REG - Somero Enterprises - COVID-19 Update

Somero EnterprisesAnnouncement

30/03/2020 07:01

RNS Number : 9499H
  
Somero Enterprises Inc.
  
30 March 2020
  
 

30 March 2020
Somero Enterprises, Inc.
("Somero" or the "Company")
 
COVID-19 Update
Somero Enterprises, Inc. (the "Company") provides the following update regarding in respect of the COVID-19 pandemic.  
Trading update
On 11 March 2020 we reported accelerated trading in the US due to improvement weather conditions led to a strong end to 2019 and a positive start to 2020.  We also noted in our 2019 results statement, that while the outbreak of the COVID-19 pandemic led to a brief stoppage in activity in China, we had yet to see a direct impact of the COVID-19 pandemic on customer projects outside of China.  
Since that update and the rapid movement of government guidance in that time across different regions, we have seen a dramatic increase in pressure on our non-China markets with lockdowns implemented in a rapidly increasing number of geographies including across portions of the US. This is impacting not only customer projects but also the manner in which we conduct our operations. 
Given the evolving nature of the COVID-19 pandemic, it is too early at this stage to provide earnings guidance in relation to the remainder of the current financial year, although we do consider it likely there will be a material impact.  We are therefore withdrawing guidance for the full year.
Response to COVID-19
 
Health and safety
Our priority remains the health and wellbeing of our customers, partners and employees and we are continuing to ensure that we have the appropriate measures and precautions in place for their safety.
 
We are closely monitoring the ongoing developments in relation to the COVID-19 pandemic and are taking appropriate actions to comply with governmental mandates.
 
Financial measures
As is prudent, we are taking actions to manage short-term cost control while ensuring the business remains on a sound footing in the long term. This includes reducing operational costs, limiting our capital expenditures and optimizing our cash flows.
Accordingly, in the circumstances, the Board has taken the prudent, precautionary decision to defer payment of the final 2019 ordinary dividend of 13.0 US cents per share and the supplemental dividend of 7.7 US cents per share that were declared with the Company's 2019 full year results and scheduled to be paid on 30 April 2020.  These two dividends combined represent an US$ 11.7m payment to shareholders.  In accordance with Delaware Law, the US state in which Somero is incorporated, the Company is deferring the record date and payment date for the dividends and not cancelling the dividends.  Therefore, these two dividends will now be paid on or about February 5, 2021 to shareholders of record close of business on January 8, 2021.  
January 8, 2021 is currently the latest record date permitted by the London Stock Exchange in accordance with its standard dividend procedures.  The timing of the record date and payment date will be kept under review, and dependent on business conditions, the Board may decide to accelerate or further defer the dates. The Board currently intends to maintain its current dividend policy going forward, although any 2020 dividend will be paid as a final dividend only, with no interim dividend payment made later this year.
In addition, the Board is taking the prudent decision to cancel the US$ 1.0m share buyback program.
Financial update
The Company's financial position remains strong, with no debt, a substantial net cash position that currently exceeds US$ 24.0m, and substantial access to liquidity through the Company's US$ 10.0m line of credit.   
Outlook
While the implications of the COVID-19 pandemic are difficult to determine, the Board is confident in the health of our business and the long-term growth opportunities in front of us.  The Board's view is supported not only by the Company's strong financial position, but also the solid, albeit temporarily paused, non-residential construction activity pipeline that remains across our global markets, particularly in the US where customers have previously reported project backlogs that extend well into 2020, and by the progress we are making with our long-term new product initiatives.  
The Board will provide the market with updated guidance on the Company's performance and expectations of future performance as and when appropriate.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014. 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, Inc.                                                                              www.somero.com
Jack Cooney, CEO                                                                                            +1 239 210 6500
John Yuncza, CFO
Howard Hohmann, EVP Sales
 
finnCap Ltd (NOMAD and Broker)
Matt Goode (Corporate Finance)                                                             +44 (0)20 7220 0500
Carl Holmes (Corporate Finance)
Kate Bannatyne (Corporate Finance)
Tim Redfern/Richard Chambers (ECMO)
 
Alma PR (Financial PR Advisor)                                                                 somero@almapr.co.uk 
Rebecca Sanders-Hewett                                                                             +44(0) 20 3405 0205
Susie Hudson
Sam Modlin
David Ison
 


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