TIDMHERC
RNS Number : 7010B
Hercules Site Services PLC
05 June 2023
The following amendment has been made to the 'Interim Results'
announcement released on 5 June 2023 at 07.00 under RNS No
5355B.
The third bullet point of the financial highlights now reads
"Adjusted EBITDA* increased by 73% to GBP1.127m (H1 2022:
GBP0.650m)".
All other details remain unchanged. The full amended text is
shown below.
5 June 2023
Hercules Site Services plc
("Hercules" or "the Company")
Interim Results
Hercules Site Services plc (AIM: HERC), a leading technology
enabled labour supply company for the UK infrastructure sector, is
pleased to announce its unaudited interim results for the six
months ended 31 March 2023 ("H1 2023").
Financial highlights:
-- Revenue increased by 85% to GBP37.0m (H1 2022: GBP19.9m)
-- Gross profit increased by 71% to GBP6.9m (H1 2022:
GBP4.0m)
-- Adjusted EBITDA* increased by 73% to GBP1.127m (H1 2022:
GBP0.650m)
-- Interim dividend of 0.6p declared (H1 2022: 0.6p)
Operational highlights:
-- Further investment in people and procedures in H1 2023 has
prepared the business for expected growth in the second half of the
year ("H2 2023"), particularly labour supply and suction excavator
services
-- Labour supply to HS2 Phase 1 (northern section) has increased
to 400 operatives from 180 at 31 March 2022
-- Skills, Employment and Education Everything Portal has become
revenue generative
-- Now supplying labour to Taylor Woodrow, at the Exxon-Mobil
oil refinery expansion in Fawley, near Southampton
-- New clients secured during the period in the civil projects
division including Amey and SGN Ltd
-- Further fundraise completed, raising GBP1.7m to finance
continuing growth
-- Progress made in developing and planning the Hercules
Training Initiative
*Adjusted EBITDA definition - earnings before interest, tax,
depreciation, amortisation, profit/loss on sale of fixed assets,
exceptional items and R&D expenditure.
Brusk Korkmaz, Chief Executive Officer, commented:
"We are delighted to have delivered a positive start to the
year, with revenue growing by 85% and an increase in gross profit
of 71% over 2022 levels, whilst we continue investing in support of
further value creation in H2 2023.
"This success has been achieved through the continued labour
supply services ramp-up at the HS2 northern section, the addition
of new clients across all areas of our business and the delivery of
more suction excavators in the period.
"We are also very pleased to see that our Skills, Employment and
Education Everything Portal has become revenue generating,
demonstrating again that we are at the cutting edge of labour
supply and services innovation in the construction sector. The
addition of new clients, namely Amey and SGN, has also further
accelerated growth in our civil projects division.
"With this strong momentum in the construction and
infrastructure sectors, and a solid pipeline of new clients, we are
ideally placed to maintain the levels of growth we have delivered
in recent years and are on track to meet market expectations for
the full year."
Retail Investor Webinar
CEO Brusk Korkmaz and CFO Paul Wheatcroft will deliver a live
presentation regarding the Company's Final Results via the Investor
Meet Company platform today at 09.30am (BST).
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via the Investor
Meet Company dashboard up until 9.00am the day before the meeting
or at any time during the live presentation.
Although the Company may not be in a position to answer every
question it receives, it will address the most prominent within the
confines of information already disclosed to the market. Responses
to the Q&A from the live presentation will be published at the
earliest opportunity on the Investor Meet Company platform.
Investor feedback can also be submitted directly to management
post-event to ensure the Company can understand the views of all
interested parties.
Investors can sign up to Investor Meet Company for free and add
to meet Hercules Site Services plc via:
https://www.investormeetcompany.com/hercules-site-services-plc/register-investor
Investors who already follow Hercules Site Services plc on the
Investor Meet Company platform will automatically be invited.
For further information and enquiries, please contact:
Hercules Site Services plc c/o SEC Newgate
Brusk Korkmaz (CEO)
Paul Wheatcroft (CFO)
SP Angel (Nominated Adviser and Broker)
Matthew Johnson / Adam Cowl / Harry Davies-Ball
(Corporate Finance) +44 (0) 20 3470
Grant Barker / Rob Rees (Sales and Broking) 0470
Cenkos Securities Plc (Joint Broker)
Adrian Hadden/ Charlie Combe (Corporate Finance)
Alex Pollen (Sales) +44 (0)20 7397 8900
SEC Newgate (Financial Communications) +44 (0) 20 3757
Elisabeth Cowell / Ian Silvera / Matthew Elliott 6882
Hercules@secnewgate.co.uk
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.
Chairman's statement
Hercules continues to demonstrate its proficiency in the current
macro-economic environments, by delivering record growth in H1
2023. Revenues are 85% ahead of the comparative 2022 period and
trading is in line with expectations. We have experienced growth
across all areas of our business and in our core labour supply
division we have won new clients, ramped up deployment of
operatives across our cornerstone projects and launched new
specialisms.
