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Somero Enterprises, Inc. (LSE:SOM), a concrete levelling specialist listed in the UK but with a significant focus on the US market, reported a challenging half-year performance. The company's profits experienced a sharp decline due to a combination of labour shortages and concrete rationing, which had a particularly severe impact on trading in the US. Although operations in Europe remained stable, the company also faced difficulties in Australia due to adverse weather conditions.
For the six-month period ending June 30, Somero Enterprises saw its interim revenues decrease by 12% to $51.8 million. This decline in revenue was accompanied by a significant drop in profits, which fell by one-third to $10.6 million. The company also reduced its dividend by 20%, bringing it down to 0.8 cents per share.
Jack Cooney, the chief executive officer of Somero Enterprises, acknowledged the tough conditions faced during this period. He highlighted the resilience of the non-residential construction market as a positive sign, stating, “Looking ahead, the resilience of the non-residential market gives us confidence that, as external challenges subside, our performance will improve.” Cooney's comments reflect a cautiously optimistic outlook, suggesting that the company expects to see a recovery as the external issues affecting its operations begin to resolve.
The challenges faced by Somero Enterprises included significant labour shortages, which have been a persistent issue across various sectors and have had a notable impact on the company’s ability to maintain its usual operational efficiency. In addition, rationing of concrete, a critical resource for the company’s concrete levelling services, further constrained its trading activities.
In Australia, the company’s operations were hindered by adverse weather, which added another layer of difficulty to its already strained supply chain and operational processes.
Despite these setbacks, the company’s leadership remains hopeful about future prospects. The non-residential market, which is a key sector for Somero, is showing signs of resilience, and the company anticipates that improvements in external conditions will positively influence its performance in the coming periods.
As a result of these financial challenges, shares in Somero Enterprises fell by 2% to 300 pence. This decline reflects the market's reaction to the company's recent performance and its cautious outlook for the near future.
