Market reaction when companies cut their dividend.

Full year dividend rebased to 2.0 pence per share:

·      With macroeconomic uncertainty continuing and interest rates now expected to remain elevated for some time, the Board has taken the decision to rebase the dividend to a level that is sustainable and substantially covered by adjusted earnings over time. The additional financial flexibility will enable the Group to effectively progress its strategy to deliver on the value accretive opportunities it has created.

·      The Board has therefore declared a second interim dividend of 1.0 pence per share, bringing the total dividend for the year to 2.0 pence per share. This will be paid as an ordinary dividend on 13 May 2024, with an ex-dividend date of 4 April 2024. The Board will look to maintain a sustainable dividend going forward, with the intention that future dividends reflect the progression in underlying earnings.

Watch to see if they maintain the dividend, which should be a yield of around 6% and then decide if the risk versus/reward is worth taking the trade for the huge discount to NAV.

If the dividend isn’t maintained the discount to NAV could widen ever further. But as always best to DYOR as it’s your hard earned.