Market dynamics remain strong
The infrastructure and construction sectors are experiencing
continued buoyancy providing a supportive backdrop for our growth,
and recent research demonstrates that this is continuing post
period end. According to S&P Global, new orders received by UK
commercial and civil engineering construction companies increased
for the third consecutive month in April, with leaders in the
sector anticipating a further increase in business activity during
the year ahead.
Given the labour shortages experienced by the sector, and the
effectiveness of our digital tools in placing operatives to jobs,
we are well placed to benefit from this growth in the months and
years ahead. Demand for our range of complementary services has
been strong and our pipeline is very robust.
Continued growth across all areas of our business
Labour supply
We provide labour to some of the top construction and
infrastructure projects in the country and this core business unit
has experienced continued growth in H1 2023, up 110% on H1 2022. A
key driver of this has been the multi-year HS2 Phase 1 (northern
section) contract, which is the largest construction project in
Europe. Our work on site continues to expand and we currently have
c. 400 Hercules operatives on site (H1 2022: 180). We are providing
additional labour every week in response to increasing demand,
leveraging our digital platform as a source of labour supply.
We have also been successful in winning significant new clients
in the period including SISK (we are now on their Preferred
Supplier List), Galliford Try Highways (now an approved supplier
with all of Galliford Try, not just environmental) and CHC Highways
(a Costain joint venture initially for a project on the A1(M)).
Looking ahead to H2 2023 and beyond, we are very pleased with the
significant pipeline of projects this segment of our business
enjoys.
Suction excavator services
The high utilisation we are experiencing for our suction
excavator fleet is extremely positive and is in line with that
reported for 2022. During the period, our revenues were up 49% year
on year, benefitting from an enlarged fleet. At the end of H1 2023,
we took delivery of 10 more units which will provide additional
growth into H2 2023 and beyond.
These recent acquisitions complete our fleet for the foreseeable
future, and our enlarged group of 30 vehicles makes us one of the
largest providers of suction excavator services in the UK.
We have supplied our suction excavator services to a number of
new clients during the period, including A2 Site Investigations
Ltd, Derryard Ltd, R & R Groundworks, Harris & Harris Civil
Engineering and Delta Simons.
Civil projects
Our civil projects team has responded brilliantly to what is a
huge level of demand for new infrastructure in the water treatment
sector. The team has had a very successful H1 2023, with GBP1.6m
additional revenue compared to H1 2022 (GBP5.1m), representing a
30% increase. New clients secured during the period include Amey
and SGN. The civil projects team continues to be very busy into H2
2023.
Digital
We have often spoken of the clear differentiation we have
achieved due to the strength of our proprietary apps, digital
capabilities and bespoke data. We are able to facilitate rapid,
local placement of operatives which means that we can provide
clients with more efficient and effective results.
During the period, we were delighted to announce that we are now
monetising our digital capabilities, which was an important
milestone for Hercules. In November 2022, we launched our skills
portal, the Skills, Employment and Education ("SEE") Everything
Portal, which was developed in conjunction with Balfour Beatty
Vinci Systra joint ventures on the HS2 rail project.
Following a successful trial, we are now receiving licence fees
and, while relatively small at the moment, the revenues are
recurring and we expect to announce further updates in the future
as we seek additional licensing opportunities across the public and
private sectors.
We believe that the SEE Everything Portal represents a highly
relevant proposition due to its ability to reduce the time and
resource spent coordinating, tracking, monitoring and validating
data on equality, diversity, inclusion, skills, employment and
education outputs on infrastructure and construction projects.
Contractors are increasingly required to demonstrate the SEE
impact of a project when entering into a tendering process
following the implementation of the Social Value Act (2012), and
our portal should make this a much simpler process for our
clients.
Interim dividend and timetable
The Board is pleased to declare an interim dividend of 0.6p per
share (2022: 0.6p). The interim dividend will be paid on 24 August
2023 to shareholders on the register at close of business on 25
July 2023. The shares will go ex-dividend on 24 July 2023.
Financial results show strategic progress in line with
expectations
Revenue for the period grew by 85% to GBP37,012,000 (H1 2022:
GBP19,958,000). Gross profit increased 71% to GBP6,903,000 (H1
2022: GBP4,046,000).
Adjusted EBITDA was GBP1,127,000 (H1 2022: GBP650,000). In line
with expectations, H1 2023 delivered growth in profits over H1
2022, particularly with the increased suction excavator fleet to 30
vehicles from 16 at the start of the period (H1 2022 increased from
9 to 13 vehicles), as well as further considerable labour supply
growth, particularly on the HS2 project. The growth in
administrative expenses over H1 2022 is expected to level off now
the final 10 suction excavators have been delivered.
