Somero Enterprises Solid Interim Results
Somero has produced a very solid set of Interim Results with sales, margins, pre-tax profit and cash all increasing. North America continues to demonstrate excellent growth and as this is the largest market for the company, it is having a significant impact on overall results. That said, there was also significant progress in the Middle East, and Europe continues to recover. The balance sheet is strong, the dividend is progressing and the medium to long term investment case remains compelling.
Somero Enterprises Trading Update
Somero has published another positive trading update. With continued strong trade in North America and the Middle East, a good contribution from Europe and Latin America and increased activity in recent months in China, we are again upgrading forecasts for the full year. Interim results will be published on 8th September 2015.
In this note we assess the investment case for Somero. With a highly profitable and cash generative North American business, an excellent medium term growth opportunity in China and longer term growth prospects in India and other key markets in South East Asia, we believe that despite a good run of late in the share price, the investment case remains compelling.
Somero has produced another strong set of full year results with EBITDA, PBT, EPS and DPS coming in ahead of analysts’ expectations. With continued strong trade in the US, increased penetration of the products into China and growth in a number of other markets, we believe the company will again demonstrate very good growth in 2015.
Strategic Growth Plan
Somero Enterprises is the world leader in a niche market, namely precision concrete placing and levelling equipment. As such it achieves very high margins and is highly cash generative. With the US recovery in full flight, the market has become increasingly interested in and excited about the medium to long term growth story in Asian markets, making the Somero investment proposition so much more than a simple cyclical play. In this note we examine the company’s strategic growth plan.