

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SMALL CAP MOVERS: Various Eateries to capitalise on hospitality crisis

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small cap movers various eateries to capitalise on hospitality crisis

It is difficult to know whether serial entrepreneur Hugh Osmond’s timing is awful or inspired.

The float of his Various Eateries chain occurred at possibly the worst moment for the restaurant sector. However, out of adversity tends come opportunity.

On Friday the owner of the high-end Coppa Club and Tavolino venues raised £25million by placing 34.2million shares at 73p each, for a market capitalisation of £65million.

Stock market debut: Coppa Club and Tavolino owner Various Eateries hopes to expand its portfolio through opportunistic acquisitions now that rivals are struggling

Stock market debut: Coppa Club and Tavolino owner Various Eateries hopes to expand its portfolio through opportunistic acquisitions now that rivals are struggling

Stock market debut: Coppa Club and Tavolino owner Various Eateries hopes to expand its portfolio through opportunistic acquisitions now that rivals are struggling

Six-year-old Various Eateries, whose summer trading reached 50-60 per cent of 2019 levels in London and nearly pre-pandemic figures elsewhere, will use the proceeds to expand its portfolio through opportunistic acquisitions.

‘To many, this crisis is an existential threat; but it is also a once-in-a-lifetime opportunity to build a new, major leisure business, based on how people want to live now,’ said founder Osmond.

Of course he has some form after transforming Pizza Express and building Punch Taverns into an 8,000 pub goliath worth £3.5billion. He also helped create the FTSE 100 insurance aggregator Phoenix Group, and has two private equity firms he still manages.

For his latest venture he has teamed up with Andy Bassadone, the force behind Italian restaurants Strada and French bistros chain Côte, while most recently he led the expansion of Bill’s Restaurants and The Ivy Collection.

While Osmond was spying a ‘once-in-a-lifetime opportunity’, the problems were pretty acute for the rest of the sector with the 10pm curfew now in place. Arguably it could have been worse.

Booze-led Revolution Bars tumbled 24 per cent to 10p after announcing a radical restructuring in the wake of the new restrictions, while pub chains Young’s and City Pub were down 14 per cent to 835p and 10 per cent to 58p respectively.

In the food space, Loungers was down 15 per cent to 139p, while Franco Manca owner Fulham Shore lost 10 per cent to 7p.

Posh cinema operator Everyman was only down 7 per cent to 81p. Given the bloodshed at larger rival Cineworld, this ranks as a success and is possibly reflective of the more niche, higher margin experience-based approach taken by Everyman, which isn’t reliant (totally) on blockbusters and popcorn.

Turning to the wider market, the AIM-All Share dipped 2.5 per cent to 948, just outperforming the FTSE 100 which was down 3 per cent to 5,822.

Among the fallers, diagnostics firm Genedrive shed 15 per cent to 128p after admitting it takes extra time to get US approval for its Covid-19 automated laboratory testing due to the nature of saliva samples. Broker InterTrader also trimmed its stake to 2.4 per cent from 3.3 per cent.

Elsewhere, marketing consultancy Ebiquity dropped 11 per cent to 20p after turning to an interim loss before tax of £1.9million, although it expects to return to profitability in the second half.

Among the risers, National Accident Helpline owner NAHL Group climbed 41 per cent to 56p after revealing that asset manager Frenkel Topping has proposed a takeover, though it is too early to confirm whether a transaction will go ahead.

Boohoo shares rose after announcing it will address the issues flagged by an independent review regarding its 'weak' corporate governance practices

Boohoo shares rose after announcing it will address the issues flagged by an independent review regarding its 'weak' corporate governance practices

Boohoo shares rose after announcing it will address the issues flagged by an independent review regarding its ‘weak’ corporate governance practices

Open Orphan surged 15 per cent to 17p after confirming it is indeed in advanced negotiations with the UK government for a Covid-19 vaccine challenge study as speculated by the press.

The biotech plans to expose 48 healthy volunteers to the virus at a facility in London’s Whitechapel to assess whether its nasal candidate provokes an immune response.

Meanwhile, fast fashion designer Boohoo rose 13 per cent to 359p after announcing it will address the issues flagged by an independent review regarding its ‘weak’ corporate governance practices.