Basic profit /(loss) per share improved to GBP0.006 (H1 2022
(GBP0.006)).
GBP2,576,000 cash was held at 31 March 2023 (H1 2022:
GBP1,650,000). In March 2023, the Company raised GBP1.7m (gross)
from a new share issue to aid working capital to fund continuing
organic growth in the labour supply division.
Outlook
I am remarkably proud of the significant contributions made by
the team in H1 2023, building on the track record of growth that
has been delivered by Hercules since inception. The Company's
financial performance is traditionally H2 weighted, and we are
pleased with trading to date.
Between now and the year end, we look forward to executing on
our current pipeline and delivering on our strategy. We continue to
advance our training academy plans, which represents a medium-term
objective for the business, and to nurture a range of opportunities
to achieve additional scale for the Company.
With demand for our services expected to remain strong given the
market backdrop, we look forward to the remainder of the year with
confidence and updating shareholders along the way.
Henry Pitman
Non-executive Chairman
Hercules Site Service PLC
Condensed Statement of Comprehensive Income
6 Months Ended 31 March 2023
Unaudited Audited Unaudited
6 months 6 months
to Year ended to
31-Mar-23 30-Sep-22 31-Mar-22
GBP000 GBP000 GBP000
Revenue 37,012 49,549 19,958
Cost of sales (30,109) (39,770) (15,912)
Gross profit 6,903 9,779 4,046
Recurring administrative
expenses (5,776) (7,470) (3,396)
Adjusted EBITDA 1,127 2,309 650
Non-recurring administrative
expenses (15) (471) (414)
EBITDA 1,112 1,838 236
Depreciation (760) (1,034) (452)
R&D expenditure 5 (37) (3)
Share based payment provision 0 (40)
Profit/Loss on sale of fixed
assets (26) (21) 6
---------- ----------- ----------
Operating Profit/(Loss) 331 706 (213)
Finance costs (577) (545) (170)
---------- ----------- ----------
Profit/(Loss) before tax (246) 161 (383)
Taxation 596 160 260
Total comprehensive
profit/(loss) for the period 350 321 (123)
========== =========== ==========
Earnings per share:
Basic earnings/(loss) per
share (GBP) 0.006 0.577 (0.006)
Condensed Statement of Financial Position
31 March 2023
Unaudited Audited Unaudited
31-Mar-23 30-Sep-22 31-Mar-22
GBP000 GBP000 GBP000
Non-current assets
Property, plant & equipment 21,394 14,642 12,360
---------- ---------- ----------
21,394 14,642 12,360
---------- ---------- ----------
Current assets
Inventories 47 52 8
Assets at fair value through
profit or loss 0 0 312
Trade and other receivables 18,248 17,907 10,794
Current tax recoverable 83 83 83
Cash and cash equivalents 2,576 1,211 1,650
---------- ---------- ----------
Total current assets 20,954 19,253 12,847
---------- ---------- ----------
Total assets 42,348 33,895 25,207
========== ========== ==========
Equity and liabilities
Share capital 62 59 59
Share premium 5,002 3,417 3,417
Share based payment reserve 40 40 0
Retained earnings 3,485 3,322 3,264
---------- ---------- ----------
Total equity 8,589 6,838 6,740
========== ========== ==========
Non-current liabilities
Deferred tax liabilities/(assets) (309) 287 188
Lease liabilities 15,346 10,879 9,317
---------- ---------- ----------
Total non-current liabilities 15,037 11,166 9,505
---------- ---------- ----------
Current liabilities
Trade and other payables 6,187 7,005 3,534
Provisions 309 305 325
Borrowings 8,686 6,529 3,142
Lease liabilities 3,540 2,052 1,961
---------- ---------- ----------
Total current liabilities 18,722 15,891 8,962
Total liabilities 33,759 27,057 18,467
Total equity & liabilities 42,348 33,895 25,207
========== ========== ==========
Condensed Statement of Changes in equity
6 Months Ended 31 March 2023
Share capital Retained earnings Total equity
(Unaudited) (Unaudited) (Unaudited)
GBP000 GBP000 GBP000
At 1 October 2021 as
previously stated 50 3,387 3,437
New share capital 9 0 9
Share premium 3,417 0 3,417
Total comprehensive loss
for the period 0 (123) (123)
Balance at 31 March 2022 3,476 3,264 6,740
============== ================== =============
Share capital Retained earnings Total equity
(Unaudited) (Unaudited) (Unaudited)
GBP000 GBP000 GBP000
At 1 October 2022 as
previously stated 3,516 3,322 6,838
New share capital 3 0 3
New share premium 1,585 0 1,585
Dividend paid 0 (187) (187)
Total comprehensive profit
for the period 0 350 350
Balance at 31 March 2023 5,104 3,485 8,589
============== ================== =============
Condensed Statement of Cash Flow
6 Months Ended 31 March 2023 Unaudited Audited Unaudited
6 months 6 months
to Year ended to
31-Mar-23 30-Sep-22 31-Mar-22
GBP000 GBP000 GBP000
Cash flows from operating activities:
Profit/(loss) for the period 350 321 (123)
Listing costs 0 443 414
Taxation charge (596) (160) (260)
Finance costs 577 545 170
Fair value movements 0 (1) (40)
Share based payment charge 0 40 0
