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Next: special sauce: And now let us praise the special dividend, that rare and under-appreciated animal. Its theoretical underpinning goes like this: if a company has money and does not have a great use for it, then it should send that cash to investors. A little simple-minded, admittedly, but solid. The counter argument is that investors, especially income investors, like predictability. So paying a regular dividend maximises the value of the stock by making it less risky. Next, the U.K. clothes retailer, proves this point wrong. It paid £223 million in special dividends in the year reported on Thursday. That is a 2% (one time) yield at the current share price, on top of 2.6% ordinary dividend yield. Despite so much of the income coming in an irregular form, Next’s shares trade at a plump and content valuation of 18 times expected earnings, near 10-year highs. The opposition is not finished yet. They will argue that there is another avenue for the periodic return of cash that is piling up idly — buying back shares. And buybacks defer investors’ tax liabilities. The special dividend has other advantages, though. Only some shareholders (sellers) receive cash in a buyback. And buybacks tend to be terribly pro-cyclical. Companies buy in more of their shares as they become more expensive. Next, which has nothing in particular against buying its own shares, guards against this. Disciplined capital allocation is not a panacea. It does not, for example, sell clothes or anything else. But it protects investors while management tries to get the product right. And special dividends have a role to play.

Buyout groups hunt for energy targets: Private equity groups including Carlyle and Blackstone are to deploy billions of dollars in a hunt for acquisitions across the oil and gas industry, with a collapse in oil prices expected to lead to a wave of asset sales.

Oil trader Vitol’s profits rebound to $1.35 billion: Vitol, the world’s biggest independent oil trader, saw a sharp recovery in profits in 2014, aided by more favourable market conditions towards the end of the year.

U.K.’s biggest banks spent £28 billion on fines and restructuring: George Osborne justified his one-third rise in the U.K. bank levy by saying that banks could support making a higher contribution to public finances because they were becoming more profitable.

StanChart investors press bank to consider leaving London: Two big investors in Standard Chartered want the group to consider switching its domicile away from London because of the Chancellor’s decision to increase the U.K. bank levy by a third.

Savills unveils German purchase as revenue tops £1 billion: Savills boosted profits by a fifth while raising revenues by almost the same percentage to more than £1 billion for the first time.

Mortgage lending drops 9% as buyers wait for election result: Mortgage lending fell by almost 10% in February as would-be buyers postponed making a decision before the general election and new rules made it more difficult to get on the property ladder.

TSB at front of queue for bad bank mortgages: TSB may buy some of the £13 billion of Northern Rock loans being sold by the government, despite the fact that it is in talks to be taken over

At 0430GMT today, Brent crude oil one month futures contract is trading 0.35% or $0.19 higher at $54.62 per barrel. Yesterday, the contract declined 2.65% or $1.48, to settle at $54.43 per barrel, as a global glut in oil supply were intensified yet again after Kuwait's Oil Minister Ali al-Omair stated that OPEC needed to maintain its oil production to keep its market share intact. Moreover, Kuwait kept its keep output levels steady, while speculation arose that Iran might boost its oil exports within months of reaching a deal on its nuclear program.

Here, we believe there is no sign of any cause for concern; Next has traded well through an exceptionally challenging few years. With the Directory driving around half of Next brand operating profits, Next is unusually exposed to e-commerce. The overseas Directory business is expanding strongly and whilst it too is experiencing some of the cost issues that have dogged Asos, it remains a high returning, 18% operating margin operation that has gone from minimal sales to an expected £200m+ this year in what feels like no time at all. We like Next, indeed, of the major UK retailers, we think it beats the rest in terms of its ability to generate long term shareholder value, precisely because that is how the business is run. We are sad to see David Keens go; as the company said, his influence upon the business over 29 years was considerable. But we expect little strategic change in his absence. Lord Wolfson was the youngest CEO of a FTSE 100 company when appointed, so despite his long tenure, he is still relatively young and shows no sign of losing appetite for the job. Currently, Next stands on a mid-teens PE, with consensus expecting earnings growth of mid to high single digits in the next few years, and a dividend yield, including those special payments of around 4% (variable and not guaranteed). We think that is attractive and Next remains a firm favourite UK consumer play.

