Somero (SOM), the provider of high-tech concrete-levelling equipment and services, saw higher revenue in the first half driven by strong performances from Europe and Latin America. Heavy rains meant projects in North America were delayed: sales there declined by 5 per cent to $28.4m (£21.5m). But at the group level, adjusted cash profit rose 9 per cent to $13.2m on a slightly firmer margin. And management is confident about achieving full-year results in line with market expectations.
Despite North America’s weather, management noted the strong trading seen in June, July and August as it improved. Outside of the US, Emea and China, the rest of Somero's global territories achieved sales growth of 79 per cent to $3.4m: South Korea and Scandinavia were the star performers here.
Meanwhile, China’s turnover contribution fell to $2.7m, down 29 per cent, although the period ended well, as Somero registered its strongest monthly trading there in June. But, management is not satisfied with the performance and is “re-looking at China completely” via a strategic review. With its construction boom ongoing, the People's Republic is estimated to use half of the world’s total concrete, and therefore represents a big opportunity for the company.
New products contributed $1.4m to Somero’s top line, including the S-158C in China – an entry-level 'small line' concrete pumping machine – the “next generation 3-D profiler system” and the SP-16 line pulling and placing system.
Analysts at broker finnCap forecast adjusted pre-tax profit of $24m and adjusted EPS of 27.4¢ for FY2017, up from $22m and 26.2¢ in 2016.
| SOMERO (SOM) | ||||
| ORD PRICE: | 295p | MARKET VALUE: | £166m | |
| TOUCH: | 290-299p | 12-MONTH HIGH: | 327p | LOW: 161p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 72.7¢* | NET CASH: | $18.3m | |
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