16th Jan 2019 10:04
LONDON (Alliance News) - Somero Enterprises Inc on Wednesday expressed confidence in delivering growth in 2019 after outperforming market expectations in the recently ended year.
The stock was trading 16% higher on Wednesday morning at 338.50 pence a share.
In addition, the company said it acquired the assets of Line Dragon LLC for USD2.0 million in cash.
Line Dragon is a provider concrete placing and hose dragging equipment, while Somero manufactures machinery used in horizontal concrete placement.
Somero expects Line Dragon to complement its SP-16 concrete line placing & pulling system, with the combined offering introducing innovative features to customers.
In 2018, Line Dragon generated revenue of USD2.0 million and Somero expects the transaction to have a slight positive impact on its 2019 earnings.
"The opportunistic Line Dragon acquisition is a great fit for Somero to expand our product offering and further extend our customer reach," said Somero Chief Executive Jack Cooney.
Separately, the company said it delivered strong, profitable growth and healthy cash generation in the six months to the end of December 2018.
As a result, Somero expects its revenue to come in ahead of market expectations and its guidance of USD90.0 million, with earnings before interest, taxes, depreciation, and amortization beating a USD29 million forecast.
The company said the results were driven by the volume increase and effective management of operating costs.
In 2018, Somero continued to make good progress in executing its product innovation growth strategy, it said, with the introduction of the SkyScreed 25, a new, innovative product targeting the structural high-rise market segment.
The SkyScreed 25 will be officially launched at the annual World of Concrete trade show in Las Vegas, Nevada in late January, the company said.
Geographically, in North America, the strong trading reflects the improved pipeline of construction projects.
The growth in the Rest of World territories was led by a significant contribution from Australia along with positive contributions from Scandinavia and India, Somero noted.
Meanwhile, in the Middle East, activity levels were solid throughout the year , and in Europe, the company said it saw healthy demand for new products and technology upgrades, in addition to opportunities to refresh the installed base of equipment.
In China, Somero said it is pleased with its efforts to refine its strategy to target the quality market segment.
In Latin America, trading improvement was encouraged by the addition of future project opportunities.
Looking ahead, Somero said it is confident in its ability to deliver another year of profitable growth in 2019.
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