Somero Enterprise Share Discussion Threads

[scooper72] 06/9/2019 09:13

Wish I hadn't averaged down yesterday- was obviously a bit premature

[justiceforthemany] 05/9/2019 15:06

Spain, Portugal, Netherlands, Finland all grew between 0.5% and 1% in Q2.

[simba_] 05/9/2019 14:13

Which parts of Europe are seeing good GDP growth?.

[justiceforthemany] 05/9/2019 09:54

Europe accounts for only ~10% of all sales. Out of this Germany probably 1-2% only. Some parts of Europe are actually seeing good GDP figures.
>70% of revenue is from North America.
China and ROW were flat while Latin America showed growth in revenue.

A few director buys and with a decent dividend coming up in a couple of weeks could see this back to 250p+

[source] 05/9/2019 09:20

German factory orders -2.7%German construction PMI 46.3- weather changes are not the only factor needed to improve SOM outlook. It's clearly a cyclical player & it's markets are still deteriorating. Regards,

[shanklin] 05/9/2019 07:20

July marginally drier than average. No info yet for August

[justiceforthemany] 04/9/2019 17:47

H2 is expected to be better than H1.

Even if we adopt a negative outlook and assume H2 mirrors H1 and the record rainfall returns (unlikely) we are looking at PBT of $21M and EPS of 28c.
This equates to EPS ~ 23p at current exchange rates and a current P/E of 9.6 which is low.

Company is projecting FY numbers similar to 2017 which gives PBT of $25M, EPS 31c and a P/E of just 8.7

As for the dividend even if no 'special' is paid this year the yield is now 7.5%. With a supplement we are looking at a yield >10%.

The balance sheet is strong and the equity ratio of 4.6 is excellent. Intangibles/goodwill are minimal also.
Cash alone of $15.1M exceeds the total liabilities of $13.6M.

M&A is also probable with the shares trading at levels not seen for 3 years.

[justiceforthemany] 04/9/2019 17:22

Over-reaction today IMO.

'The US non-residential construction market remains very healthy.

Despite our disappointment with H1 2019 trading, we do not see a fundamental change in our end-markets and maintain a positive outlook for the remainder of 2019 particularly as our customers in the US return to more typical levels of productivity. Our confidence is based on our close customer contacts through which we can assess customer workloads, backlogs and business outlook.'

[grahamburn] 04/9/2019 14:27

The net cash position is currently nudging the base level of $15m (following the significant reduction in the period) which indicates that the supplemental dividend which has been paid in recent years may be at risk without a dramatic positive inflow in the second half.

[source] 04/9/2019 12:08

Cash and cash flow are significantly down from same period last year actually...marginally higher dividend increase is to try and get people to hold IMO & not being paid out of improved business strength (so arguably less sustainable).It may Not be a bad company, but management are being far too rosy given the problems they're experiencing in various of their markets.

[mfhmfh] 04/9/2019 11:57

also a takeover target at this price. IMHO.

[greyingsurfer] 04/9/2019 11:16

And the reverse would make it more attractive! I wouldn't put much money on a large increase in value of the £ againtst the $ soon.

[this_is_me] 04/9/2019 11:05

A big bounce in the FX rate of GBP v. USD will make the dividend look less attractive.

[mfhmfh] 04/9/2019 10:55

board seem confident in the future as have increased dividend. IMHO.

[fredfishcake] 04/9/2019 10:33

OK, you can argue that it's no longer a growth share...but it is a cash cow and now pays a dividend higher than its P/E. Management has a history of telling it like it is and they sound cautiously optimistic about the future, so I've added some for the SIPP. The Donald will try to manipulate the US economy upwards for the next year to ensure re-election after all.

[justiceforthemany] 04/9/2019 10:23

P/E <10 with net cash.

[stepone68] 04/9/2019 09:57

I've decided to quit while I was still (slightly) ahead. Leave it in cash for the time being while Brexit plays out.

[source] 04/9/2019 09:46

?No longer behaving like a growth stock so derating has started as is normal for ex-growth companies. ?They say profit warnings come in threes, today was Somero's 2nd. Now obvious why management was selling earlier this year.

[sleepy] 04/9/2019 09:17

Anyone got data on July and/or August 19 rainfall?

[sleepy] 04/9/2019 09:07

Am not denying weather has been above averagely wet. Am asking how valid an excuse that is given the H2 18 and H1 19 sales?

[greyingsurfer] 04/9/2019 08:55

Plenty of other, independent, sources for that info. eg

hxxps://www.noaa.gov/news/us-has-its-wettest-12-months-on-record-again

[greyingsurfer] 04/9/2019 08:55

Plenty of other, independent, sources for that info. eg

hxxps://www.noaa.gov/news/us-has-its-wettest-12-months-on-record-again

[sleepy] 04/9/2019 08:52

Shanklin - is your comment based on this extract from Somero’s June RNS?

“An average of 36.2 inches of precipitation has fallen over the Lower 48 from May 2018 to April 2019 representing the highest level recorded in over 120 years and six inches over average”

Note that this does not specifically refer to the H1 19 period and their strong sales in H2 18