It was always going to be a close-run thing, but I’m sure none of us imagined that withdrawal from the European Union would be this chaotic so close to the exit date of Friday, March 29.
As the week has evolved, the chances of the UK falling off the cliff edge and embarking on a destructive ‘no deal’ Brexit have been steadily growing. Rather than stamping on the reverse pedal, though, Downing Street has doubled-down on its high-risk game of bluff with Parliament that could see the country exit the European club without an agreement.
Theresa May’s aggressive pitch to the nation last night was intended to concentrate MPs’ minds on passing her Withdrawal Agreement on the third time of asking. Her tactic of pitting the public against Parliament, though, appears to have spectacularly backfired and undermined her chances of getting her plan through the Commons — should it even be allowed to be debated by speaker John Bercow — thus increasing the chances of a ‘no deal’ conclusion to this turbulent political saga.
International colossus
There’s clearly a lot for investors to worry about right now, and if you’re one of those concerned over the unfolding Brexit saga then you might want to give SThree (LSE: STHR) a close look today.
It’s not that the recruitment giant would be immune to the possible troubles created by a disorderly withdrawal. However, given that the business generates just 15% of group gross profits from these shores it’s in a better shape than many to ride out any potential economic turbulence in the near term and beyond.
In fact, I would argue that the rate at which SThree is making progress abroad should encourage investors to believe that it can deliver stupendous profits growth, irrespective of how Brexit pans out. In the three months to February, profits from Continental Europe, responsible for almost six-tenths of the group total, jumped 12%. And in its second-largest market of the US, these climbed 17% year-on-year.
It’s no shock that City analysts expect chunky profits growth at the small-cap through to the end of fiscal 2021, then, and for dividends to keep rising as well. Thus SThree carries jumbo yields of 5.5% and 5.5% for this year and next respectively.
More meaty dividends
Sausage casing maker Devro (LSE: DVO) is another great income pick for those fearful about the future of the UK economy.
Why? Well thanks to the impact of its Devro 100 restructuring plan, sales of its edible products are surging in hot growth markets and should continue to do so as new products like its Fine Ultra hit the market. Volumes in North American and Latin America grew 8% and 9% respectively in 2018, for example, while in South-East Asia these rose 6%, and in China 5% (excluding legacy products).
And there’s plenty of opportunity for Devro to keep growing sales as wealth and population numbers rise on a global level. This is why City analysts predict sustained earnings expansion over the next couple of years at least here, and that the company will also keep growing dividends. Consequently yields sit at an impressive 4.7% for this year and 4.9% for 2020.