Finally, finnCap’s results suggested the small-cap arena will be vibrant and healthy for the next few months with a flurry of IPOs and fundraisings.

This week payments provider Fonix Mobile and telecoms services provider Calnex announced their intention to float, while bioplastics firm Biome Technologies proposed to raise £1million via a placing to speed up growth. No IPOs in sight for next week, we’ll have to wait for October.

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How to make your home green and add value to it

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how to make your home green and add value to it

The past few months have triggered a new determination for many people, whether that’s growing vegetables, learning a language or perfecting sourdough.

Now, it seems that many of us are keen to change the way we live and are looking forward to a cleaner, greener lifestyle.

One way to do this is by saving hundreds of pounds each year on your energy bills by making your home more environmentally friendly. 

Any improvements will also add value to your home, as eco homes are growing in popularity.

Eco appeal: New cottages with solar roof panels in Kendal, Cumbria. More people are looking forward to a cleaner, greener lifestyle and there are Government grants to help

Eco appeal: New cottages with solar roof panels in Kendal, Cumbria. More people are looking forward to a cleaner, greener lifestyle and there are Government grants to help

Eco appeal: New cottages with solar roof panels in Kendal, Cumbria. More people are looking forward to a cleaner, greener lifestyle and there are Government grants to help

And this is the time to do it. The Government has launched a Green Home Grants scheme, which provides homeowners with up to £10,000 in vouchers to pay for the cost of energy-saving measures including insulation, double and triple glazing, and low-carbon heating.

‘Improving the efficiency and sustainability of your home is an investment that will become more valuable over time,’ says Kunle Barker, co-presenter of Love Your Home & Garden and Grand Designs Live, and property expert for sustainable building firm InFrame.

Here are Barker’s top tips for making green home improvements…

Plug the gaps 

The place to start is insulation, which is covered under the Green Homes Grant scheme available from the end of this month. 

You can claim up to £5,000 (or more if you are a low earner) towards two-thirds of the cost of the work, which must be completed before March 31, 2021.

‘Around 70 per cent of your heat goes out of the walls and if your windows are leaking, it is like throwing fivers into the wind,’ says Barker.

Draught excluders are a quick win that can be fitted around doors and windows from between £200 and £300, saving you up to £20 a year on your energy bills.

Loft insulation costs about £300, reaping an annual saving of £180 a year.

Replacing draughty windows with double glazing will keep you snug and save up to £175 a year. Prices for one window range from £350 to £600. 

Barker recommends choosing windows with a so-called solar film for greater energy savings, but says triple glazing is not worth it.

InFrame uses ‘superfoil’, a Nasa space technology, in its renovations. Superfoil is a type of external solid wall insulation. It makes your home airtight and radiates heat back into the house.

‘Think of it as like wrapping your house in a huge thin duvet,’ he says. It costs £3,500 for a three-bedroom terrace and can save you about £145 a year on bills.

Boost your rating

‘There is no one-size-fits-all approach when it comes to improving the efficiency of a home, so carry out an energy survey first,’ says Barker.

An Energy Performance Certificate (EPC) rates the efficiency of your home, with G being the worst and A being the best. If you don’t have an EPC, instruct a professional to survey your property using epcregister.com. Prices vary, costing up to £120.

A higher rating can improve the value of your home. For example, going from a G to an A could add 14 per cent to the average property value in England, according to research for Moneysupermarket.com.

Low-carbon heating 

IR source heat pumps and solar panels are covered by the Government’s grant.

An air source heat pump, which costs about £8,000, takes heat from the air outside and increases it to a higher temperature. If you are replacing a liquid gas heating system, you can save about £285 on your bills a year.

Solar panels are less expensive to install but not suitable for every house. You can generate your own reusable energy and earn money by transferring unneeded power to the National Grid.

Eight panels on a semi-detached house cost about £3,800 and will save typically £90 a year while earning you up to £120 a year for sending money to the grid.

Smart tech 

Smart thermostats, available via the Green Homes Grant, allow you to control your heating remotely using your phone. 

Some systems detect if a window has been left open and turn the heating off, others begin heating your house as you return from work. 

You can also have electronic valves on radiators to adjust the temperatures of individual rooms. Prices range from £150 to around £300.

On the market… climate-friendly homes 

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