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By Richard Evans All investors know that the shares they own can make them wealthier both by growing in value and by entitling them to regular dividend payments. But certain shares offer a third way to boost their owners' finances: some companies offer their shareholders Regular travellers are among those who can benefit most from these fringe benefits, although discounts are also available on a wide variety of goods and services, from cars and clothes to mobile phone contracts. Financial experts generally caution against buying shares solely for the perks, however. "Look at the investment case first," says Keith Bowman, a UK equity analyst at Hargreaves Lansdown, the stockbroker. "For example, housebuilders may offer discounts of thousands of pounds on the cost of a new property, but you will probably need a large investment to qualify." To be eligible for a discount on a home from Persimmon, say, you would need to buy 1,000 shares at a cost at the current share price of nearly £15,000. As the 2 per cent shareholder discount on a Persimmon property is capped at £3,000 and you have to hold the shares for a year to qualify, there is a risk that fluctuations in the share price could wipe out the saving you make on buying the property. You would also be tying up a large amount of your cash for a long time. Some builders have even higher thresholds: Bellway's scheme, for example, kicks in at 2,000 shares, which will cost about £30,000, although the discount - of £625 per £25,000 of the property price - is uncapped. Other shareholder benefits are available for a much smaller outlay. "British Airways is worth looking at for the perks," says Mr Bowman. "The minimum holding is 200 shares [costing about £1,000], which qualifies you and up to five travelling companions for a 10 per cent discount on one trip a year. When it comes to BA as an investment case, the shares have risen by over 50 per cent over the past year, and the consensus among brokers is that the shares are a 'hold'." Other transport and holiday companies to offer attractive discounts include First Choice Holidays, Holidaybreak, ferry line Irish Continental and travel promotions company Landround. Meanwhile, Wolverhampton & Dudley, the brewery and pub owner, offers a 20 per cent discount on food and accommodation in some of its pubs to investors with as few as 10 shares, which would require an outlay at current prices of around £185. "These shares have also risen by about 50 per cent in a year," says Mr Bowman, "and the market rates them a hold. But, as a company with property assets, there is the possibility of conversion to Reit [real estate investment trust] status, which could see the shares re-rated." For the princely sum of £5.98 (plus dealing costs, of course) you could buy a share in Millennium & Copthorne, the hotels group; a single share is all you need to be eligible for six vouchers offering a 15 per cent discount on accommodation, food and beverages. Brokers are broadly positive about the prospects for M&C's shares, says Mr Bowman, although they too have seen a strong rise over the past year; property assets and the possibility of conversion to a Reit are again among the reasons for optimism. As well as checking for minimum shareholdings and other conditions, investors who hope to benefit from perks should also find out whether their shares need to be held in certificate form, which ensures that the shareholder's own name appears on the company's share register. If you hold shares via a nominee account or in a Pep, Isa or pension plan, the share register will record your broker or plan provider as the owner of the shares and the company may not offer you any perks. Policies on nominee accounts vary from company to company; some will insist on certificated holdings; others, such as Redrow, another house builder, will allow shareholdings in nominee accounts to qualify provided that the operator of the nominee account confirms that you are indeed the beneficial owner of the shares. One of the most popular companies among perk-hunters in Eurotunnel, the company that operates the Channel Tunnel. Unfortunately, you cannot buy the shares at the moment - they are suspended pending a financial restructuring that will see existing investors swap their shares, subject to approval by the courts and shareholders, for equity in a new company called Groupe Eurotunnel. "Most British shareholders bought the shares for the perks," says a Eurotunnel spokesman. "Of the company's 650,000 individual shareholders, 120,000 are British and the remainder are French - but hardly any of the latter take advantage of the perks." The benefits vary according to the time at which the shares were issued. Those who bought 5,000 or more shares in the original issue qualify for unlimited journeys at a fare of just £1, but these shares were no longer available even before the suspension. Owners of at least 1,000 shares from more recent issues are entitled to a 30 per cent discount on three trips a year. The company's forthcoming transformation should not affect shareholder perks, the spokesman said. Among the less generous fringe benefits on offer are those from British Land - which issues, on an ad-hoc basis, invitations to company exhibitions and offers discounts on the catalogues of exhibitions that it sponsors - and Tesco, which says shareholders attending the annual general meeting may receive a small gift such as a bottle of wine. If you do decide to buy shares in any company partly on the strength of the fringe benefits, check with the registrar or the company itself that the offer still applies, as perks can be withdrawn or changed at any time.
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