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Paul’s Section:

Somero Enterprises (LON:SOM)

385p (down 3%)

Market cap £215m

Final Results

Somero sells & supports laser-guided concrete screeding machines, to lay perfectly flat floors, for use mainly in warehouses.

Finncap says these results are in line with expectations.

Revenue of $133.6m - matching the outstanding performance of the prior year.

Profit before tax fell to $40.8m, down 9%, due to higher overheads (already known) - note the very high profit margin.

Adj diluted EPS $0.55 (down from $0.61 prior year) - converts into sterling at £1 = $1.183 to 46.5p = PER of only 8.3x which looks strikingly cheap to me, for a high quality business generating a high profit margin, and copious cashflows.

Dividends - are generous, with the ordinary divi $0.2778, and a supplemental divi of $0.077. The StockReport is showing a forecast yield of 7.4%, which is clearly very attractive.

Buybacks have also been done, reducing the share count slightly.

Outlook - there’s more detail, but this is the key part -

…With all factors considered, 2023 revenues are expected to be comparable with 2022, and with targeted added resources 2023 EBITDA is expected to be down modestly from 2022, and with 2023 working capital investment expected to remain…

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