Under Lord Wolfson and newly retired David Keens, Next became a machine that ground out fashion, profits and share price growth in seemingly equal measures over many years. Uniquely amongst UK retailers, Next spotted that managing their capital was almost as important as managing their business. Having created a retail format that delivered high cash returns on investment (new stores tended to pay back all of their costs to open within a couple of years), and built a Directory that generated trading profits, plus big interest receipts on customer account balances, Next had options that others did not. Quite simply, Next had an embarrassment of riches; the business could not realistically absorb all of the cash flow that it was generating. Wolfson and Keens realised that if the surplus cash flows were used to buy back shares and cancel them, next year the earnings per share would be the product of a (hopefully) higher amount of profit, divided by a smaller number of shares. If the share price broadly followed the earnings per share over time, then buying back stock could lead to faster earnings growth and faster share price growth. The plan worked. Step back to the start of the century and Next had 374m shares in issue, a stock price that averaged 612p and that year declared earnings per share of 38p. Today, the shares are over £70, the company declared earnings of 420p and there are only 155m shares left in issue. Along the way, the plan evolved; if the share price got too high, in terms of the PE ratio, then buy-backs would not enhance earnings enough to justify the expense, so Next started to follow a pick-n’mix strategy, buying back when the price was low, paying special dividends when it was too high. Recently, special dividends have been the norm, if that isn't a contradiction in terms. On Next's current view of the year ahead, buy-backs do not make sense unless the share price dips back toward £68. There has been an unusual outcome with Next; if the price is high, the yield goes up, if special dividends are paid. A lower price leads to buy-backs, which hopefully lead in time to a higher share price, but the yield on the stock drops in the short term, because the special dividends dry up. Either route can deliver value to shareholders. What matters is that the profitability of Next remains robust enough to maintain the excess cash generation to make the capital management strategies possible in the first place. Here, we believe there is no sign of any cause for concern; Next has traded well through an exceptionally challenging few years. With the Directory driving around half of Next brand operating profits, Next is unusually exposed to e-commerce. The overseas Directory business is expanding strongly and whilst it too is experiencing some of the cost issues that have dogged Asos, it remains a high returning, 18% operating margin operation that has gone from minimal sales to an expected £200m+ th

West End landlord Shaftesbury goes shopping for £130 million loan: West End property developer Shaftesbury secured a £130 million loan with Aviva, wiping out a £100 million debt that was due to expire next September.

Premier turnover cut by falling oil price: Premier Hytemp has blamed the falling oil price and closure of its Sheffield operation as turnover dropped by nearly £10 million in its latest financial year.

Outsourcing firms including G4S and Serco get a boost as Osborne removes VAT charges for bidding: G4S and Serco both saw a boost to their share price after the Chancellor removed VAT charges for private contractors when bidding for taxpayer-backed work.

Biggest public sector jobs slump since end of last century - while private sector peaks at record high: The number working in the public sector has hit its lowest level since the end of the last century, official figures showed .

House prices surge near Crossrail stations by up to 82%: Property values around some Crossrail stations have surged since the east-west London line got the green light in 2008, with the fastest-rising jumping 82%, according to a new report.

WANdisco a sell until contracts come through: WANdisco revealed its losses more than doubled last year as the technology company spent heavily to fund expansion. The company said pretax losses had reached $39.4 million (£26 million) in the 12 months to December 31, up from a pretax loss of $19.9 million in 2013. The profitability declined despite revenue increasing to $11.2 million last year, up from $8 million in the previous period. WANdisco has two products – the application lifecycle management (ALM) product, which allows users in different locations to work on the same document or piece of computer code, and the big data product. The ALM business remains the core of the group and sales bookings here were flat on the previous year at $14.6 million. Big data bookings increased rapidly in the final quarter of the year to $2.1 million, bringing the total for 2014 to $2.8 million. The company burnt through $22.6 million in cash last year, leaving $2.5 million at the end of December. The company raised $24.8 million (net of fees) from investors in January and management believe they have enough funds for expansion in the year ahead. Questor downgraded the shares to a Sell in September last year at 335p, and until we see more evidence of new contracts the shares remain far too risky. WANdisco at 311p-44p Questor Says “Avoid”.

Steady as he goes: What Philip Bowman, Smiths Group’s Chief Executive, has to say about quantitative easing is pretty much unprintable, writes Kate Burgess. But then QE has reduced gilt yields and inflated the current value of Smiths’ pension liabilities to a level where they permanently block a break-up of the 164-year-old conglomerate. When Mr Bowman hands over the keys to his office this year and heads to Sussex to tend his bees, investors are unlikely to line the route. But they shouldn’t be too ungracious. Running an outfit like Smiths is Sisyphean: overall, half year earnings (down 3%) were in line with expectations but the mix was different. The medical division did better than hoped, airport scanners and telecoms components did worse. “Lower volatility — that is the strength of conglomerates,” says Mr Bowman manfully. He has tackled what he can — costs, margins and now expansion into China. But oil prices, forex, government spending and of course, QE, remain outside management’s reach. And it will be 30 years before Smiths is clear of its promises to 60,000 pensioners and employees.

Sky raises prices after Premier League auction: Sky has made an unseasonal increase to the price of its television packages — just five weeks after agreeing to pay £4.2 billion for Premier League football rights

Bid for TSB leaves shorters seeking cover: Hedge funds that bet against shares rising in TSB have slashed their positions in the challenger bank spun out of Lloyds, after a surprise £1.7 billion bid from one of Spain’s largest financial groups.