Florida focused building technology and concrete levelling specialist Somero Enterprises Inc (LON: SOM) announced on Wednesday that it would be implementing a series of cost-cutting measures to conserve cash, as it works to ascertain to implications of the Coronavirus pandemic.
In spite of the move, the company said that it remains in a strong financial position, and remains confident in long-term growth prospects.
As per the actions management said it would undertake to protect the company’s financial position, Somero Enterprises said it would furlough approximately 20% of its workforce, as well as cancelling all 2020 bonus and profit-sharing payments for all employees.
The company continued, saying that it would curtail ‘discretionary spending’ across all of its departments, as well as further capital expenditure (excluding commitments to ongoing building expansion projects).
Somero predicted that the annualised pre-tax impact of these efficiencies would equate to a saving of approximately $5.0 million.
Somero Enterprises speaks on its financial position
The company’s statement read,
“Somero entered this period of uncertainty with a strong balance sheet and good liquidity and its financial position has been strengthened further by these additional financial and cost saving measures. On 30 March, the Company indicated its net cash position exceeded US$ 24.0m. Management expects its net cash position at the end of 30 June will continue to exceed US$ 24.0m and the Company continues to have access to substantial additional liquidity through its US$ 10.0m line of credit. In addition, the Company will continue to closely monitor, and pursue as applicable, all US government funding opportunities for which the Company may be eligible. ”
Following the update, the company’s shares booked a notable 4.77% or 10.50p rally, to 230.50p per share 17:08 BST 10/06/20. The company’s p/e ratio is 7.56, their dividend yield is generous at 6.37%.