Somero's first half dampened by record rainfall across the US
By Iain Gilbert
Date: Friday 07 Jun 2019
(Sharecast News) - Manufacturing company Somero Enterprises warned on revenue and earnings on Friday as it said trading in the five months to the end of May was hit by adverse weather conditions across the US.
Somero said record rainfall across the US - its largest market - delayed project starts. In turn, this slowed the pace of equipment purchased by its customers.
Whilst there was an improvement in trading to end the month of May, and although the company expects weather conditions and therefore trading in the US to improve throughout the rest of the year, it does not expect to fully recapture the shortfall caused by the extended period of poor weather.
As a result, Somero warned investors that full-year revenues would come to approximately $87m, while earnings before interest, tax, depreciation and amortisation would hit roughly $28m - down 7.45% and 9%, respectively.
Chief executive Jack Cooney said: "While we are disappointed to revise our outlook for full-year expectations in 2019, caused largely by poor weather in the US, we do not see a fundamental change in our markets and continue to have an optimistic outlook for the business in 2019 and beyond as our customers return to more typical levels of productivity."
Discussing the warning, AJ Bell investment director Russ Mould "Today's setback is a good example of how you need to judge a profit warning on what's caused it and whether it was avoidable.
"The company and its shareholders will be frustrated that earnings and dividends expectations will have to be downgraded, yet Somero has been through these weather problems before and bounced back with confidence."
At 0850 BST, Somero shares were down 18.87% to 288p.
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