Hercules Site Services CEO & CFO discuss organic growth and new revenue streams (LON:HERC)

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 growing business in an exciting space, the launch of their Construction Academy, maintaining growth in 2024, what we can expect in the coming months, and why investors should choose Hercules.

Q1: Brusk, just starting with yourself. Following the 2023 National Infrastructure and Construction Pipeline, which sets out to spend for the next 10 years, you must be delighted to have a growing business in this space?

A1:  There is over £750 billion of planned investments in the infrastructure and construction sectors over the next 10 years, and £165 billion of this amount to be invested by 2025. Huge infrastructure projects are starting soon, such as Lower Thames Crossing, Net Zero Teesside, and more highways projects such as A66, A42 and A12.

Additionally, the water sector is set for an impressive phase with the start of the asset management programme, AMP8, from next April onwards, planning a spend of £98 billion, which is nearly double the current AMP7’s £51 billion.

The rail sector also has big plans with Network Rail’s investment programme, which is called Control Period 7, CP7, outlining a £44 billion of investment from next month, which is April 2024, over the next five years.

Additionally, the recent commitment by the UK government to major projects, including significant nuclear energy investment, such as Sizewell C in Ipswich, and Wylfa in Wales, alongside the development of 15 numbers of smaller modular nuclear reactors across the country, underscores a comprehensive strategy towards achieving self-sufficiency and infrastructure excellence.

Q2: What prompted the recent launch of the Hercules Construction Academy?

A2: As I’ve mentioned earlier, numerous significant projects are underway in the UK, however, the question remains, who will construct these projects? We as Hercules Sites Services are eager to be involved building these projects.

The recent launch of the Hercules Construction Academy was motivated by a crucial need to address the skill shortage in the UK’s infrastructure and construction sectors.  Our aim is not only to upskill and cross-skill our workforce, but also to train the UK’s future workforce. Our Academy offers more than just health and safety course, it’s a comprehensive educational focus on new construction methods and sustainability.

This approach shows that we are dedicated to making construction work greener, smarter, and more efficient. This shows a massive, huge commitment from us to fixing a current skill shortage and setting the stage for construction industry that’s more sustainable and advanced in technology.

Q3: Now, just turning to you Paul, your most recent set of results, they show that you continue to grow at pace. Do you think you can maintain that growth into 2024?

A3: Yes, as part of our long term strategic plan, we’ve chosen some key areas to focus on for the ‘23-24 financial year.

Just with organic growth, we’re confident of hitting our forecast to the market but we’re not ones to sit around, so we completed our first acquisition in December of last year, Future Build Recruitment. This will grow our offering in the white collar space in construction.

Our rail division goes from strength to strength, it’s only really started around October of last year, but going very well. And also, as Brusk has just mentioned, we’ve got the addition now of the Construction Academy, which opened its doors at the end of January.

So, we think we’ve got pretty exciting times ahead.

Q4: What else do you think the market can expect from you in the months and years ahead?

A4: Well, we’ve been anticipating the growth of nuclear in the renewables space for a year or two now, particularly since the government reclassified nuclear as renewables, and we’ll be actively pushing to be working on some of these major projects in the nuclear space.

Sizewell C in the Ipswich area is the big one, but there’s also likely to be a similar construction project in Wylfa in Wales, as well as lots of smaller mini reactors that’s likely to be built around the country as well, I think it’s probably 15 of them are planned.

So, there’s a huge potential for a company like us in this nuclear and renewable space in the month and years ahead, and again, we’re all pretty excited about this.

Q5: Just back to you, Brusk, why should investors choose Hercules Site Services?

A5: We believe that we are well positioned to grow over the next 10 years with the huge government investments in the UK construction and infrastructure markets.

Our business has developed into one of the UK’s top labour supply companies, providing the right people at the right time to our tier one client base, who have a strong pipeline of projects which needs to be delivered over the next 10 years.

We are already supplying a nuclear workforce for our clients and three months ago, like Paul said, we have acquired a company called Future Build Recruitment, who are experts of supplying white collar stuff to infrastructure and construction industries.

So, we believe that with the organic growth and with these new revenue streams, such as Future Build Recruitment, we are well positioned for investors to choose Hercules.

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