Somero shoots higher on revised earnings guidance

Shareholders in laser machinery maker Somero Enterprises were beaming after the company said it made more profit in the first half of the year than the market was expecting it to make in the whole of the year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) at the half year stage are expected to be slightly ahead of the market's forecasts for the full year, while half year revenues should be around 50% higher than in the equivalent period of 2011.

The company currently expects that increased costs, resulting from increased investment in training, product development and marketing, will lead to second half profitability being lower than the first half, despite expectations that the out-turn for the full year will be substantially ahead of current forecasts for 2012.

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In North America the firm demonstrated strong growth during the half year, benefiting from mild weather conditions and a benign economic environment.

The Chinese business also performed well following the firm's investment in the region. Sales from the company's new product, the S-840, and the SXPD large line machines were significantly higher than in the same period last year.

However, it wasn't all good news as the group cautioned that it is likely that respective rates of growth will be slower in the second half of the year, consistent with previous years.

In a statement the firm said: "With healthy demand continuing, the company is implementing plans to add some costs in new product development, training, marketing and sales initiatives to take full advantage of a stronger sales environment. This is intended to put Somero in the best position to deliver growth in the medium and longer term, as well as to sustain the shorter term recovery that is evident in 2012."

The share price leapt 26.76% to 22.50p by 09:29.

NR