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The Somero Enterprises share price rockets again on forecast upgrades

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The Somero Enterprises (LSE: SOM) share price has been on a heck of a ride recently. This UK engineering share has rocketed 155% in price over the past 12 months. That’s after an additional impressive 11% gain today. The business hit new record peaks of 485p per share before settling at just over 461p as I write.

Somero’s share price has soared on Thursday following a positive reaction to fresh financials. It’s the latest in a string of encouraging updates from the AIM company, which specialises in the manufacture of concrete placing equipment such as screeds.

Somero’s share price soars again

Somero announced today that it has enjoyed robust trading across the board recently. It has seen “stronger than anticipated trading momentum in the US in the first four months of the year”. Furthermore, the business has also seen “signs of improving activity levels in Europe and Australia”.

As a consequence, it now expects to beat the earnings guidance for the full financial year that it laid out in mid-March.

Back then Somero had predicted that 2021 revenues would grow in the “single mid-digit percentage range” from the $88.6m it reported for 2020. But the company now expects to report sales of around $100m, it said today. Additionally Somero now expects full-year adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to clock in at roughly $31m in 2021. This is better than the company’s prior estimate that adjusted EBITDA would “grow modestly” from the $26.1m reported last year.

Somero also said that its year-end cash position for 2021 would likely beat the approximate $27.4m it forecast back in March.

Strength across the board

Breaking down the firm’s regional performances, the company described its US territory as being an “active” marketplace. That’s no surprise as it sources 80% of its total sales from there. It said that it has enjoyed “healthy” sales across its product portfolio in the US, and added that sales were particularly good in the boomed screed category. This was “driven by demand for new warehousing required to keep pace with the growth in e-commerce operations.”

Elsewhere, the company explained that its “early positive 2021 performance in Europe and Australia supports the expectation for meaningful contributions to growth from both regions” this year. This is despite the lingering impact of Covid-19. And all other regions are trading as expected too.

Looking ahead, Somero expects new products rolled out in 2020 — such as the SRS-4, the Somero Broom+Cure and the SkyScreed 36 — “to contribute meaningfully to growth in 2021”.

Finally it said that it “continues to work on a pipeline of new products”. In fact, the business anticipates the release of an additional new product before the end of 2021. The firm had already rolled out its Somero SkyStrip plywood sheet-stripping machine last month.

The post The Somero Enterprises share price rockets again on forecast upgrades appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Somero Enterprises, Inc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2021