Somero Regulatory News (SOM)

4 Nov 2008 07:00



4 November 2008 

Somero Enterprises, Inc ®

("Somero" or "the Group")

Trading Statement

Throughout this year, in anticipation of potentially more challenging trading conditions, Somero's management has been reviewing the Group's overall cost base. This review has now concluded, and the Board has announced the second phase of a major cost reduction programme which is expected to reduce overheads from the beginning of 2009 by a further US$5.0m. Taken together with the US$2.5m of cost reductions already announced in the first phase of the programme, this will constitute a 30% reduction in SG&A for 2009.  

Demand for the Company's products remains particularly strong in the Middle and Far East, and the introduction of the new Mini Paver was well received and generated significant interest with potentially a wider market application.

However, after a healthy performance in August and September, in line with the revised revenue and earnings targets set following the Group's trading update in May 2008, Somero's overall sales activity deteriorated in October.

The combination of customers finding it difficult to obtain finance for purchases of Somero's large and small line equipment, together with the very rapid recent appreciation of the US dollar in the last month, has led to significant lengthening of sales cycles, both in the United States and in other markets.

The Board believes that, if October's trading environment were to extend into November and December, Somero's results for the year to 31 December 2008 would be significantly below current market expectations. 

The Board remains confident that the fundamentals of the Group remain strong and that the strategies in place combined with the Group's market leading position will result in continued long-term growth for Somero.

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Ends