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(Sharecast News) - Somero Enterprises reported weaker-than-expected trading in the first quarter on Thursday, as elevated interest rates and growing macroeconomic uncertainty weighed on capital investment decisions in its core US non-residential construction market.
The AIM-traded firm said that, despite continued strong bidding activity and solid project backlogs, the timing of project starts and resumptions remained unclear, leading to reduced equipment demand.
International trade tensions and shifting US immigration policies added to the cautious sentiment.
In response, Somero said it had implemented a 15% reduction in its operational workforce and introduced tighter cost controls to help mitigate the profitability impact of lower sales volumes.
Customer-facing, administrative, and growth-focused functions remained unaffected by the cuts.
The company also revised its full-year guidance, now expecting revenue of approximately $105m and EBITDA of around $24m, down from previous market estimates of $113.6m and $28.6m, respectively.
Year-end cash was projected to be $28m, compared to the prior consensus of $31.2m.
"Somero has successfully navigated challenging market conditions many times before, and we are taking measured, proactive steps to do so again," said chief executive officer Tim Averkamp.
"Our flexible operating model allows us to respond decisively to near-term uncertainty while continuing to invest in product innovation and other strategic initiatives that underpin future growth."
Averkamp said the fundamental demand drivers in the company's core markets remained intact, adding that the firm believed the actions being taken now would position it to emerge stronger as conditions improved.
"Supported by a strong balance sheet, we remain focused on executing our growth strategy and are confident in Somero's long-term prospects."
At 1140 BST, shares in Somero Enterprises were down 16.49% at 204.6p.
Reporting by Josh White for Sharecast.com.