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Dignity returns £54 million in cash: Dignity is planning to make a surprise return of cash to investors as the listed funeral company carries out a major refinancing. The company said it will return around £54 million in cash to shareholders, or £1 per share, only 13 months after its last sweetener to investors. Dignity is looking to raise about £580 million by issuing new corporate debt and with the cash raised it will repay the existing £406 million in debts and return the rest of the cash to investors, less around £15 million in fees. However, there will be a one-off accounting charge in this year’s results of around £110 million related to the transaction. The company uses funds from debt to grow through acquisition. The majority of funeral parlours in the U.K. are still independently owned businesses. The company added 54 new funeral locations last year, once branch closures had been subtracted, and has delivered steady growth for the past decade. Since the company floated in 2004, revenue growth has been 7.3% a year, and earnings per share have increased by 16% a year. Britain has experienced a stable death rate of between 540,000 and 600,000 each year for more than half a century. Management at Dignity is predicting it will be at the lower end of that range, at about 543,000, this year. Questor thinks this company is well worth watching and buying if we get a market correction in the future, but at this price it is looking a bit too rich. Hold. Questor thinks this company is well worth watching and buying if we get a market correction in the future, but at this price it is looking a bit too rich. Dignity at £14.55+23p Questor Says ‘Hold’.

Pushing the envelope: The objects of its suspicions are Sherborne, an activist with a 20% stake, and Aviva and Fidelity, investors deemed sympathetic to it. A “concert party” is a group of investors seeking or exerting control over a company. Such clubs are permitted. But they should be disclosed. Ed Bramson, the mercurial Sherborne Boss, has requisitioned a vote that could boost him and a sidekick on to the board of the trust. He believes Electra, which invests in private equity, could be run better. He has a fan base impressed by some of his turnrounds. There is no evidence to show this is a concert party. Electra is not a basket case. But it has enough weaknesses to feel sensitive, particularly with Mr Bramson highlighting them. They include raising a sum of £150 million in 2009 and 2010 that it was slow to invest, a lack of dividends and steep charges from buyout Manager Electra Partners. The criticism of Mr Bramson when he seized the Chairmanship of Foreign & Colonial was that he lacked a plan. This time he has a reasonable one. He would turn Electra into a smaller version of Melrose, a trader in companies paying regular dividends. Investors should give him a thorough hearing, despite Electra’s finger-wagging.

Exhibitionist unmasked: Tim Cobbold, Chief Executive since May, is presenting a different sort of show from his predecessor. David Levin looked to bolt-on deals – if one leaves aside the attempted merger with Informa – to expand UBM. But Mr Cobbold’s putative acquisition would be the group’s largest deal this century. But with UBM coming up against the limits of net debt to underlying earnings, finding the $900 million that Advanstar may fetch is tricky. Even the sale of PR Newswire – a favourite topic for analysts – would not be enough by itself. And if that sale didn’t happen, analysts reckon that the necessary rights issue could total up to 37% of the group’s £1.5 billion market value. Mr Cobbold has his work cut out to convince shareholders his show is better as well as bigger.

Tax changes hit wealthy foreign homebuyers: A little-noticed tax change has levied another blow on foreign buyers of luxury London homes, adding to the slowdown in the previously booming sector.

The US Federal Reserve issued an enforcement action against Banco Santander’s US subsidiary for paying a dividend without permission. The action, by the Federal Reserve Bank of Boston against Santander Holdings USA is a sign of the increasingly tough approach from US regulators towards the US subsidiaries of foreign banks. (Financial Times)

House Prices Are Rising At 20 Times Wages By Motley Fool | Thu, 18th September 2014 - 17:38 We're so used to frantic house price growth that we've come to see it as normal. So when the Office for National Statistics (ONS) published figures this week showing UK house prices rose 11.7% in the last year, nobody blinked. Crazy growth in London of 19.1% was similarly shrugged off. That's just how London rolls these days. On the same day, the ONS published the latest CPI inflation figure, which showed a slight dip to 1.5%. I expected screaming headlines pointing out that house prices are now rising at eight times inflation, or almost 13 times in London. Nobody seems to have noticed. Wage Slaves Here's an even more astonishing figure. The ONS also published annual wage growth figures which showed that pay, including bonuses, rose a meagre 0.6% over the last year. This means UK house prices are rising a mind-boggling 20 times faster than wages. In London, the figure is almost 32 times faster. This can only end one way. 20 Reasons Why House Prices Will Crash Even more amazingly, most commentators in the property and mortgage industry actually welcomed the house price growth figures, claiming they were the sign of a healthy market. I beg to differ. It is the sign of an insane market. House prices simply can't keep rising at 20 times wages. Crazy Days There is more growth to come. Estate agents and mortgage brokers are now gearing up for a hectic autumn, and they're in a confident mood. Lenders have embarked on yet another mortgage price war, as they battle to hit their lending targets before the end of the calendar year. The property industry can smell blood, or rather money, and they're not going to stop now. Never Ending Mortgage Worse, neither are buyers. Instead of saying no to insane house prices, first-time buyers are stretching their repayment terms to as long as 35 or even 40 years, rather than the traditional 25-year term. More than one in 10 existing homeowners are doing the same, according to figures from the Council of Mortgage Lenders. Yes, this can cut your monthly repayments, but there is a price to pay. If you took out a £150,000 repayment mortgage at 3.5% over 25 years, you would pay total interest of £75,282. Over 40 years, your total interest bill would be £128,923. That's £53,641 more. Mortgage Madness As Herbert Stein's law says: "If something cannot go on forever, it will stop." The only question is when. In April, the Financial Conduct Authority launched a regulatory overhaul called the Mortgage Market Review, designed to take some of the heat out of the housing market. That calmed lenders... for about a fortnight. Bank of England measures to cut maximum loan-to-income ratios don't appear to have slowed the beast at all. If interest rates start rising next year, as most people assume, maybe

