City relief as EU gives no-deal green light for clearing houses. Europe stepped up preparations for a no-deal Brexit on Monday after giving key parts of the City of London temporary access to EU customers in the event of a cliff-edge departure. The European Securities and Markets Authority, the EU financial regulator, has granted three UK-based clearing houses — LCH, ICE Clear Europe and LME Clear — licences to carry on doing business with European-based customers over the next 12 months even if politicians fail to strike an agreement. London dominates clearing for derivatives traded by European customers and clears nearly all over-the-counter derivatives, mainly interest-rates swaps, traded in euros. Clearing houses are a vital part of the financial infrastructure and ensure stability by acting as the buyer or seller of last resort in the event of a customer default.
Shoe Zone should be shoe-in for dividend hunting investors. This is not the glamorous end of the shoes market — no £500 Louboutins in sight. But Shoe Zone (SHOE) is fast becoming a solid little earner for small-cap investors, providing a reliable dividend and strong earnings. At its results last October it recorded a profit of £11.3 million, an 18.4% increase on the £9.5 million recorded the year before. Investors will be hoping it can do the same again for the year ahead as 60% of profits are paid out in dividends. The firm also has a strong debt-free balance sheet which could appeal to a predator. But the real key to its success is its ability to control its rents. Shoe Zone’s average lease length is just two years, meaning it has frequent chances to renew. The question is whether the firm will continue to grow. It is also focused on developing its website. Last year online revenues contributed £9.8 million to overall sales, a marked 19.9% increase on the previous year. Nevertheless, analysts have warned that customers still prefer to buy shoes in store. Still, while the high street crumbles, Shoe Zone shows that with sensible pricing and a low cost base any firm can still compete.
Reckitt Benckiser brushes off Brexit in £105m UK research centre spend. The boss of Reckitt Benckiser Group (RB.) on Monday cheered sales growth and signalled that the consumer goods giant has no regrets about opening a new £105 million UK research centre in post-Brexit Britain. Rakesh Kapoor made the comments as Reckitt Benckiser, which is behind the Durex, Dettol and Nurofen brands, posted a 10% jump in full-year revenues to £12.6 billion. The FTSE 100 firm first unveiled plans to invest in a science and innovation centre in Hull in 2014. It has had a presence in the Yorkshire city since 1840.
