Hercules has completed the transformational divestment of its Suction Excavators business. This transaction was trailed in January as management made the strategic decision to focus on high growth opportunities within the Labour Supply business, particularly across the UK infrastructure sector.
The Suction Excavators business has been sold to SNC Holdings (NW) limited for a total cash consideration of £2.4m. The transaction will materially reduce the Company’s debt and lease liabilities by c. £9m. In FY24, the business generated revenue of £6.0m and a loss before tax of £0.4m.
The result is a more focused group with high growth characteristics, a cash generative business model, and a strong balance sheet. Hercules now has greater firepower to execute its ambitious organic and acquisitive growth strategy
Recent results showed an impressive track record, with a revenue CAGR of 48% in the last 3 years – despite the economic backdrop. We note the attractive valuation and reiterate our forecasts with a 70p / share Fair Value.