Based on my conversation with the CEO at Proactive Investor evening on 11th September; we are still due at least one new contract announcement which he suggested was imminent. The rumour in the City is in fact 2 contracts are likely to be announced in the coming weeks. We shall see-:) ATB

Thursday’s independence referendum is Scotland’s “day of destiny”, claims The Scotsman. After two and a half years of campaigning, Scotland has to decide whether it will remain part of the union or whether it’ll become independent and over 4.2m people, the 97% of the potential electorate, are expected to vote between 7am and 10pm. Most polls have the ‘no’ campaign marginally ahead at 52% to 48%, but the newspaper states the race is too close to call. An independent Scotland could face “decades of economic decline”, reports The Daily Telegraph, citing the results of a poll conducted among leading institutional investors. Some 63% of the more than 200 fund managers in Britain surveyed by Capital Spreads believe that Scotland’s economy is likely to be weaker for at least a decade if the country chooses independence, while only 3% believe Scotland would a stronger economy 12 months after secession. Instead investors believe that, in case of the independence, it would be Britain rather than Scotland who would benefit from the split, with 58% of respondents claiming that the UK economy without Scotland would be stronger over the next decade. The Bank of England (BoE) will have to be on “alert for Northern Rock style deposit flight if ‘yes’ wins,” The Independent reports. Sir John Gieve, former deputy governor for financial stability at the BoE, said Bank officials must be ready to calm markets is Scotland chooses independence. “There’s bound to be some uncertainty, some possibility of deposit flight, some further marking down of the pound and the UK generally,” Gieve said.

Central London completions to hit 10,000 next year, says JLL: Housing completions in central London could reach 10,000 in 2015 for the first time in years thanks to a surge in construction activity, even as new housing starts and prices at the centre of the capital start to slow.

Drinks giant Diageo facing shareholder revolt over ‘excessive’ rewards: Smirnoff’s maker Diageo is facing a shareholder revolt at its annual meeting as investors express displeasure at ‘excessive’ rewards in the wake of disappointing performance.

Scandinavia is the right way for us, says Marks & Spencer as retailer steps up international expansion: Marks & Spencer is to step up its international expansion by opening in Scandinavia for the first time. Britain’s biggest clothing retailer plans 15 new franchise shops in Finland and Norway with a four-storey flagship in Helsinki.

Questor protects investors capital: Online retailer ASOS issued its third profit warning within seven months sending shares more than 8% lower. The shares are now worth less than half what they were at the start of the year and Questor still believes they could have further to fall. ASOS said it now doesn’t expect a recovery in profits next year either and guided towards around £45 million, well short of previous expectations of £62 million. With the profits static at £45 million and earnings per share flat at 40.2p, that leaves the shares at £22.14 looking terribly exposed on 60 times forecast earnings. The real problem area is the economic slowdown in Australia. Nick Robertson, Chief Executive, said he is having to cut prices in Australia, one of his most profitable markets. The business contributes the “lion’s share” of sales from the rest of the world division. This division reported a 5% fall in sales for the three months to August, down from 14% growth in the first half. The division contributes about a quarter of the group’s total sales and profits. The U.K. remains the largest single division, contributing about 40% of group revenue and a third of group gross profits. Here sales increased by 33% but this performance is being dragged down by Australia and flat sales in the U.S. In Europe sales growth slowed to 21%, from 44% in the previous quarter. Long-term investors have certainly benefited from the fantastic growth at ASOS since it first raised £2.8 million on Aim in 2001. The company has been a great success and shares have soared since then. However, Questor retains its negative view at these prices and, given the outlook for retailers, the shares remain a sell. ASOS at £22.07-215p Questor Says “Sell”.

TalkTalk pledges to pass on any price cuts in BT’s broadband: TalkTalk has pledged to cut the price of fibre broadband for customers should regulatory proposals over access to BT’s network force the former telecoms incumbent to lower the wholesale cost.

North Sea oil ‘running out faster than feared’: One of Britain’s leading energy consultancies has blown a hole in the Yes campaign’s budget forecasts for an independent Scotland, warning that North Sea oil is running out more quickly than had been thought.

Housing boom is nationwide: House prices boomed at record rates across the U.K. in the year to July, according to official data released, despite separate and more recent figures showing growth rates levelling off.

