Hercules Site Services (LON:HERC), a tech-enabled labour supply company, continues to impress with its strong performance and promising growth prospects. Founded in 2008 by CEO Brusk Korkmaz, the company has swiftly evolved into a key player in the UK infrastructure sector. Its ability to provide skilled labour and construction services has established Hercules as an indispensable partner for high-profile projects, including the HS2 rail network and the Sizewell C nuclear power plant.
With a revenue CAGR approaching 50% in recent years, Hercules shows no signs of slowing down. The company reported that its revenue for FY24 is expected to exceed £105 million, a significant leap beyond earlier forecasts. Peter Renton, Co-Head of Research at Cavendish, highlighted the company’s achievements, stating, “The group’s proven track record, highly experienced management team, and favourable industry backdrop support our view that Hercules remains attractively valued.”
Driving Growth in Labour Supply and Construction Services
Hercules derives approximately 75% of its revenue from its Labour Supply division, which focuses on providing skilled workers to infrastructure projects across the UK. The company has embraced technological advancements, launching mobile applications to streamline recruitment and onboarding processes. These innovations have been transformative, with around 80% of workers now sourced through Hercules’ proprietary job app.
Meanwhile, the Construction Services division, accounting for the remaining 25% of revenue, has been instrumental in managing civil engineering projects and operating one of the UK’s largest fleets of suction excavators. The division is well-positioned to benefit from rising investment in water infrastructure, driven by Ofwat’s AMP framework.
Max Hayes, Research Associate at Cavendish, emphasised the company’s strategic foresight: “Hercules’ ability to expand into complementary areas like skills training through its Nuneaton academy demonstrates its agility and commitment to addressing the UK’s skills gap. This agility positions the company to capitalise on opportunities in a growing infrastructure sector.”
A Robust Financial Position Fuels Future Growth
Hercules has also taken significant steps to fortify its financial position. Following a successful £8 million share placing in September 2024, the company is better equipped to pursue organic and inorganic growth opportunities. Its pro forma net debt position of £6.9 million marks a substantial improvement, giving the company the flexibility to explore strategic acquisitions and partnerships.
Cavendish analysts have set a 12-month price target of 70p for Hercules’ shares, representing a potential upside of 62% from the current price of 43.3p. This valuation reflects the company’s robust growth potential and its ability to adapt to the evolving demands of the infrastructure sector.
On a Final Note
Hercules Site Services stands out as a leader in the UK construction and infrastructure sector, combining innovation with strategic vision. Under the leadership of Brusk Korkmaz and backed by a talented team, the company continues to solidify its position as a trusted partner for major infrastructure projects. As Cavendish notes, the favourable industry backdrop and Hercules’ entrepreneurial approach promise a bright future for this dynamic company.