Depreciation expense 760 1,034 452
Profit/(loss) on disposal of property,
plant & equip 26 21 (6)
Increase in trade and other receivables (340) (9,614) (2,502)
Decrease/(increase) in trade and
other payables (812) 2,530 (207)
Decrease/(increase) in inventories 5 (50) (6)
---------- ----------- ----------
Cash absorbed by operations (30) (4,891) (2,108)
Tax (paid)/received 0 0 0
---------- ----------- ----------
Net cash absorbed by operating
activities (30) (4,891) (2,108)
---------- ----------- ----------
Cash flows from investing activities:
Purchase of property, plant and
equip (282) (228) 277
Proceeds on disposal of property,
plant and equip 55 241 199
Proceeds on disposal of other assets 0 272 0
Interest received 0 4 0
---------- ----------- ----------
Net cash flows from investing
activities (227) 289 476
---------- ----------- ----------
Cash flows from financing activities:
Interest paid (95) (232) (130)
Dividends paid (187) (385) 0
Payment of lease liabilities (1,630) (1,407) (1,029)
(Repayment)/Drawdown of bank borrowings 1,946 3,389 (37)
Share issue proceeds 1,700 4,000 4,000
Share issue costs (112) (574) (574)
Listing costs 0 (443) (414)
Amounts advanced/(repaid) on parent
company loan (1) 0 1
---------- ----------- ----------
Net cash inflow from financing
activities 1,621 4,348 1,817
---------- ----------- ----------
Net (dec)/inc in cash and cash
equivalents 1,364 (254) 185
Cash and equivalents at start of
period 1,212 1,465 1,465
Cash and equivalents at end of
period 2,576 1,211 1,650
========== =========== ==========
Cash and equivalents at end of
period comprises:
Cash at bank and in hand 2,576 1,211 1,650
========== =========== ==========
Notes
1. Notes to the Financial Information
Basis of preparation & accounting policies
The interim financial information for the six months ended 31
March 2023 is unaudited and was approved by the Board of Directors
on 2 June 2023.
The interim financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the financial statements for the
year ended 30 September 2022.
The interim financial information for the six months ended 31
March 2023, including comparative financial information has been
prepared on the basis of the accounting policies set out in the
last annual report and accounts.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expense. Actual results
may subsequently differ from those estimates.
In preparing the interim financial statements, the significant
judgements made by management in applying the Company's accounting
policies and key sources of estimation uncertainty were the same,
in all material respects, as those applied to the financial
statements for the year ended 30 September 2022.
Going Concern assumption
The Company meets its day to day working capital requirements
through its cash balance.
Consequently, after making enquires, the Directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis of
accounting in preparing the interim financial statements.
Information extracted from the Company's 2022 Annual Report
The financial information for the year ended 30 September 2022,
as set out in this report, do not constitute statutory accounts but
are derived from the statutory accounts for that financial
year.
The statutory accounts for the year ended 30 September 2022 were
prepared under IFRS and have been delivered to the Registrar of
Companies. The auditors reported on those accounts. Their report
was unqualified, did not draw attention to any matters by way of
emphasis and did not include a statement under Section 498(2) or
498(3) of the Companies Act 2006.
2. Earnings per share
The calculation of earnings per share is based upon the
profit/(loss) after tax for the respective period. The weighted
average number of ordinary shares used in the calculation of basic
earnings per share is based upon the number of ordinary shares in
issue in each respective period.
3. Significant Capital Purchases
14 new suction excavators were purchased in H1 2023, at a
capital cost of GBP7.0m. The excavators were received in time to
qualify for the Super tax deduction before it expired, and were all
financed by 90% conventional asset funding, with repayment over 7
years at fixed interest rates.
4. Share capital
62,427,984 ordinary shares were in issue at 31 March 2023
(58,650,206 31 March 2022)
5. Availability of interim results
The interim results will not be sent to shareholders but will be
available at the Company's registered office at Hercules Court,
Lakeside Business Park, Broadway Lane, South Cerney, Cirencester
GL7 5XZ and on the Company's website:
www.hercules-construction.co.uk .
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END
IR UPUCGQUPWGAA
(END) Dow Jones Newswires
June 05, 2023 11:17 ET (15:17 GMT)
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