REG - Somero Enterprises - Trading Update

Somero EnterprisesAnnouncement

30/07/2024 07:00

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RNS Number : 2695Y  Somero Enterprises Inc.  30 July 2024

30 July 2024

Somero Enterprises, Inc.

("Somero" or "the Company")

 

Trading Update

Somero® is pleased to provide an update on trading ahead of its interim
results announcement scheduled to be released on Thursday, 29 August 2024.

While the broad US non-residential construction market remains healthy,
supported by an active manufacturing sector, onshoring, and electric vehicle
and battery plants, trading in North America continues to be impeded by
project start delays and pauses caused by elevated interest rates, labor
shortages and concrete rationing, as previously reported in the 20 June 2023
announcement. This has been coupled with significant inclement weather in H1
2024.  As a result, H1 2024 trading in North America is expected to end below
the comparable H1 2023 period.

 

The European market was active during H1 2024, reflective of positive
non-residential construction market conditions and a busy customer base with
healthy project backlogs.  As a result, H1 2024 trading in Europe was
comparable to H1 2023.  Australia also experienced inclement weather that
caused project delays resulting in H1 2024 trading down compared to a record
performance in H1 2023.  Trading in the Rest of World region declined
compared to H1 2023, driven primarily by lower sales volume in the Middle East
and Latin America.  As previously stated, given the relatively small base of
business in each region within this category, trading will fluctuate from
period to period.

 

The Company anticipates an improvement in H2 2024 over H1 2024 driven by a
combination of new product revenue growth, including the launch of a third new
machine, and an expectation of improved weather conditions.  Due to the
anticipated reduction in 2024 revenue compared to previous expectations and
consistent with Somero's agile operating model, the Company has initiated a
company-wide workforce reduction of approximately 15%, a restructuring that
takes effect alongside this trading update. The workforce reduction combined
with a reduction in variable expenses tied to revenue and strict cost controls
for the remainder of 2024 partly offset the profitability impact of the
revised 2024 revenue expectations.

 

In consideration of the aforementioned factors, the Company now expects FY
2024 revenues of approximately US$ 110.0m (compared to the previous market
consensus estimate of US$ 120.7m), EBITDA of approximately US$ 30.0m (compared
to the previous market consensus estimate of US$ 34.0m), and year-end cash of
approximately US$ 27.0m (compared to the previous market consensus estimate of
US$ 31.7m).

 

Jack Cooney, President & CEO of Somero, said:

 

"Despite the impact of persistent challenges and poor weather conditions on
trading in the first half, the non-residential construction market remains
fundamentally sound.  Importantly, the long-term growth drivers remain intact
and we are working hard to expand our product offering and build our presence
internationally to capitalize.  As those factors outside our control abate,
we would expect performance to improve.  In the meantime, Somero is built to
withstand challenging conditions.  We have a solid track record of adapting
to changing conditions and then emerging strongly."

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 as retained as part of UK law by virtue of
the European Union (Withdrawal) Act 2018 as amended. Upon the publication of
this Announcement, this inside information is now considered to be in the
public domain.

 

 For further information, please contact:

Somero Enterprises,                                                                                                                                    www.somero.com (http://www.somero.com)
 Inc.
 Jack Cooney, President & CEO                                                                                                                           +1 239 210 6500
 Vincenzo LiCausi, CFO
 Howard Hohmann, EVP Sales

 Cavendish Capital Markets Ltd (NOMAD and Broker)                                                                                                       +44 (0)20 7220 0500
 Matt Goode/Seamus Fricker (Corporate Finance)
 Tim Redfern/Harriet Ward (ECM)

 Alma (Financial Communications Advisor)                                                                                                                somero@almastrategic.com
 David Ison                                                                                                                                             +44 (0)20 3405 0205
 Rebecca Sanders-Hewett
 Will Merison

 

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