Last checked at 15 May 2008 07:00
15 May 2008
THIS ANNOUNCEMENT MAY NOT BE RELEASED, PUBLISHED OR DISTRIBUTED IN OR INTO THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA OR TO US PERSONS (AS DEFINED IN REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED) OR TO RESIDENTS, NATIONALS OR CITIZENS OF CANADA, JAPAN OR AUSTRALIA.
Somero Enterprises, Inc ®
("Somero" or "the Group")
Trading Statement
At the time of our preliminary results in early April 2008, Somero identified that the Group was seeing early signs of slowing equipment purchases in the US but that the non-residential construction market in the US was strong and that International sales were growing in line with our expectations. Against that background we reiterated our commitment to continue investing in developing important new markets, whilst being mindful of the need to regularly review our cost base.
Since early April these trends have continued. International demand has been strong and as a result our International business has seen excellent year-on-year growth of around 20%. In the US, however, after a solid January and February, demand for our large line product in particular has slowed dramatically as the widespread sentiment of a macroeconomic slowdown has impacted clients' capital expenditure plans. As a result, management believes it is now appropriate to expect a difficult environment for our US large line sales over the full year. Swift action has been taken to adjust the Group's cost base, with reduced headcount and efficiencies leading to savings versus planned expenditure of approximately US$1.9m in 2008 and US$2.5m on an annualised basis. Management will continue to be very focused on further opportunities to source efficiency savings. In addition, new sales incentives for our customers and our salesforce are being examined and a pipeline of new products is on schedule for release towards the end of 2008.
Taking a cautious view on any potential recovery of large line US sales, we would expect total revenue for the year to end December 2008 to decline by approximately 10-15% compared with the previous year and as a consequence we would expect results for 2008 to be materially below market expectations. The impact on the outcome for the year will be mitigated by actions already taken to reduce the cost base, as well as by continuing strategic investments in the International operations by further expanding our sales efforts and accelerating new product development.
Overall the board believes that the Group's strong cashflow, market position and products in both the US and internationally, combined with its high margins, leave Somero well placed to benefit from continuing developments in the global construction and logistics markets. The Group's balance sheet also remains in a strong position, with year end net debt likely to be nearly half that of December 2007's level.
The board remains confident that the strategies in place will result in continued long-term growth for Somero.
Enquiries:
| Financial Dynamics | +44 (0)20 7831 3113 |
| Harriet Keen / Matt Dixon / Erwan Gouraud | |
| Hawkpoint Partners Limited | +44 (0)20 7665 4500 |
| Christopher Kemball / Christopher Robinson | |
| Collins Stewart | +44 (0)20 7523 8000 |
| Nick Ellis |
This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any securities of Somero Enterprises, Inc. (the "Company").
This announcement may not be released, published or distributed in or into the United States, Canada, Japan or Australia or to US Persons (as defined in Regulation S under the US Securities Act of 1933, as amended (the "US Securities Act")) or to residents, nationals or citizens of Canada, Japan or Australia. The distribution of this announcement in certain other jurisdictions may also be restricted by law and persons into whose possession this announcement or any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
No securities of the Company have been registered under the US Securities Act. No securities of the Company may be offered or sold in the United States or to US persons (as defined in Regulation S under the US Securities Act) except pursuant to an effective registration statement under the US Securities Act or pursuant to an available exemption from the registration requirements under the US Securities Act.
No securities of the Company have been registered under the applicable securities laws of Australia, Canada or Japan and may not be offered or sold within Australia, Canada or Japan or to, or for the account or benefit of citizens or residents of Australia, Canada or Japan.
ENDS