Record full-year revenue took Somero (SOM) within striking distance of its $90m (£65m) sales target. The concrete levelling specialist’s adjusted cash profit also reached a new high, rising 14 per cent to $28m. In somewhat of a hat-trick, operating cash flow simultaneously rose to an unprecedented $19.8m from $17m year on year. Topping off an excellent set of results, Somero has updated its dividend policy: management now targets a year-end net cash balance of $15m, whereby 50 per cent of any surplus cash will be distributed to investors – for 2017, this meant a special dividend of 3.6¢ a share.
The proportion of non-US revenue rose to 32 per cent, reflecting an increasingly diversified top line. Europe was the star performer with eye-catching growth of 53 per cent to $12.2m. Management says the company's European equipment fleet is relatively old, so technological upgrades could breed new opportunities.
Sales in China fell 14 per cent to $5.5m, largely driven by a sluggish first half. Somero still sees a strong opportunity to expand its market presence here, albeit over a longer timeframe. Middle Eastern sales fell 28 per cent to $2.1m, although activity levels were maintained.
Analysts at FinnCap forecast adjusted pre-tax profit of $27.7m and EPS of 37.7¢ for 2018, up from $26.2m and 36.5¢ in 2017.
| SOMERO (SOM) | ||||
| ORD PRICE: | 370p | MARKET VALUE: | £208m | |
| TOUCH: | 365-375p | 12-MONTH HIGH: | 380p | LOW: 252p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 85.4¢ | NET CASH: | $19m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2013 | 45.1 | 6.5 | 10.0 | 2.2 |
| 2014 | 59.3 | 12.4 | 26.0 | 2.5 |
| 2015 | 70.2 | 17.4 | 21.0 | 6.9 |
| 2016 | 79.4 | 21.3 | 25.0 | 11.1 |
| 2017* | 85.6 | 25.7 | 33.0 | 15.5 |
| % change | +8 | +21 | +32 | +40 |
| Ex-div: | 29 Mar | |||
| Payment: | 20 Apr | |||
*Excludes special dividends of 13.3¢ and 3.6¢ announced in June 2017 and March 2018 respectively £1=$1.40 | ||||
