Somero Enterprises boosted by 'record' results and Line Dragon acquisition
By Duncan Ferris
Date: Wednesday 16 Jan 2019
(Sharecast News) - Shares of Somero Enterprises jumped on Wednesday after stating that it expected revenues for 2018 to beat market expectations and announced it had acquired the assets of Line Dragon LLC for $2.0m in cash.
The concrete installation technology developer said it expected revenue to come in ahead of market expectations and its own guidance of $90m, with earnings before interest, taxes, depreciation, and amortization beating a $29m forecast after strong, profitable growth and healthy cash generation in the second half of the year.
A statement from the AIM company said the results were driven by the volume increase, effective management of operating costs and an improved pipeline of construction projects in North America.
Elsewhere, positive contributions were made in Australia, India and Scandinavia, while Somero enjoyed solid activity levels in the Middle East and healthy demand for new products in Europe.
A statement from Somero said: "Following record results in 2018, the board is confident in the company's ability to deliver another year of profitable growth in 2019. The underlying market conditions in our North American and European markets remain buoyant, and the board sees meaningful growth opportunities in China and our other territories."
Meanwhile, the company also announced the $2m acquisition of assets from Line Dragon, a provider of concrete placing and hose dragging equipment, which it expects will complement its SP-16 concrete line placing & pulling system, allowing for the introduction of innovative features to customers.
Line Dragon generated revenue of $2.0m in 2018 and Somero expects the transaction to have a slight positive impact on its 2019 earnings.
Jack Cooney, president and chief executive of Somero, said: "We are excited to add Line Dragon to the Somero family of products and believe, in combination with Somero's impressive capabilities, we are positioned well for continued growth and innovation of this product line."
Somero Enterprises' shares were up 13.28% at 331.90p at 1239 GMT.
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