Hercules sucks up more new business
(), a technology- enabled labour supply company for the UK infrastructure sector, has 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.
The initial order is for up to £2m, and the agreement will be reviewed every three years or earlier if necessary. Hercules' CEO, Brusk Korkmaz, said that the agreement is in line with the company's objective of maintaining a high utilisation rate across its suction excavator fleet.
This deal follows Hercules' announcement that it is expecting further deliveries of suction excavators in March, increasing the company's fleet from 20 to 30 suction excavators. Suction excavators 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.
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News of this contract lifted Hercules’ shares 2.5%, and comes as another endorsement of its strategy which has seen it selected to work with blue-chip customers across major infrastructure projects including HS2.
Hercules’ core business is in fact as a supplier of skilled construction labour, which it manages via a leading edge digital platform, which contributes around two thirds of revenues, with Civil Projects around a quarter and Suction Excavator Services the final 7.5%.
The company listed just over a year ago, and maiden full-year results released in January demonstrated that the company had hit its stated objectives since coming to market, delivering year-on-year revenue growth of 51% to £49.5m, 10% ahead of broker SP Angel’s forecast and with sales accelerating throughout the year.
Investment in the business and higher costs associated with energy and labour meant adjusted Ebitda was marginally down year on year at £2.3m. But the investment leaves it well positioned as it expands its offering, for example via a move into site security and white collar recruitment.
Hercules also appears to be in the sweet spot of the government’s plans to improve the UK’s infrastructure, with £600bn committed to projects over the next 5 years. One of the biggest issues faced by the construction industry in recent years has been a shortage of skilled labour, which adds another opportunity for the company as it develops a network of training academies.
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