Hercules Site Services revenue, earnings jump in 2023

Hercules Site Services reported a 71% jump in revenue in its final results on Monday, reaching a historic high of £84.7m.

The AIM-traded firm said gross profit surged 67% for the year ended 30 September, to £16.3m, while adjusted EBITDA reached an all-time high of £4.1m, a 79% increase year-on-year.

Pre-tax profit stood at £0.64m, showing substantial growth compared to the prior year's £0.16m.

Earnings per share rose 119% to 1.27p, while the company reported a healthy cash position of £4.2m at the end of the financial year, compared to £1.2m in 2022.

The board proposed a final dividend of 1.12p per share, consistent with 2022’s dividend.

On the operational front, Hercules said its labour supply workforce expanded to more than 1,000 operatives, up from 750 in 2022.

Labour supply to HS2's Birmingham section increased to 425 operatives, compared to 280 in the previous year.

The firm saw substantial growth in app downloads for recruitment and onboarding, with numbers surging to around 12,000 from 8,100 in 2022.

Notable new client wins included contracts with Balfour Beatty Rail, Galliford Try PSL, and Octavius.

Hercules said it secured a five-year contract with Balfour Beatty Rail through its ‘live tracks’ rail offering.

The company also secured new contract wins with Thames and Anglian Water, successfully completing numerous contracts throughout the year.

Since the end of the financial year, Hercules completed its first acquisition by acquiring Future Build Recruitment, expanding its presence in the white-collar construction market.

The construction of Hercules' training academy had meanwhile been finished, with plans for a launch in January.

Looking ahead, Hercules said it was committed to its growth strategy, supported by a strong project pipeline for 2024.

The company was well-positioned to capitalise on evolving trends in the infrastructure and construction sectors.

Hercules said it would continue to pursue a disciplined approach to mergers and acquisitions to drive further growth.

The launch of the training academy would enhance the company's ability to upskill its workforce and strengthen relationships within the construction and infrastructure industries.

“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,” said chief executive officer Brusk Korkmaz.

“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.”

Korkmaz said the addition of the new contracts further accelerated growth within both the company’s labour supply and construction services divisions.

“With our digital edge - total app downloads have now reached 12,000 - our new training academy and our recent acquisition of Future Build, Hercules is increasingly well prepared for the future and continues to ingrain itself into the heart of the UK infrastructure and construction market.”

At 1522 GMT, shares in Hercules Site Services were up 2.35% at 24.82p.

Reporting by Josh White for Sharecast.com.