Somero Enterprises Inc on Wednesday said annual profit fell, despite revenue ticking up, as operating expenses and cost of sales rose, prompting it to reduce its total dividend for the year.

The Fort Myers, Florida-based laser-guided concrete levelling machinery specialist said pretax profit fell 8.5% to $40.8 million in 2022 from $44.6 million in 2021, despite revenue ticking up 0.2% to $133.6 million from $133.3 million.

This was because costs of sales increased 1.6% to $57.4 million from $56.5 million, while total operating expenses rose 4.4% to $33.1 million from $31.7 million.

Operating expenses most notably included a 13% increase in selling, marketing and customer support costs to $14.3 million from $12.6 million.

Somero declared a final dividend to shareholders of 17.8 cents, taking the full-year dividend to 27.8 cents, down 10% from 31.0 cents in 2021.

The company also declared a supplemental dividend of 7.7 cents per share, paid together with the final dividend of the year, owing to the ‘strength of the company’s cash position’. However, a year before, Somero paid a supplemental dividend of 19.7 cents, so the 2022 version is down 61%.

Net cash fell 20% to $33.7 million on December 31 from $42.1 million a year earlier.

Chief Executive Officer Jack Cooney stressed its 2022 results marked ‘an outstanding year’ for Somero.

‘The company reported record revenue, just surpassing the extraordinary levels we achieved in 2021. Europe and Australia made substantial contributions, each achieving their own record revenue totals,’ said Cooney.

‘These excellent results were made possible by our talented, dedicated employees who worked hard to overcome persistent supply chain challenges to reliably deliver equipment and meet customers’ needs, an accomplishment that sets Somero apart from other equipment suppliers in the industry.’

Looking ahead, Somero said 2023 revenue is likely to be comparable with 2022, while expecting 2023 working capital investment to remain elevated.

Cooney continued: ‘On the basis of the investments we have made and the company’s continued financial strength, we believe the company is positioned well to capture future growth from new products and in international markets for years to come.’

Somero said it maintained its positive outlook based on the ‘healthy, active’ US non-residential construction market, positive momentum in Europe and Australia, and via opportunities for growth from new products.

Year-end 2023 cash is expected to be comparable with 2022, while it expects operating increases above its traditionally targeted $2.0 million.

Shares in Somero were up 3.9% to 382.66 pence each in London on Wednesday after midday.

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