7th Jun 2019 09:30
LONDON (Alliance News) - Somero Enterprises Inc shares were rocked Friday after the floor-laying machinery manufacturer said its trading in the five months to the end of May was below management expectations.
Shares in Somero were down 20% in morning trade at 282.89 pence each.
The company said "adverse weather conditions" in the US - Somero's largest market - hurt trading.
"Broad sections of the US experienced the highest levels of rainfall on record. The record rainfall seen in the US has delayed project starts which in turn has slowed the pace of equipment purchased by our customers, the impact of which was seen through historically strong trading months of March and April," the company explained.
Somero said there an improvement in trading in May, and the company expects weather conditions, and therefore trading, will improve throughout the rest of 2019.
However, Somero does not expect to "fully recapture" the shortfall caused by the "extended period of poor weather".
As a result, Somero now expects to deliver USD87 million of revenue in 2019 and earnings before interest, tax, depreciation and amortization of about USD28 million.
In 2018, Somero generated revenue of USD94.0 million and recorded Ebitda of USD30.8 million.
Despite the weak trading in 2019 so far, Somero said it continues to see growth opportunities across all its markets, including the US. This optimism is "reinforced by extended backlogs and healthy new project starts, albeit much delayed".
"The positive US market conditions have not changed and whilst we anticipate it will take some time for momentum to rebuild, the level of work in front of our customers remains significant. The company's strong balance sheet, flexible operating model and diversity across territories gives the board confidence for the medium to long term," Somero said.
In the company's other markets - Europe, China, and the Rest of World - Somero said its 2019 trading has been comparable to 2018.
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