UK infrastructure was once the envy of the world – now it needs a radical overhaul.
Roads are clogged, trains are delayed, hospitals are overcrowded, homes are in short supply, water pipes leak and electricity networks can barely cope.
The Government has pledged to spend billions fixing these problems, and companies are under pressure to invest alongside – but projects demand manpower, and workers can be hard to find.
Industry insiders talk of a 250,000-strong shortfall, a gap that will need to be filled to progress our infrastructure. Hercules Site Services has developed a neat solution to help ease the problem.
Under smart-thinking chief executive Brusk Korkmaz, it has created an app that matches companies in search of workers with local labourers looking for work.
Subscribers are vetted beforehand and workers gain access to a variety of opportunities.
Smart-thinking: Hercules has created an app that matches companies in search of workers with local labourers looking for work
Construction firms, contractors and infrastructure specialists are big fans, using Hercules for projects ranging from HS2 and Sizewell C nuclear power station to motorway upgrades and station renovations. Water is a specialist area too, with Hercules subscribers involved in major projects across the country.
Hercules floated on the stock market three years ago at 50.5p. Sales and profits have grown consistently since then, repeatedly beating brokers’ expectations and workers registered on the app have more than doubled to 16,000.
Only last month, Korkmaz unveiled record results for the year to September, with underlying revenues up 28 per cent to £102 million, earnings up 43 per cent to £2.6 million and a strong pipeline of future projects.
Hercules also made its first acquisition last year with a white-collar business, offering site stewards, project managers, engineers and other professionals – a move that has already bolstered sales and should continue to do so.
Korkmaz has maintained the annual dividend at 1.72p because he is keen to do more deals, broadening his company’s offering, while retaining a focus on infrastructure work. Even without further acquisitions, analysts expect continued strong sales growth with profits climbing 30 per cent to £3.4 million in the current year and £3.7 million in 2026.
Consistent progress has sent the shares up to 53p, above the 42.5p price at which Midas recommended them but only marginally above their 2022 flotation price.
This seems unjust. Brokers believe the stock is worth at least 70p and should move towards that level this year.
Whatever the external environment, infrastructure is a cross-party priority, workers have a crucial role to play and Hercules makes it easy for workers and businesses to find the perfect match.
Midas verdict: Hercules shares have gained ground but there should be plenty more to come. Korkmaz and his firm have done everything that they promised at flotation and their work is gaining recognition. At 53p, existing shareholders should keep the faith.
Traded on: Aim Ticker: HERC Contact: hercules-construction.co.uk
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