Somero trading as expected despite North America slowdown

(Sharecast News) - Construction sector player Somero said in a first-half update on Monday that its major markets had experienced healthy conditions in non-residential construction, resulting in trading for the period ending at the high end of the guidance range it specified on 20 June. The AIM-traded firm said that while there was an overall decline in trading compared to the first half of 2022, largely influenced by North America, other regions including Europe and Australia showed positive momentum, reporting improvements over the comparable period a year earlier.

North America was the primary driver for the decline, but the company said it expected a rebound in the second half due to increased availability of 'S-22EZ', a product that had received positive feedback from customers.

The healthy non-residential construction activity levels across various project types had meanwhile translated into extended project backlogs, which the board said boded well for the region's future performance.

On the other hand, trading in Europe and Australia displayed positive momentum, carrying forward from the second half of 2022.

Strategic investments made in those regions, and the successful acquisition of new customer relationships, contributed to the improvement over the first half of 2022.

Additionally, the increased market penetration of Somero's broader product offering also played a significant role.

The rest of world geography, which includes territories such as Latin America and the Middle East, contributed positively to the overall first half of trading, as expected.

Looking ahead to the second half, Somero said it anticipated a further improvement in trading for North America, thanks to the increased availability of S-22EZ and a robust non-residential construction industry.

Europe and Australia were also expected to make healthy contributions to the second-half result, driven by momentum carried over from the first half.

"As such, the board remains confident that 2023 results will fall in line with market expectations with revenues of approximately $120m, EBITDA of approximately $36m, and year-end cash of approximately $32m," the Somero board said in its statement.

At 1615 BST, shares in Somero Enterprises were down 4.04% at 340.67p.

Reporting by Josh White for Sharecast.com.