Hercules Site Services Plc

Share Issue/Capital Change • Jan 20, 2022

National Storage Mechanism | Additional information

RNS Number : 0221Z

Hercules Site Services PLC

20 January 2022

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY ORDINARY SHARES OF HERCULES SITE SERVICES PLC (THE "COMPANY") IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. 

This announcement is an advertisement and not an admission document or a prospectus. This announcement is not and does not constitute or form part of, and should not be construed as, an offer of securities for subscription or sale in any jurisdiction nor a solicitation of any offer to buy or subscribe for, any securities in any jurisdiction, nor shall it or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This announcement does not constitute a recommendation regarding any securities. Prospective investors should not subscribe for or purchase any securities referred to in this announcement except in compliance with applicable securities laws and regulation and on the basis of the information in the final admission document ("Admission Document") which the Company intends to publish, and any supplement thereto, in connection with the placing ("Placing") of its ordinary shares ("Ordinary Shares") and the proposed admission ("Admission") of the Shares to trading on the AIM market of London Stock Exchange plc ("London Stock Exchange"). A copy of the Admission Document will if Admission proceeds, following publication, be available for viewing on the Company's website at www.hercules-construction.co.uk

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by SP Angel Corporate Finance LLP ("SP Angel") solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

20 January 2022

Hercules Site Services plc 

("Hercules" or "the Company")

Intention to Float on AIM

Hercules Site Services plc, a leading technology enabled labour supply company for the UK infrastructure sector, announces its intention to seek admission of its shares to trading on AIM, a market of the London Stock Exchange.

Hercules is seeking to raise approximately £5.5 million to rapidly deliver on the significant demand it is experiencing for its diverse range of services across the UK infrastructure sector, including to scale up its operations to supply labour to the northern section of the HS2 rail project from London to Birmingham. In addition, up to £4.5 million will be raised for the existing shareholder from the sale of part of its interest in the Company.

The Company is intending to raise new capital through the issue of Ordinary Shares to institutional investors by way of a Placing and UK retail investors through the PrimaryBid mobile app available on the Apple App Store and Google Play. PrimaryBid does not charge investors any commission for this service.

Highlights:

·    Hercules is a profitable and rapidly-growing labour supply company operating in the UK infrastructure sector with a strong pipeline of projects.

·    Founded in 2008, Hercules' agile, innovative, digital-first approach and complete service offering fills the gap in the market and has helped attract the Company's blue-chip client base including Balfour Beatty, Skanska, Costain and Kier.  

·    The Company has significant cross-selling capabilities. As well as labour supply, it provides complementary project delivery services and specialist plant hire (suction excavators) which can increase the total value from client relationships.

·    Hercules has a sustained track record of revenue growth from £9.7 million in FY 2015 to £30.7 million in FY 2019 and has experienced a strong rebound following Covid-19 growing to £14.0 million in H1 FY 2021.

·    Hercules has a compelling, growing market opportunity: nearly £650bn of investment is planned on UK infrastructure and construction projects over the next 10 years. This, combined with the current labour deficit, has resulted in workforce supply being given much higher importance on the industry's agenda.

·    The Directors believe Hercules is well-placed to gain market share as it is proven to attract a loyal workforce and blue-chip client base due to its award-winning app, digital capabilities and training/ health & safety focus, which the Directors believe differentiates it from the competition.

·    Hercules has a defined strategy with multiple growth opportunities, including organic expansion and market penetration of its existing businesses, the continued development of its data and analytics platform, and the integration of targeted acquisitions in what is a highly fragmented sector.

·    The Board intends to adopt a progressive dividend policy for the Company from Admission, which will seek to maximise shareholder value and reflect the Company's strong earnings potential and cash flow characteristics.

SP Angel Corporate Finance LLP is acting as Nominated Adviser and Broker to the Company in relation to the Placing and Admission.

Hercules CEO Brusk Korkmaz said: "We have built Hercules to become a leading labour supply business over the past 13 years and our digital first approach has helped us attract major construction businesses to our client portfolio.

"Our proven and rapid delivery track-record has led to our work with our long-standing partner, Balfour Beatty, on HS2; this is expected to significantly step-change our growth in the next 12 months and beyond.

"The demand for skilled labour is higher than ever before due to the multi-billion infrastructure commitments made by the UK government and we are experiencing unprecedented demand for our services.

"Therefore, having identified multiple exciting growth opportunities, and proven the fast-growth and profitable nature of our business model, we believe that this is the right time to pursue an AIM listing. We are excited at the prospect of welcoming investors to our growth journey."  

