REG - Hercules Site Svcs - Disposal of Suction Excavator Business

Hercules Site ServicesAnnouncement

11/02/2025 07:15

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RNS Number : 5783W  Hercules Site Services PLC  11 February 2025

11 February 2025

 

Hercules Site Services plc

("Hercules" or the "Company")

 

Disposal of Suction Excavator Business

 

Transformational change for business as significantly reduced debt
levels will result in higher profit before tax and improved earnings per
share

 

 

Hercules Site Services plc (AIM: HERC), a leading technology enabled labour
supply group for the UK infrastructure and construction sectors, is pleased to
announce that it has successfully divested its Suction Excavator business,
delivering on the strategy set out by the Company in the announcement dated 6
January 2025 (the "Disposal").

 

The Company's Suction Excavator subsidiary has been sold to SNC Holdings (NW)
Limited, for a total cash consideration of £2.4m. The divestment will
materially reduce the Company's debt and lease liabilities by approximately
£9m immediately. The Suction Excavator business accounted for 88% of
Hercules' borrowings but less than 5% of its revenue in the Company's
financial statements ended 30 September 2024 ("FY24").

 

The Company expects free cash flow to increase following the Disposal,
enabling the Company to dedicate greater resources to delivering its strategy
to capitalise on the high-growth opportunities available to Hercules' core
Labour Supply business, as the UK carries out a series of substantial
construction and infrastructure upgrades within the nuclear, power and energy
distribution, aviation, water, and rail sectors.

 

Cash generated from the Disposal and associated debt reduction will support
the Company's ongoing acquisition strategy. Furthermore, the Disposal will
also help deliver increased profit before tax and improved earnings per share.
In addition, the Disposal will streamline the business and simplify the
Company's market position as a trusted supplier of skilled operatives for the
many projects being delivered across the UK infrastructure and construction
sectors.

 

In FY24, the Suction Excavator subsidiary generated revenue of £6.0m and a
loss before tax of £0.4m (on a consolidated basis, the business had revenue
of £5.055m and an adjusted loss of £1.3m). As at 30 September 2024 the
subsidiary had a gross asset book value of £11.8m and net asset value of
£2.2m.

 

Brusk Korkmaz, CEO of Hercules, said: "This is a hugely positive development
for Hercules. As the UK carries out substantial construction and
infrastructure upgrades within the nuclear, power and energy distribution,
aviation, water, and rail sectors, our core Labour Supply business will now
have greater resources to execute our strategy in these high-growth areas.

 

"This Disposal gives the Company a clearer identity and we are laser-focused
on growth in our core sectors and strengthening our balance sheet. We expect
our earnings per share and profit before tax to be enhanced for the benefit of
shareholders."

 

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which has been incorporated into UK law by the European
Union (Withdrawal) Act 2018.

 

 Hercules Site Services plc                                                         c/o SEC Newgate

 Brusk Korkmaz (CEO)

 Paul Wheatcroft (CFO)

 SP Angel Corporate Finance LLP (Nominated Adviser and Broker)                 +44 (0) 20 3470 0470

 Matthew Johnson / Adam Cowl (Corporate Finance)

 Grant Barker / Rob Rees (Sales and Broking)

 Cavendish Capital Markets Limited (Joint Broker)                              +44 (0) 20 7397 8900

 Adrian Hadden / Charlie Combe / Dale Bellis (Sales and Broking)

 SEC Newgate (Financial Communications)                                       +44 (0) 20 3757 6882

 Elisabeth Cowell / Ian Silvera / Nina Renata Pop                  Hercules@secnewgate.co.uk

 

 

 

 

 

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