Hercules Site Services to offload suction excavator business

The AIM-traded firm said the decision reflected a strategic shift to concentrate on the company's core labour supply operations, which it said were well-positioned to capitalise on significant growth opportunities in the UK’s infrastructure upgrade programs.

In the financial year ended 30 September, the suction excavator business accounted for less than 5% of group revenue, but contributed 88% of consolidated debt, excluding invoice discounting.

The proposed divestment was expected to substantially reduce debt levels, improve free cash flow, and enhance profitability.

Hercules said it anticipated the move would lead to higher profit before tax, improved earnings per share, and stronger shareholder returns.

By divesting the non-core suction excavator business, Hercules said it aimed to reinforce its position as a trusted provider of skilled labour for large-scale UK infrastructure projects across sectors such as rail, roads, water, power, nuclear energy, and airports.

The results of the suction excavator business would be presented as discontinued operations in the group's 2024 financial results, which were scheduled for release on 13 January.

At 1249 GMT, shares in Hercules Site Services were up 6.07% at 44.55p.

Reporting by Josh White for Sharecast.com.