Good morning!

Plenty of interesting little updates today.

I shall work through this list:

There have also been requests for me to cover some of the asset management companies which had trading updates this week. Duly noted!

Regards,

Graham



Somero Enterprises Inc (LON:SOM)

  • Share price: 370p (+8%)
  • No. of shares: 56 million
  • Market cap: £208 million

Trading Update

This is a US-based provider of concrete "screeding" machines - they allow for new concrete floors to be made perfectly flat.

We've covered this stock plenty of times here before. It's one of the few quality overseas stocks on AIM!

Today's update let us know that the company continues to perform well, and was ahead of expectations in H2.

As a result of the strong H2 performance, the Board now expects 2017 revenues will be slightly ahead of market expectations of $84.7m, EBITDA will be comfortably ahead of market expectations of $26.0m driven by the volume increase and effective operating cost management, while net cash at 31 December 2017 is expected to be not less than $18.5m, well ahead of market expectations of $16.5m.

It's helpful that the market expectations are given, so we don't have to guess what they are!

Most of the new revenue comes from geographic expansion, rather than from new products.

The company has many excellent characteristics, not the least of which is the apparent lack of competition in manufacturing these niche products.

The only criticism I've seen fit to make is that it hasn't made new product development a slightly bigger priority. It typically spends 2% of sales on product development, and introduces at least one new product per year. Could it be a little bit more ambitious than this, perhaps? Only $1 million of 2017's revenue growth has come from new products.

One of the benefits of being careful with its development spending is that the cash pile keeps growing. And the company has been quite generous in paying out surplus cash to shareholders in the past. However, it sounds like…

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