Hercules Site Services plc (LON: HERC), a leading technology enabled labour supply group for the UK infrastructure and construction sectors, has provided a strategic update relating to its proposed intention to divest its Suction Excavator business, as it is now a non-core activity.
In the 12 months to 30 September 2024, the Suction Excavator business amounted to less than 5% of the Group’s revenue, but 88% of its consolidated debt excluding invoice discounting. Therefore, the Proposed Divestment will materially reduce debt levels and increase the Group’s free cash flow. The Proposed Divestment will enable the Group to dedicate greater resources to deliver on its strategy to capitalise on the continued high-growth opportunities available to Hercules’ core Labour Supply business as the UK continues to carry out a series of substantial construction and infrastructure upgrades.
The Proposed Divestment, when completed, is expected to contribute to higher profit before tax, improved earnings per share, and enhanced returns for shareholders in the near future. In addition, Hercules expects this move to reinforce the Group’s market positioning as a trusted labour supplier of skilled operatives and trades for large scale UK infrastructure projects in rail, roads, water, power networks to nuclear energy and airports.
Reflecting the decision to sell the Suction Excavator business, in accordance with accounting standards, the Group’s forthcoming FY24 results will present the Suction Excavator business results as Discontinued Operations.
Notice of Results and Investor Presentation
Hercules Site Services’ FY24 results will be announced on Monday 13 January 2025.
