1st Mar 2016 11:10
LONDON (Alliance News) - Somero Enterprises Inc shares rose on Tuesday after the company experienced a very successful year in 2015 by reporting a rise in pretax income, driven by the launch of new products in the year, allowing it to increase its dividend for the year by 25%.
"By every measurement, 2015 was a tremendous year. We grew the business significantly, we expanded our product portfolio with innovative new products, we made progress in developing key new markets, we expanded our operational and training capabilities with investment in new facilities, we delivered remarkable financial performance, and we acquired key new talent for the organization," said Chief Executive Jack Cooney.
The company, which manufactures laser-guided machinery used in laying concrete, said its pretax income rose to USD17.4 million in 2015 from USD12.4 million in 2014 after revenue experienced a healthy rise to USD70.2 million from USD59.3 million.
However, the company paid a substantial amount of income tax in 2015 compared to a benefit in 2014, meaning its net income in 2015 fell to USD11.6 million from USD14.5 million.
The company made the decision to make a "healthy dividend increase" of 25% in 2015 to 6.9 cents per share.
Somero said earnings before interest, tax, depreciation, amortisation, foreign exchange and stock based compensation rose to USD20.0 million in 2015 from USD15.0 million.
Revenue growth in the year was driven by Somero's new products, with its S-485 Laser Screed machine generating revenue of USD3.9 million in the year.
North America remained Somero's key sales region, generating over 70% of the group's overall revenue in the year. Revenue in North America grew by one third in 2015 and was driven by sales of large line and small line equipment.
Revenue from Europe, the Middle East, and Africa contributed around 14% of overall revenue, and remains the smallest geographical segment in the business. Revenue from the region grew by over 52% in 2015, helping to offset a fall in revenue from the third geographical segment.
Revenue from the rest of the world was the only geographical segment to report a fall in revenue, which declined 28% year-on-year as sales of all products dropped in the period. However, the segment remains a larger driver of revenue than the EMEA.
Rest of the world sales includes China, which is currently a challenging market for the company but remains a key area for the future, despite revenue falling to USD6.1 million from USD9.5 million in 2015.
Importantly, Somero introduced the Somero Floor Levelness System and the S-10A Laser Screed machine in late 2015, alongside the S-940 Laser Screed machine in early 2016 - which will all hopefully drive further growth in sales during this year.
"We see 2016 as an exciting year full of opportunity. We believe we are well positioned to capitalise on expected growth in our core US and other existing markets, extend our global footprint and grow revenues from new products. Most importantly, we look forward to delivering another year of superior results for our shareholders," said Cooney.
Capital expenditure in the year was significantly higher at USD4.2 million compared to a budget of USD1.2 million in 2014. Still, net cash at the end of the year rose to USD12.6 million from only USD6.6 million at the end of 2014.
Somero shares were up 9.9% to 147.8p.
By Joshua Warner; [email protected]; @JoshAlliance
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