Good morning!

Sorry there was no report yesterday - I've been in bed for the last 36 hours, with a high temperature. There seem to be a lot of lurgy around at the moment. Anyway, thought I'd better drag myself out of my pit so as not to miss the email deadline of 1pm two days on the trot.


Somero Enterprises Inc (LON:SOM)

Share price: 148p (up 10% today)
No. shares: 56.1m
Market cap: £83.0m

(at the time of writing, I hold a long position in this share)

Results y/e 31 Dec 2015 - this company is the global market leader for laser-guided concrete screeding machines. There was a lot of useful information in my interview with the CEO on 20 Jan 2016, here.

Good results were expected, as the company has issued several upbeat trading statements, including this one on 7 Jan 2016, indicating that EBITDA would be "materially ahead" of market expectations, following a strong Q4.

These numbers look terrific, a few highlights & comments;

Revenue rose 18% to $70.2m - note that sales in the US did the heavy lifting, with sales to RoW actually falling:


56d58d2169ff5SOM_sales.PNG

A friend emailed me this morning about Somero's results, saying, "Forget China, this is a simple all out play on the US economy – yee haw!" He's hit the nail on the head. With US sales now representing 70% of the total, and growing the most in absolute terms (although EMEA grew more in percentage terms, from a low base), then it's the state of the US economy which matters most.

Somero management told me that the US economy was strong, in our interview, and today's commentary from the company reiterates this;

Healthy trading momentum in the US has carried forward into 2016 from the strong finish to 2015.  The momentum is driven by demand for replacement equipment, fleet additions, technology upgrades and new products.  The underlying non-residential construction market fundamentals in the US remain strong, evidenced by lengthy project backlogs for our customers that extend well into 2016.  This gives us confidence in our growth prospects for 2016.

I'm somewhat confused, as we seem to be getting highly contradictory signals about what's going on in the US economy. Manufacturing is apparently in recession, yet Somero are reporting boom-like conditions in their sector - which is primarily related to the…

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