6th Jan 2025 12:19
(Alliance News) - Hercules Site Services PLC on Monday said it intends to divest its suction excavator business, a move aimed at reducing debt and sharpening its focus on its core labour supply operations.
Shares in Hercules rose 7.1% to 45.00 pence each in London on Monday afternoon.
The labour supplier, which caters to the UK infrastructure and construction sectors, said the suction excavator division contributed less than 5% of group revenue in the year ended September 30. However, it accounted for 88% of the firm's consolidated debt, excluding invoice discounting.
Hercules explained that the divestment would "materially reduce debt levels and increase the group's free cash flow," enabling the company to allocate more resources to its core labour supply business. It said this aligns with its strategy to capitalise on growth opportunities as the UK advances large-scale infrastructure projects in rail, roads, water, power networks, nuclear energy, and airports.
"The proposed divestment, when completed, is expected to contribute to higher profit before tax, improved earnings per share, and enhanced returns for shareholders in the near future," the company added.
Hercules plans to release its full-year results on January 13.
By Eva Castanedo, Alliance News reporter
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