Somero Enterprises Inc. Trading Update (1952N)
January 16 2019 - 1:00AM
UK Regulatory
TIDMSOM
RNS Number : 1952N
Somero Enterprises Inc.
16 January 2019
16 January 2019
Somero Enterprises, Inc.
("Somero" or the "Company")
Trading Update
Strong growth drives revenue, EBITDA and cash ahead of
expectations
Expected to beat five-year revenue target established in
2014
Somero(R) provides the following update on trading for the
financial year ended 31 December 2018.
Trading Update
The Board is pleased to report that the Company delivered
strong, profitable growth and healthy cash generation in the six
months since 30 June 2018. As a result of the strong H2
performance, the Board now expects 2018 revenues will be moderately
ahead of market expectations and the Company's previously stated
5-Year Plan objective of $90.0m, while EBITDA will also be
moderately ahead of market expectations of $29.0m driven by the
volume increase and effective management of operating costs. In
addition, the Board expects net cash at 31 December 2018 will be
more significantly ahead of market expectations of $25.0m. As such,
the Board intends to maintain the Company's dividend policy,
announced on 14 March 2018, consisting of a regular dividend
payment equal to 50% of adjusted net income for the calendar year
and a supplemental dividend equal to 50% of excess net cash over
the year-end target of $15.0m.
The Company continues to make good progress in executing its
product innovation growth strategy highlighted by the introduction
of the new SkyScreed(c) 25, a new, innovative product targeting the
structural high-rise market segment. The SkyScreed(c) 25 will be
officially launched at the annual World of Concrete trade show in
Las Vegas, Nevada in late January 2019. In addition, new products
were a meaningful contributor to the strong performance for the
year, with the S-22EZ, launched in late 2017, contributing $2.2M to
2018 revenue growth.
On a full-year geographic basis, three of the Company's six
regions grew compared to 2017 led by strong performance in the
North American and the Rest of World territories along with a
positive contribution from the Middle East. In the Company's other
territories, Europe and China were slightly down from 2017, while
in Latin America 2018 trading fell below 2017 levels, though H2
2018 trading in this market improved from the first half of the
year.
In North America, the particularly strong H2 2018 trading
reflects the strong pipeline of construction projects that remain
in front of our US customer base. The growth in the Rest of World
territories was led by a significant contribution from Australia
along with positive contributions from Scandinavia and India. In
the Middle East, activity levels were solid throughout the year
leading to the increase compared to 2017. In Europe, while 2018
trading ended slightly below 2017 levels, the Company saw healthy
demand for new products and technology upgrades, in addition to
opportunities to refresh the installed base of equipment. In China,
the Company is pleased with its efforts to refine its strategy to
target the quality market segment, although these efforts have yet
to gain full traction. In Latin America, as previously indicated,
trading improved in H2 2018 compared to H2 2017 and the Company is
encouraged by the addition of future project opportunities seen in
this market. Most important of all, the Company is pleased with the
activity levels and opportunities for growth seen across all its
markets.
On a product basis, growth in H2 2018 trading was very balanced
with sales in all product categories increasing compared to H2
2017, led by particularly strong performance in the Ride-on screed
category.
Outlook
Following record results in 2018, the Board is confident in the
Company's ability to deliver another year of profitable growth in
2019. The underlying market conditions in our North American and
European markets remain buoyant, and the Board sees meaningful
growth opportunities in China and our other territories, alongside
growth opportunities from new products.
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
Enquiries:
Somero Enterprises, Inc. www.somero.com
Jack Cooney, CEO +1 239 210 6500
John Yuncza, CFO
Howard Hohmann, EVP Sales
finnCap Ltd (NOMAD and Broker)
Matt Goode (Corporate Finance) +44 (0)20 7220 0500
Carl Holmes (Corporate Finance)
Tim Redfern (Corporate Broking)
Alma PR (Financial PR Advisor) somero@almapr.co.uk
Rebecca Sanders-Hewett +44 (0) 2034 050 205
Susie Hudson
Sam Modlin
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END
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