NuGen Properties

Hercules turnover tops £80m

For the year ended 30th September 2023 Hercules Site Services turned over £84.7m (2022: £49.5m) and made a pre-tax profit of £641,321 (2022: £160,685).

The results were for the company’s first full year of trading since its February 2022 listing on AIM, the alternative investment market of the London Stock Exchange.

Roughly three-quarters of the revenue, £63.8m, came from the core business of supplying site labour to construction sites, up from £33.3m the previous year. But while revenue from labour supply nearly doubled during the year, the number of operatives  supplied rose by only a third, from 750 to 1,000, approximately.

Much of the increase is down to HS2, where Hercules’ labour supply increased to around 425 operatives on the Birmingham section, up from 280 the previous year.

Hercules Site Services also undertakes a certain amount of work on a subcontractor basis. Its Civil Projects turned over £15.6m in the year to end of September 2023 (2022: £12.4m), accounting for approximately 18% of company revenue for the year (2022: 25%).

A third revenue stream for the company is suction excavators. Taking advantage of the government’s super deduction tax relief scheme, Hercules bought 14 new vehicles last year to take its fleet to 30. As the new machines arrived, revenue from this division rose to £4.9m (2022: £3.6m) and fleet utilisation is currently running at around 75%.

Since the end of the financial year, Hercules has made its first corporate acquisition, buying a 60% stake in Future Build Recruitment Ltd for £1.25m in November 2023. This deal expands Hercules footprint into the white-collar recruitment market.

Non-executive chairman Henry Pitman said that the board was looking into further such deals. “With respect to further potential acquisitions, and partnership arrangements, we are progressing positively with a number of discussions and we look forward to updating the market at the appropriate time,” he said.

Founder and chief executive Brusk Korkmaz said: “2023 was a truly transformative year for Hercules. We saw significant growth across all areas of our business and we are delighted to have exceeded market expectations and achieved record revenue and EBITDA figures.

“As the infrastructure and construction sectors continued to face labour supply and skills shortages, we were able to deliver for our clients, including a range of blue-chip companies including Galliford Try, Balfour Beatty, Costain and Vinci. During the year, we also agreed a five-year contract with Balfour Beatty alongside numerous new contracts with both Thames and Anglian Water. The addition of these new contracts has further accelerated growth within both our Labour Supply and Construction Services divisions.”

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