Somero ends year in line with expectations

(Sharecast News) - Somero Enterprises reported a strong financial performance for 2023 in an update on Wednesday, pencilling in full-year revenue of $120.7m, in line with market expectations. The AIM-traded firm attributed the growth to a robust second half, driven by the S-22EZ relaunch and a resilient US non-residential construction market.

North America revenues for the year came in at $88.4m.

It said its European and Australian markets improved year-on-year, with sales growth driven by new customers and favourable construction conditions.

Australian sales grew 18% to $9.9m, while European sales reached $15.1m.

Parts and service revenue increased 9% to $20.5m, with strong growth in Europe and Australia.

The rest of world segment sales declined due to the product mix in Latin America and planned volume reduction in China, resulting in $7.3m in revenues.

Somero said it expected to report an annual adjusted EBITDA of $36m, and a year-end cash position of $33m.

On the operational front, Somero said it introduced new products in January, including the S-940e electric machine and the SRS-6s to address market needs.

The company also secured a new facility in Belgium to serve customers and address local repair and servicing demand, expected to be operational in 2024.

"In 2024, the board expects the US market to remain strong, supported by customers reporting high levels of activity and healthy backlogs, continued growth in Europe and Australia, and multiple new product launches," Somero said of its outlook.

"With consideration to these factors, the board expects 2024 will be another highly profitable year with healthy cash generation, revenues that are comparable to 2023, and EBITDA that reflects modest incremental investment including the new Belgium service and training centre and the annualised impact of strategic resources added in 2023.

"This incremental investment is expected to be within our traditionally targeted $2m."

Somero said it would release its final results for 2023 on 5 March.

At 1350 GMT, shares in Somero Enterprises were up 4% at 363.99p.

Reporting by Josh White for Sharecast.com.