Enquiries

Hercules Site Services plc Brusk Korkmaz (CEO) Paul Wheatcroft (CFO)	c/o SEC Newgate
SP Angel (Nominated Adviser and Broker) Matthew Johnson / Adam Cowl / Harry Davies-Ball (Corporate Finance) Grant Barker / Rob Rees (Sales and Broking)	+44 (0) 20 3470 0470
SEC Newgate (Financial PR) Elisabeth Cowell / Ian Silvera / Max Richardson	+44 (0) 20 3757 6882 Hercules@secnewgate.co.uk

About Hercules Site Services plc

Hercules is a leading tech enabled labour supply company for the UK infrastructure sector. Founded in 2008, Hercules has an established track record of profitability and fast-growth and has built a blue-chip customer base which includes Balfour Beatty, Costain, Kier, Skanska, Dyer & Butler and Volker Fitzpatrick. The Company has been appointed to provide labour for a range of high-profile infrastructure projects, such as HS2, due to its agile, innovative, digital first approach and complete service offering.

It has a competitive advantage in a market which is experiencing a huge labour deficit on the back of Britain's exit from the EU and Covid-19. It is well-placed to benefit from any government increase in infrastructure spending and its experienced management team has identified multiple opportunities for growth.

Notes to Editors - Board Appointments

Henry John Pitman, Non-Executive Chairman

Henry Pitman has 30 years' experience building businesses in the UK and Africa. He is the current Executive Chairman of OPTIMISM Health Group and co-founder of African Century Group - an African investment group. Previously, he was founder and CEO at Tribal Group plc and a Non-Executive Director at Grainger plc.

Brusk Kivilcim Korkmaz, Chief Executive Officer

Brusk Korkmaz has worked in the construction industry for 20 years. Prior to founding Hercules in 2008, he held positions with MJ Gleeson, Black and Veatch and Hochtief UK, gaining experience across a range of civil engineering projects and labour supply for various sectors, including highways, rail, water industry and utilities. He is a member of the Institute of Civil Engineers and holds a BEng Honours Degree from University College London.

Paul David Wheatcroft, Chief Financial Officer

Paul Wheatcroft has spent 25 years as a Finance Director working in a number of industry sectors including construction, building materials, energy, wholesale, manufacturing. He joined the Company in February 2020 and brings with him significant business experience in M&A, raising finance and financial management. Previously, Paul was Finance Director in three subsidiaries of Hanson PLC for over 13 years, and Group Finance Director of Ecotricity Group, a green energy company for eight years, responsible in all these roles for financial, legal, HR and IT matters. Paul is a Fellow of the Chartered Institute of Management Accountants.

Ahmet Iplikci, Non-Executive Director

Ahmet Iplikci is currently a strategic board member at Banco Finantia, a Portuguese bank, and a partner at Noctua Partners Europe Limited, a multi-family office with offices in Miami, New York and London. He also sits on the advisory boards of British Chamber of Commerce in Turkey, Fuel Ventures, an early-stage venture capital firm in the UK, and Privcorp Private Equity that invests in Emerging and Frontier markets. Ahmet was a Senior Adviser to the Turkish Prime Minister's Office Investment Agency from 2010 to 2014 and Senior Adviser to the Kazakh Invest National Company JSC from 2018 to 2020.

Richard Anthony Kilner, Independent Non-Executive Director

Richard Kilner is a chartered civil engineer and a member of the Institution of Civil Engineers. Educated in South Africa, he has a B.Sc. degree in civil engineering. He has held a number of senior positions in construction and private equity and also has specific experience of property development, business process outsourcing and healthcare. He was a partner at 3i Group plc where he was involved in significant investments in Asia, the USA and Europe. Richard also spent five years (including a year as acting Chairman) as a Non-Executive Director of University Hospitals of Leicester NHS Trust. Richard is currently Non-Executive Director of AIM-listed Nexus Infrastructure plc.

Robin Stevens, Independent Non-Executive Director

Robin Stevens is a Chartered Accountant and is Head of Capital Markets at MHA MacIntyre Hudson LLP, the UK member firm of Baker Tilly International. He was formerly an audit and corporate finance partner, and Head of Capital Markets, of Crowe UK LLP, having held senior corporate finance and audit partner positions with Mazars LLP and MRI Moores Rowland LLP. Robin has had an extensive career in corporate finance including corporate advisory and reporting assignments, raising capital, management buyouts, capital reconstructions, and pre-flotation planning. He has also advised on acquisitions and disposals by public and private companies as well as many IPOs and secondary offerings in the UK and overseas. Robin is currently Non-Executive Chairman at AIM-listed Vector Capital plc.

Important Notices

SP Angel, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Placing and Admission. SP Angel will not regard any other person as its client in relation to the Placing and Admission and will not be responsible to anyone other than the Company for providing the regulatory protections afforded to its clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.

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