Choc market warning in Thorntons slide: Shares in Thorntons are sending out a warning to investors of a crippling global slowdown. U.K. investors need to take action and review their holdings. Thorntons shares have fallen 10% during the past five days despite the chocolate maker saying it is on target to hit targets of growing profits and sales this year. That brings the fall in Thornton’s share price to around 25% in 2014. It is not so much a market crash, as signs of extreme fatigue, almost as though someone has pulled the plug on the bull market that is now well over five years old. To some extent the fall in Thornton’s shares can be explained by profit taking. The shares have soared from lows of around 12p in 2012. That said, there is a worrying absence to the other side of the market, namely buyers who believe the recovery has longer to run. It all seems a long way from a box of chocolates at the train station kiosk, but s global economy is interconnected, and for the past five years it has been pulled along by China growth and easy money. There are plenty of signs both are running out of steam. The early signs of this slowdown are only being shown in the most risky and volatile parts of the market. Smaller listed companies and higher risk tech investments are really the canaries in the mine. The FTSE 100 is still gleefully hovering near record highs. This is a painful exit but Questor reduces Thorntons shares to a sell. It is always best to cut losses quickly when the investment case and economic backdrop changes. More importantly, Questor thinks investors should review their portfolio, take gains elsewhere and batten down the hatches with some extra cash. Thorntons at 95¼p-1¾p Questor Says ‘Sell’.

Greggs shares hit record high: Britains’s biggest high street purveyor of sausage rolls and pasties, Greggs has said it expects profits “materially ahead of expectations” after reporting accelerating sales. The update has led to a round of broker upgrades, sending shares more than 12% higher. The bakery chain, with roots in the north of England, said growth was accelerating, with like-for-like sales up by 5.4% in the 11 weeks to September 13, up from the 3.2% like-for-like sales growth during the first half of the year ended June 28. At the same time as sales are accelerating, profitability is improving. Management said the prices for raw ingredients were falling and “excellent” cost control was taking effect. Management expects profit margins to improve in the second half of the year and added that it expects raw material prices to remain lower near term. The improved profitability is a decent management turnaround from the performance last year when Greggs full year pretax profits slumped by 36% to £33.2 million, from £52.4 million the previous year. As part of the turnaround Greggs is sprucing up its stores and said it had completed 153 refits by September 13, with 200 planned by the end of the year. Underperforming stores are also being removed, with 43 closures so far this year against 32 new shops opened. Greggs shares are now trading on 15.3 times earnings and offer a prospective dividend yield of 3.7%. However, they are trading at record highs following the 10-for-one stock split in 2009. Given the fragile nature of the consumer recovery we are seeing in the U.K., Questor is reluctant to buy at these levels. Greggs at 602p+66p Questor Says ‘Hold’.

Binary beanie baby: Crash helmets and flameproof overalls would be better outfits for investors in Asos than the beanies and skater tees sold by the online fashion business. The shares fell 11.5% on Tuesday morning to £22.07, almost 70% below their February peak, after Asos warned 2015 profits would be no better than this year’s. Asos has been overvalued by the conventional benchmark of share price to forward earnings. It remains so at 52 times, on a Numis forecast of £44.3 million in pretax profits in 2014. But this is a binary stock. Either Asos will become an international behemoth, or not. Other travails have been the result of bad luck or bad planning. The first was represented by a warehouse fire. The second is epitomised by an IT system that, incredibly, given Asos’s aspirations, does not allow the Aim-quoted group to smooth out forex gyrations with regional pricing. Lombard, conventional down to his pinstripe suit and holey socks, sees Asos as a decent business at too high a price. Attrition from me-too competitors will fray its international advance. But investors clad in the robes of the true believer (kimonos, anyone?) should give irrepressible Founder Nick Robertson more credit for foresight.

AstraZeneca swallows bittersweet pill with Eli Lilly Alzheimer’s deal: The paradox is embodied in the unpopularity of neuroscience among big drug companies, such as AstraZeneca. The U.K. group has just struck a deal with Eli Lilly to share the risks of developing AZD3293, a treatment for Alzheimer’s disease. Sweet, because the $500 million tie-up with Lilly means AZD3293 has a greater chance of success. Any development that increases the odds against you or I getting dementia is welcome. They are currently around 5:1, the same as for Russian Roulette. The costs imposed by citizens who run out of luck is some £26 billion annually in the U.K., according to the Alzheimer’s Society. An Oxford study on the cost of cancer produced a figure of £15 billion. In 2011 Oxford academics identified public and charitable spending of £600 million a year on cancer research and just £50 million on dementia. Drugs companies shout loud enough about their social mission to persevere in research areas where failure rates are high, such as dementia. However their chances of success would be improved if governments spent more on fundamental research. This is the fountainhead from which drug pipelines are replenished. At present, the tap is only half on.

Crest Nicholson warns of skills shortage in the building industry: Crest Nicholson has warned the body responsible for training in construction that it needs to do more to encourage builders back into the industry as the sector faces up to a crippling skills shortage.