Report
James Tetley

Divestment complete, refocused to enhance growth

Hercules has completed the transformational divestment of its Suction Excavators business. This transaction was trailed in January as management made the strategic decision to focus on high growth opportunities within the Labour Supply business, particularly across the UK infrastructure sector.

The Suction Excavators business has been sold to SNC Holdings (NW) limited for a total cash consideration of £2.4m. The transaction will materially reduce the Company’s debt and lease liabilities by c. £9m. In FY24, the business generated revenue of £6.0m and a loss before tax of £0.4m.

The result is a more focused group with high growth characteristics, a cash generative business model, and a strong balance sheet. Hercules now has greater firepower to execute its ambitious organic and acquisitive growth strategy

Recent results showed an impressive track record, with a revenue CAGR of 48% in the last 3 years – despite the economic backdrop. We note the attractive valuation and reiterate our forecasts with a 70p / share Fair Value.
Underlying
HERCULES SITE SERVICES PLC

Provider
Equity Development
Equity Development

​Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.

Analysts
James Tetley

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