SMALL CAP SHARE IDEAS: Newly-listed Hercules Site Services

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I’m going to give you some numbers – some very big numbers – that may help provide a little context on a recently-listed company I spoke to a few weeks ago.It starts with the National Infrastructure and Construction Pipeline, which stands at £650billion over the next 10 years.

Of that, £200billion will be invested by 2024/25, supporting 425,000 new jobs.Projects such as HS2, upgrades to other parts of the struggling rail infrastructure and strategic roads upgrades will require an estimated 217,000 additional skilled construction workers in the period to 2025. Hercules Site Services finds, trains and supplies skilled staff for large civil projectsThat’s a nightmare if you are a civil engineering company scratching around for trained-up labour to man your sites.However, it’s the perfect storm if your job is to find, train and supply the workforce required to drive forward these landmark projects.This is exactly what does – it finds, trains and supplies skilled staff for large civil projects. RELATED ARTICLES Share this article Share The figures quoted above reveal the infrastructure sector is booming and likely to stay buoyant for the next decade.It’s a point not lost on Brusk Korkmaz, who has been in the construction industry for 20 years and founded Hercules in his spare bedroom in 2008.Last month, he listed the business on London’s AIM market, raising £4million for a market capitalisation of just under £30million.The proceeds will be used to build on the success to date, ensuring Hercules can take full advantage of some of the work on offer from clients such as Balfour Beatty, Keir and Thames Water.Stepping back, the group supplies the full gamut of site workers. So, for example, on the M4 (junctions 3 through 12) it provided 140 people including senior foremen, steel- and ground-workers and traffic marshals.Not only that, it upskills its teams, provides apprenticeships, and keeps its workers abreast of all the health and safety and corporate social responsibility regulations.In other words, Hercules is a one-stop shop.

All of this is done using state-of-the-art digital capabilities to deploy and manage its workforce.It has also found a niche, an interesting cross-selling opportunity, in the form of site suction excavation equipment.The IPO proceeds will be used to ensure it has the systems and people in place to help staff some of the ambitious infrastructure projects outlined above. Projects such as HS2, upgrades to the rail infrastructure and strategic roads upgrades will require an estimated 217,000 additional skilled construction workers in the period to 2025The big current opportunity is HS2 Northern Section: Hercules is one of six companies tasked with finding the 4,000 workers required to deliver the ramp-up project.’We are also well placed to supply the skilled labour required to deliver incredible projects such as the Lower Thames Crossing and National Highways, regional development programmes and water sector projects,’ says CEO Korkmaz.’You know, there’s a massive growth opportunity and with the funds we raised we can capitalise on it.’Looking ahead, Hercules has been included in partnerships and frameworks with blue-chip clients, Korkmaz confirms.

‘So, inevitably this year and next we will see other big projects kicking off,’ he adds.In trying to benchmark Hercules it may be worth looking at some of the larger recruiters over this results season and assessing two things: profit margins and their susceptibility to the economic ebbs and flows.The comparisons might just surprise a few people.Of course, Korkmaz can’t really speak to the valuation of the company he runs – that’s for the market to decide.However, he notes: ‘We are operating in the infrastructure sector, working for blue-chip clients who are working on the massive government programmes.’I think they and we are well placed in the market and the next 10 years seem really, really positive.’How many other CEOs can say that about their business?

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