Not only is the business heavily exposed to the US market - the region accounted for 75 per cent of Somero's revenue of $29.8m (£23.7m) in the first half of this year - but trading activity is being buoyed by a combination of new product launches and a healthy non-residential construction market, both of which are supporting demand for replacement equipment, technology upgrades and fleet additions. Somero's sales in North America shot up by 35 per cent in the six months to the end of June 2016 and there is no sign of momentum waning given the company's healthy order backlog. For good measure Europe, China and Australia, which account for around a fifth of Somero's sales, all posted double-digit growth, too.
But it's the prospect of a major fiscal boost, and ramp-up in infrastructure spending by the newly elected Republican administration, that's likely to attract further investor interest, and with good reason. That's because the company is bang on course to deliver a 15 per cent increase in full-year adjusted pre-tax profit to $20.3m on revenue up 9 per cent to $76.5m in the 12 months to the end of December 2016, as analyst David Buxton at broker finnCap predicts. Cash generation is very healthy, and so is the state of the company's balance sheet, so much so that Mr Buxton anticipates a 20 per cent hike in year-end net funds to $15.2m, a sum worth almost 22p a share at current exchange rates. This means that Somero's shares are rated on 9,.5 times cash-adjusted post tax earnings estimates for 2016, hardly an exacting valuation for a company that's predicted to grow EPS by over 8 per cent to 24.6¢ (19.5p at current exchange rates) in 2017 based on a reasonable 6 per cent increase in revenue.