Somero Enterprise Share Discussion Threads

[stepone68] 14/3/2018 11:10

Unfortunately not always true Rhomboid. There was discussion on this before. I think the best you can hope for is 15%, and for me, my broker can not reclaim any of it. I can't remember the details.

[rhomboid] 14/3/2018 10:49

If you’ve filled in a W8-BEN your dividend will be paid gross

[rivaldo] 14/3/2018 10:06

For 2017 SOM will have paid out a total of 32.4c of dividends - 15.5c of normal divis and 16.9c of special divis.

Not bad at all :o))

Withholding tax is only 15%.

[stepone68] 14/3/2018 09:19

Correct, and there will be US withholding tax deducted at 30%.

[nfs] 14/3/2018 09:16

I think the dividend numbers are in us cents not pence

[cfro] 14/3/2018 08:23

Nice and solid results.

Mouth-watering increase in the divi (12.27p) plus a special divi on top (3.6p). Well worth holding the shares just for that!

Also worth noting that the Trump imposed tax cuts will benefit this years accounts.

[interceptor2] 14/3/2018 08:21

Very nice set of results with a good progressive dividend policy, particularly pleased to see that the strong trading seen in main markets has continued into the new financial year.

[glaws2] 14/3/2018 08:17

Finncap raised target price to 465p

[its the oxman] 14/3/2018 08:05

Strong results, div and progress. More to come this year, so good chance of seeing 400p plus soon.

[asturius101] 14/3/2018 07:57

looks good

[martinthebrave] 14/3/2018 07:48

Pretty much "In Line" with January's raised expectations. Rev's $85.6m ($85m), EBITDA $28m (Comfortably ahead of $26m), Cash $19m ($18.5m). Dividend 15.5c + Supplementary Divi Bonus $3.6c. Strong Outlook in US & Europe. Very Nice.

[chashley1806] 14/3/2018 07:37

Ah, thank you for the clarification.

[glaws2] 14/3/2018 07:33

chashley - to be a pedant they are re-locating their Chesterfield base - one already exists.

[chashley1806] 14/3/2018 07:31

Very small point, but was interested and delighted to note that SOM are opening a base in Chesterfield in Q2 of 2018. A vote of confidence for the UK, given Brexit?Overall though, these look like excellent results. Am still wading through them...

[rivaldo] 14/3/2018 07:16

Excellent results - well ahead of forecasts for sales, EBITDA, PBT and EPS.

PBT of $25.7m compares to just $24m forecast by Finncap.

And 0.31c EPS compares to forecast 27.4c. Upgrades coming for this year?

Plus there's a 3.6c special divi on top of the 15.5c normal divi.

Most importantly, current trading for both the USA and Europe is very strong indeed:

"Current Trading and Outlook

The high level of activity in North America during the latter part of 2017 has continued in 2018. We continue to see strong interest in our equipment and remain encouraged by the positive non-residential construction outlook in the US for 2018. The expected positive impact from US corporate tax reform is an additional factor reinforcing our confidence in North American growth prospects.

In Europe, the strong performance of 2017 is also expected to carry forward into 2018. Similar to conditions we see in the North American market, European interest in our equipment remains strong driven by demand for replacement equipment, technology upgrades, and new products. Our confidence in the growth prospects in Europe is supported by improved economic conditions across the territory."

[smallcapinvestor1] 09/3/2018 13:27

I've been on here for years saying if som was 100 or 1000 times the size it would be exactly the kind of company that buffett would love to buy. It meets all his criteria.

[glawsiain] 09/3/2018 11:42

Final results are just a few days away - March 14. The last trading update stated

" 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"

with an outlook of

"Following record results in 2017, the Board is confident in the Company's ability to deliver another year of profitable growth in 2018 as the underlying market conditions in our core markets remain positive and as the Board continues to see significant growth opportunities in our other territories. The Board's confidence is further supported by recently enacted pro-growth US corporate tax law changes which are expected to stimulate increased economic activity in the Company's largest market."

[rivaldo] 09/3/2018 11:38

SOM are noted here as one of 10 AIM stocks which Warren Buffett might like (I also own TAP which is recommended):

[...]

"The rules we used included:

● Companies in the top 20 percent of the market based on their percentage of free cash flow to sales.

● A minimum average 10% return on capital employed and return on equity over five years.

● Companies producing above average operating margins in their respective sectors over five years.

We sorted the list based on Stockopedia's QualityRank, which takes into account long-term quality factors, balance sheet strength and any potential accounting or insolvency risk red flags - from zero (poor) to 100 (excellent)."

[chashley1806] 08/3/2018 12:22

Bother! In my para 6, I've just realised I used the wrong anticipated eps % growth rate. It should be 24%, not 27% (using Paul Scott's figures). So, para 6 should read:6) Continuing the analysis for the estimated 2018 eps figures, if my maths is right, fair value would imply a share price of 710p (ie. if 12/24 = 355p, then 24/24 = (355x24)/12 = 710p.)This doesn't change my overall message: I'm anticipating significant upside to the share price based on Jim Slater's PEG analysis which, if I'm right, could see the share price doubling this year from 355p to 710p.

