Somero lifts 2026 outlook as US construction demand improves

Somero's first half beats expectations

Somero Enterprises has delivered a better-than-expected first half of 2026, prompting the specialist construction equipment group to raise its full-year outlook.

The improvement was driven mainly by North America, Somero's largest market, where conditions in private non-residential construction continued to stabilise. Some projects previously delayed by concerns about tariffs, interest rates, immigration policy and geopolitical conflict have started moving forward.

Management now expects 2026 revenue to come in ahead of the market forecast in place before this announcement. Profit and operating cash generation are also expected to improve in line with revenue.

However, Somero has not disclosed revised numerical guidance. The upgrade also assumes second-half trading meets management's expectations, so investors should not treat the recovery as complete just yet.

The key numbers and dates

Item	Detail
Previous market revenue expectation for 2026	$86.0 million
Previous adjusted EBITDA expectation	$15.9 million
Previous adjusted profit before tax expectation	$13.5 million
Half-year results date	8 September 2026
Governance review update	21 July 2026

Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, excluding certain items management considers non-underlying. Adjusted profit before tax, or PBT, applies similar adjustments but includes depreciation, amortisation and financing costs.

Somero expects revenue to exceed the $86.0 million market forecast, with a corresponding improvement in profit and operating cash generation. The precise size of that improvement was not disclosed.

Why North America matters

North American trading is expected to show a significant improvement compared with the first half of 2025.

That is important because the US is Somero's largest market and has been the main source of recent weakness. Customers have become more active as market conditions stabilise, while some delayed construction projects are finally moving ahead.

There is an important qualification. The comparable period in 2025 was notably subdued by industry-wide macroeconomic disruption. Somero is therefore growing against a weak base, which makes the year-on-year improvement less surprising than it might initially appear.

Still, the update suggests the direction of travel has improved. Customers continue to report healthy project backlogs and stronger activity levels, while Somero's own backlog remained elevated throughout the first half. The company's backlog is traditionally very modest, so this provides useful near-term visibility.

Equipment demand is recovering

Demand for Somero's large-line Boom Screeds improved following three years of decline.

Boom Screeds are machines used to level and finish large concrete floors accurately. Their recovery is a useful indicator because these are significant equipment purchases that customers may postpone when construction markets are uncertain.

Management said demand benefited from steadier conditions and the introduction of two next-generation models:

• The S-22EZ+, launched in January 2026
• The S-15EZ, launched in July 2025

The Hammerhead Ride-on Screed, also launched in July 2025, continues to receive a positive customer response and is attracting new buyers.

Chief executive Tim Averkamp said the launches showed that Somero's investment in innovation was translating into revenue across the product range. For investors, this is encouraging because the improvement does not appear to be driven solely by a broader market recovery. New products are also making a contribution.

Progress outside the US is more measured

Trading improved in Somero's other key markets, although the gains were less pronounced than in North America.

Europe traded ahead of the first half of 2025 despite continuing macroeconomic and geopolitical headwinds, along with competitive pressure. The update does not quantify the improvement, so it is difficult to judge how meaningful the progress was.

Australian trading continued to normalise and improved moderately year on year.

The Rest of World division is expected to be broadly comparable with the prior-year period. Somero noted that the regions within this segment each contribute modest revenue, meaning results can be volatile from one reporting period to another.

This leaves the investment case particularly dependent on the durability of the North American recovery.

Parts and service remain an unfinished opportunity

Parts and service revenue is expected to be comparable with the previous year.

That is a slightly softer part of an otherwise positive announcement. Somero describes recurring revenue as a strategic focus, and parts and servicing can potentially provide a steadier income stream than new machine sales.

The company is implementing initiatives intended to increase recurring revenue over time, but there is no evidence of growth in the first half. No targets, investment figures or timetable for these initiatives were disclosed.

What investors should like

The clearest positive is the full-year upgrade. Revenue is now expected to beat the previous $86.0 million market forecast, with improved profit and operating cash generation alongside it.

There are several supporting factors:

• Activity has strengthened in Somero's core US market
• Previously delayed customer projects are beginning to move forward
• Demand for large Boom Screeds is recovering after three difficult years
• Recently launched products are contributing to sales and attracting new customers
• Somero's backlog remained elevated during the first half
• Europe and Australia also improved year on year

Cash generation is worth watching closely. A revenue recovery is more valuable when it converts into cash, and the Board expects operating cash generation to improve alongside profit.

What could still go wrong

Management is clear that market conditions remain uneven and that the stabilisation is at an early stage.

Customers are still cautious because of continuing macroeconomic and geopolitical uncertainty. Tariffs, interest rates, immigration restrictions and conflict have already delayed projects, and these pressures have not disappeared.

The full-year upgrade is also conditional on second-half trading meeting management's expectations. Investors have not been given a revised revenue or profit range, limiting visibility over the scale of the potential beat.

Other points to monitor include:

• The North American comparison benefits from a weak first half in 2025
• European markets continue to face competitive and economic pressure
• Parts and service revenue is not currently growing
• Rest of World revenue can be volatile
• The outcome of the governance review remains outstanding

Somero will publish a separate governance review update on 21 July 2026, following its commitment made on 17 June. The company provided no further detail on the review in this trading announcement.

The investor takeaway

This is a constructive update from Somero. Its largest market is improving, important equipment categories are recovering, and recent product launches appear to be gaining traction.

Most importantly, management now expects 2026 revenue, profit and operating cash generation to exceed previous market assumptions.

The unanswered question is how far ahead of expectations the company can finish. Revised numerical guidance was not disclosed, and management continues to describe the recovery as early and uneven.

Attention now turns first to the governance update on 21 July and then to the half-year results on 8 September, when investors should receive the financial detail needed to assess the strength and quality of Somero's recovery.