Somero Enterprises Inc. Trading Update (7327T)

TIDMSOM

RNS Number : 7327T

Somero Enterprises Inc.

10 January 2017

10 January 2017

Somero Enterprises, Inc.

("Somero" or the "Company")

Trading Update

Somero(R) is pleased to provide the following update on trading for the financial year ended 31 December 2016.

In the six months since 30 June 2016, the Company continued to deliver profitable growth and cash generation. Due to a strong finish to 2016 combined with continued margin improvement, the Board is pleased to announce the Company expects to report revenue slightly ahead of current market expectations and to report EBITDA comfortably ahead of current market expectations for the full year. In addition, given the strong cash generation of the business, the Company expects to report net cash as of 31 December 2016 that is significantly ahead of market expectations.

Demand in the second half of 2016 remained robust across our core product range with particularly strong interest in recently launched new products, the large line S-10A and small line S-940 Laser Screed(R) machines. Also contributing significantly to growth during the period were sales of large line S-15 Laser Screed machines, STS--11M spreaders, 3-D Profiler Systems(R), and parts driven by the high utilization of our installed base of equipment by customers.

Geographically, second half performance in our core markets was solid with Europe contributing significantly to growth, North America contributing satisfactorily to growth and trading in China remaining healthy. Also, as expected, trading in Latin America and the Middle East improved considerably in the second half of 2016, with Australia also contributing solidly to growth during the period. In Southeast Asia, India, Scandinavia, Korea, and Russia, while trading levels were in line with or down somewhat from the prior year, interest levels in our products remain encouraging in each of these territories and we see considerable growth opportunities going forward.

Following record results in 2016, the Board is confident in the Company's ability to deliver another year of profitable growth in 2017 based on healthy market conditions in our core markets and encouraging growth opportunities in our other territories. The Board's confidence is further supported by encouraging pro-growth corporate tax reform and fiscal policy proposals in the United States. In recognition of Somero's financial strength, strong cash generation, and our confidence in the 2017 outlook, the Board is pleased to announce that it has approved an increase to the Company dividend payout ratio to 40% of adjusted net income. This is an increase from the previous 30% payout ratio in effect for 2015. The change becomes effective with the final 2016 dividend to be announced with Somero's final results for the year ending 31 December 2016 which is scheduled to be released on 15 March 2017.

In addition, the strong cash generation of the business has built up cash reserves in excess of the Board's targeted net cash level of US$ 10.0m. The Board plans to review its cash position alongside cash requirements for current business needs and future investment during the first half of 2017. The Board will then assess the level of excess cash that may be subject to distribution back to shareholders through a special dividend later in 2017.

 
The information communicated in this announcement 
 contains inside information for the purposes of 
 Article 7 of the Market Abuse Regulation (EU) 
 No. 596/2014. 
 
 Enquiries: 
Somero Enterprises, Inc. www.somero.com 
 Jack Cooney, CEO [phone] 
 John Yuncza, CFO 
 Howard Hohmann, EVP Sales 
 
 finnCap Ltd (NOMAD and Broker) 
 Matt Goode (Corporate Finance) [phone] 
 0500 
 Carl Holmes (Corporate Finance) 
 Tim Redfern (Corporate Broking) 
 
 Redleaf Communications Ltd (Financial PR Advisor) 
 [e-mail] 
 Rebecca Sanders-Hewett [phone] 
 David Ison 
 Susie Hudson 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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January 10, 2017 02:00 ET (07:00 GMT)