[chashley1806] 08/3/2018 11:22

(Re-sending post with, I hope, better formatting).Hi dannyt90In short, my hope is that we will see significant upside to the share price Here's my thinking based on using Jim Slater's PEG analysis.1) Paul Scott recently reported some updated eps estimates as follows: 2017: eps is 21.8p; 2018: eps is 27.2p. This follows a reported eps in 2016 of 18.5p (at current £/$ exchange rate). 2) So, using Paul Scott's figures, year-on-year eps % growth is an estimated 17% between 2016 & 2017, and 24% between 2017 & 2018.3) As I understand Jim Slater's PEG analysis, a fairly valued company is when the PER equals the eps % growth rate. Therefore, if the eps % growth rate for 2016/17 is 17%, then a fairly-valued PER would be 17.4) At the time of writing, the share price is 355p with my broker stating SOM's PER to be 12, which undervalues the company according to the Jim Slater PEG analysis. So, if my maths is right, fair value using these figures would imply a share price of 502p (ie. if 12/17 = 355p, then 17/17 = (355x17)/12 = 502p).5) That's not a million miles off the last target price issued by SOM's analysts of 450p (as I recall).6) Continuing the analysis for the estimated 2018 eps figures, if my maths is right, fair value would imply a share price of 799p (ie. if 12/27 = 355p, then 27/27 = (355x27)/12 = 799p.So, as I see it, there is potentially lots of upside to the share price if: a) the actual eps reported by SOM's next week is in line with broker estimates; and b) the market recognises that the share price is undervalued and re-rates accordingly.My frustration up till now is that SOM has been meeting analyst expectations over the past couple of years, but the market has not recognised this. Maybe this will change after next week?

[chashley1806] 08/3/2018 11:18

Hi dannyt90In short, my hope is that we will see significant upside to the share price Here's my thinking based on using Jim Slater's PEG analysis.1) Paul Scott recently reported some updated eps estimates as follows: 2017: eps is 21.8p; 2018: eps is 27.2p. This follows a reported eps in 2016 of 18.5p (at current £/$ exchange rate). 2) So, using Paul Scott's figures, year-on-year eps % growth is an estimated 17% between 2016 & 2017, and 24% between 2017 & 2018.3) As I understand Jim Slater's PEG analysis, a fairly valued company is when the PER equals the eps % growth rate. Therefore, if the eps % growth rate for 2016/17 is 17%, then a fairly-valued PER would be 17.4) At the time of writing, the share price is 355p with my broker stating SOM's PER to be 12, which undervalues the company according to the Jim Slater PEG analysis. So, if my maths is right, fair value using these figures would imply a share price of 502p (ie. if 12/17 = 355p, then 17/17 = (355x17)/12 = 502p).5) That's not a million miles off the last target price issued by SOM's analysts of 450p (as I recall).6) Continuing the analysis for the estimated 2018 eps figures, if my maths is right, fair value would imply a share price of 799p (ie. if 12/27 = 355p, then 27/27 = (355x27)/12 = 799p.So, as I see it, there is potentially lots of upside to the share price if: a) the actual eps reported by SOM's next week is in line with broker estimates; and b) the market recognises that the share price is undervalued and re-rates accordingly.My frustration up till now is that SOM has been meeting analyst expectations over the past couple of years, but the market has not recognised this. Maybe this will change after next week?

[dannyt90] 05/3/2018 13:33

Earnings Announcement next week 14th March 18.Any thoughts on share price around this Announcement?

[mrx001] 22/2/2018 11:46

Doesn't look likely today. :0(

[its the oxman] 22/2/2018 11:37

Gonna break 400p soon

[interceptor2] 20/2/2018 08:17

free stock charts from uk.advfn.com


The chart set up is looking rather constructive, SOM seems to follow a fairly regular pattern of enjoying long periods of positive increases after a good time of consolidation. The last decent stage 2 advance started in March 2016 at 158p breakout and enjoyed a 113% advance to 337p in the next 12 months. Currently we broke out last month of the old 337p resistance after 10 months of consolidation and are now 11% higher at 375p, feels like the early stages of the next stage 2 period?

Since the AGM in June 2017 when they advised the USA had been flat the news from the US which is 70% of revenue has become stronger in every update. First they reported in the trading update in July that June saw the highest trading levels during the year as weather improved and cancelled projects were being carried over to H2.

Then with the release of the interims in September it was confirmed that the positive momentum in the US in June had continued into H2, then followed the January trading update that was again very positive about trading the US as well as Europe and ROW.

SOM did say that the tax changes in the US was positive and expected to stimulate economic activity. Other regions were also very strong but the reason I have concentrated on the US is because still 70% of revenue is derived from there so any faster than expected growth there will have a significant effect of the full year results.

I read plenty of press and financial commentary that the growth in the USA isn't sustainable or that it isn't real growth, but I have noticed that in nearly every UK company that has exposure to the US that their RNS updates are all rather positive about trading and outlook towards the US, so I have to conclude the growth is real and that SOM are in a very healthy position as we look forward to the full year results next month.