IPO costs wipe out Hercules profit

Founder-director Brusk Korkmaz

Hercules Site Services, which suppliers labour to tier one construction contractors, listed on AIM, the alternative investment market of the London Stock Exchange, on 4th February, netting £4m for founder-director Brusk Korkmaz and £4m for the business.

Unaudited results for the six months to 31st March 2022, posted today, show half-year revenue increased 42% to £19.9m (2021 H1: £14.0m) and gross profit up 62% to £4.0m (2021 H1: £2.5m).

However, the bottom line shows a pre-tax loss of £383,000 (2021 H1: £739,000 profit), because of the £414,000  exceptional costs of the initial public offering.

During the period the company signed labour supply contracts with Kier, Tilbury Douglas and Mott McDonald Bentley. It also has 180 operatives working on HS2, which has been a big driver for the development of the business.

Hercules also runs a fleet of suction excavators. Four new vehicles were delivered in in the tun up to March 2022 and seven more are expected by the end of September.

“While our original plan was to double our suction excavator to 20 vehicles, post period end in April 2022, we took the decision to acquire an additional ten suction excavators, which will expand our fleet to 30 vehicles by March 2023. This will make it one of the largest fleets in the UK,” chief executive Brusk Korkmaz said. “We have supplied our suction excavator services to 21 new clients in the last six months and have embarked on a key new relationship with Wales and West Utilities. This is our first direct engagement with the main water companies, and the relationship is set to expand further as we receive additional vehicles.”

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Summarising the results, Brusk Korkmaz, who remains majority owner, said: “2022 has so far been a year of positive change for Hercules. As a trusted provider of services to the construction and infrastructure sectors, our company is well positioned to take advantage of the highly favourable market conditions in these industries. We are already executing on the exciting opportunities available to us and H1 2022 has seen us investing for growth, positioning Hercules to create value for all our stakeholders in the months and years ahead.

“We expect to deliver continued growth in H2 2022 through the ramp up of operatives on HS2, the delivery and monetisation of seven more suction excavators, and maintaining the significant momentum built up by the civil projects team.”

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