Infrastructure specialist Hercules Site Services (HERC) said in an update today that trading for the six months ended 31 March 2023 had been in line with market expectations for the full year to 30 September 2023
It says revenue is expected to be over £37 million for the first six months of the current financial year an increase of around 85% on the six months to 31 March 2022, when it generated sales of £19.9m. It said that the growth had been seen across the business, driven by substantial demand in the infrastructure sector.
Brusk Korkmaz, Chief Executive Officer, commented: "During the period we have delivered strong revenue growth, new clients and opened doors to exciting new sales opportunities. While we are not immune to inflationary pressures, with trading in line with expectations, and strong momentum being experienced in the construction and infrastructure sectors, we look forward to the next six months with confidence."
Hercules interim results will be announced on 5 June 2023.
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Since listing in early 2022, Hercules has been quietly delivering on its strategy to become a trusted partner to blue chip construction groups across major infrastructure projects. These include HS2 as part of Balfour Beatty Vinci Systra joint venture, where it operates as part of the Labour Desk
Hercules’ core business is the supply of skilled construction labour, which it manages via a leading-edge digital platform, and which contributes around two thirds of revenues. It’s been expanding its recruitment division into site security and white-collar roles, as well as rolling out training academies to help tackles the labour shortages across the construction industry.
Elsewhere, Civil Projects make up around a quarter of sales, after 50 new contract wins in 2022, with Suction Excavator Services the final 7.5%. In March, it agreed a deal with construction group Amey to be its sole supplier of suction excavator services to the National Highways Area 7 (East Midlands) contract for a period of three years.
That should help it maintain a utilisation rate of more than 85% across its expanded fleet of 30 excavators, which use high powered fans to suck debris from holes, making construction safer by reducing the risk of utility strikes and cheaper by reducing manpower needs.
The UK government has committed £600bn to infrastructure projects over the next 5 years, which bodes well for continued strong trading at the company as it continues to invest in growth, including potential strategic acquisitions.
Broker SP Angel has a price target of 80p on the shares, more than double the current price.