Expansion of Suction Excavator Fleet

RNS Number : 4825I

Hercules Site Services PLC

19 April 2022

 

19 April 2022

Hercules Site Services plc 

("Hercules" or "the Company")

Expansion of Suction Excavator Fleet

Hercules Site Services plc (AIM: HERC), a leading technology enabled labour supply company for the UK infrastructure sector, announces it has agreed to acquire an additional ten suction excavators for a total consideration of approximately £4.5m. Hercules is experiencing high levels of demand for its suction excavator services which complement the Company's core labour supply business. Suction excavators can safely and efficiently excavate significant quantities of materials or debris, while reducing the risk of service strikes.

The Board of Hercules believes this decision will help accelerate Hercules' overall growth plans in a key area for the Company by expanding its fleet of suction excavators from 20 vehicles by August 2022 to 30 vehicles by March 2023. The additional units will be 90% funded by conventional asset finance, in line with the Company's other suction excavator orders, with the balance being satisfied from existing cash resources. The purchase will mean that Hercules has one of the largest suction excavator fleets in the UK, with a strong and well-diversified client base in this area of business. Hercules' current suction excavators have a high average utilisation rate of 85%.

Demand for the Company's fleet can be partly attributed to the significant industry acclaim it has received for its involvement in implementing the newly developed 'Zero-Trim' piles method, which uses a vacuum excavator to suck out excess concrete from a pile while still wet. Traditionally, the concrete is overpoured and then site teams have to trim the excess concrete, which can cause health problems, including hand-arm vibration syndrome, hearing loss and silicosis. The 'Zero-Trim' method has been successfully rolled out onto the HS2 project and Hercules has won three awards over the past 12 months, in conjunction with its partners, including the award for health, safety and wellbeing initiative of the year at The British Construction Industry Awards 2021.

Hercules CEO Brusk Korkmaz said: "Due to their high utilisation rates and a favourable tax regime thanks to the UK government's super-deduction tax incentive for business investments, we wanted to build on the strong momentum in this area of the business and cement Hercules as a leading provider of UK-wide suction excavator services.

"We have also noted the construction industry's aim to reduce utility strikes, which cost the industry hundreds of millions in indirect costs each year. Despite only entering the sector just over a year ago with two suction excavators, Hercules has rapidly gained industry acclaim for delivering much-needed innovation and has subsequently expanded to become one of the market leading suppliers of operated suction excavators in the UK.

"Our strong relationships with existing and new clients have enabled us to identify significant future demand for suction excavator services and we believe this demand is also underpinned by UK government commitments on infrastructure spending and the desire to improve health and wellbeing on site, which our techniques are proven to deliver."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. 

Enquiries

Hercules Site Services plc Brusk Korkmaz (CEO) Paul Wheatcroft (CFO)	c/o SEC Newgate
SP Angel (Nominated Adviser and Broker) Matthew Johnson / Adam Cowl / Harry Davies-Ball (Corporate Finance) Grant Barker / Rob Rees (Sales and Broking)	[phone]
SEC Newgate (Financial PR) Elisabeth Cowell / Ian Silvera / Max Richardson	[phone] [e-mail]

About Hercules Site Services plc

Hercules is a leading tech enabled labour supply company for the UK infrastructure sector. Founded in 2008, Hercules has an established track record of profitability and fast-growth and has built a blue-chip customer base which includes Balfour Beatty, Costain, Kier, Skanska, Dyer & Butler and Volker Fitzpatrick. The Company has been appointed to provide labour for a range of high-profile infrastructure projects, such as HS2, due to its agile, innovative, digital first approach and complete service offering. It is well-placed to benefit from any government increase in infrastructure spending and its experienced management team has identified multiple opportunities for growth.

 

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