Construction labour supply group, Hercules Site Services, has sold off its suction excavator business for £2.4 million.
The company’s suction excavator subsidiary has been sold to SNC Holdings (NW).
The deal aims to deliver on the strategy set out by the company last month, to increase cashflow and reduce debt by £9 million.
The suction excavator arm amounted to less than 5 per cent of the group’s revenue but 88 per cent of its consolidated debt in the year to 30 September 2024, making it a non-core activity for Hercules.
The firm said the cashflow increase from the sale will enable the company to dedicate greater resources to capitalise on the high-growth opportunities available to its core business.
It believes that the UK’s construction and infrastructure upgrades within the nuclear, power and energy distribution, aviation, water, and rail sectors will help facilitate this strategy.
Cash generated from the sale and associated debt reduction will also support the company’s ongoing acquisition strategy.
Last year Hercules completed its first acquisition, Future Build Recruitment Limited, expanding its exposure to the white-collar construction market.
That sale is expected to help deliver increased profit before tax and improved earnings per share, and streamline the business simplifying the company’s market position as a ‘trusted supplier of skilled operatives’.
In 2024, the suction excavator subsidiary generated £6 million in revenue and a pre-tax loss of £0.4 million
By 30 September 2024 the subsidiary had a gross asset book value of £11.8 million and net asset value of £2.2 million.
Brusk Korkmaz, CEO of Hercules, said: “As the UK carries out substantial construction and infrastructure upgrades within the nuclear, power and energy distribution, aviation, water, and rail sectors, our core Labour Supply business will now have greater resources to execute our strategy in these high-growth areas.
“This sale gives the Company a clearer identity and we are laser-focused on growth in our core sectors and strengthening our balance sheet.
“We expect our earnings per share and profit before tax to be enhanced for the benefit of shareholders.“
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