Somero Enterprises, Inc. (LON:SOM) & Eagle Eye Solutions Group (LON:EYE) make me happy

A couple of positive trading updates in two UK portfolio companies over the past two days. If only I could say the same about my Australian holdings, sigh... At least most of our money is safely on the sidelines waiting for the right family home.

Somero delivered yet another earnings upgrade for the year and is now guiding US$133 million in revenue (+50%) and US$48 million of EBITDA (+83%). This business gushes cash and is projecting an 18% rise in net cash to US$42 million despite paying well over US$20 million in dividends during the year. The stock trades on a forward PER of 12.4, dominates its niche of laser guided concrete screeds and has an attractive growth runway given the trend towards larger and more automated warehouses.

Eagle Eye is not cheap at 6.6 times historical sales of which 76% are recurring. Revenue is up 40% to £15.1 million for the first half of FY 22 and EBITDA rose 50% to £3.1million. The company provides a marketing platform for large retailers to run their digital loyalty and promotion schemes. Customers include Woolworths in Australia, Loblaws in Canada, one of the largest grocery retailers in the US (undisclosed) and Sainsbury's in the UK. Excitingly, Eagle Eye is gaining traction in the US and announced its fourth US customer today. The market opportunity is vast, Eagle Eye earns both SaaS and transactional revenue and its solution is an integral part of the marketing function of its enterprise customers. Actually, 6.6 times sales doesn't seem so expensive after all.



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