Hercules Site Services plc (LON:HERC) Chief Executive Officer Brusk Korkmaz and Chief Financial Officer Paul Wheatcroft caught up with DirectorsTalk for an exclusive interview to discuss its latest trading update, record-breaking growth, raising £8 million and the huge opportunities for the business.
Q1: Hercules Site Services provided a trading update for the year ended 30th September 2024, Brusk, this sounds like another really impressive update. Could you just take us through it?
A1: Obviously, we can’t get into too much before our full year results are issued next year, which is going to be, I think, on the 13th of January, but it’s a very, very positive statement, a record year for us.
The main headline is that we expect to hit revenues of more than £105 million for the year ended September 2024. This is a record for Hercules Site Services and a 24% increase on the prior year where we saw sales of £84.7 million. It’s also a personal milestone for us, for me.
I started the business 16 years ago from a family spare bedroom and to hit £100 million, I never thought that we could achieve that, I never dreamt of it those days but yes, amazing. Now the sky is the limit.
Q2: Paul, it’s another set of impressive numbers, what does it mean for the market and for the business?
A2: It means that we’re beating market expectations again, not just on revenue, but on adjusted EBITDA and PBT as well. The consensus from analysts for a financial year 2024, which is ending September, for revenue was £95.1 million, the adjusted EBITDA was £4.5 million and PBT was £0.6 million.
So, as per the announcement, we think we’re well ahead of all of those numbers. In fact, each of the core divisions within the business has delivered or increased organic revenue to capitalise on the continued growth, which is in the infrastructure and construction sectors.
As Bruce mentioned just now, we’re expecting to report another record year, showing that, again, we’ve gone from growth to more growth.
Q3: Brusk, the company recently raised £8 million, could you just update the viewers on the reasons behind that and any potential plans?
A3: As we mentioned recently, the company raised £8 million through a placing and a subscription. This fundraising shows strong confidence in Hercules Site Services as we work to strengthen our balance sheet and seize market opportunities.
As you are aware, there is £750 billion investment earmarked in the infrastructure sector. On top of that, the government recently announced 300,000 more homes to be built every year over the next five years and also, there are huge other energy projects starting, Sizewell C,, Net Zero Teesside and Merseyside.
So, huge, huge opportunities for the business to even grow further. We are well-placed in the market, we’ve got a great position with amazing blue-chip companies that we work for and with the skill shortage in the UK as well.
Companies like us are bound to grow because we do supply people to the sites and we also upskill and cross-skill our workforce, as well, so yes, we are well-placed in the market.
Q4: Paul, in summary, how would you describe the announcement?
A4: We’re absolutely thrilled to have delivered growth well ahead of the market’s expectations this year. Once again, reaching new record highs and adding to our own proven track record of achieving significant year-on-year growth.
We’ve got a great team and this is testament to the team’s ability to successfully seize exciting organic growth opportunities, such as our entry into new labour supply markets and the highly acclaimed launch of the Hercules Construction Academy, which we launched at the end of January, and to execute the opportunities presented through our recent M&A.
So, we think we’ve got a lot to look forward to in 2025. Watch this space.
