Hercules Site Services PLC (AIM:HERC) said it has raised £1.7mln, before expenses, from a placing of 3,777,778 new ordinary shares at a price of 45p per share.
The company said the net proceeds of the placing will be used to provide working capital to support organic growth in the company's labour supply division, as Hercules continues to deliver key infrastructure, civil engineering, utilities, groundworks, highway and railway projects across the UK.
In a statement, Brusk Korkmaz, chief executive officer of Hercules, commented: "After achieving record revenues and positive year-on-year growth in 2022, Hercules continues to build momentum and deliver on its strategy. Turnover growth has been in the region of 50% per annum for two years now, and we believe a third year of similar growth lies ahead. This is because we are well-positioned to benefit from the buoyant conditions in the infrastructure sector and trading at the start of 2023 has commenced positively."
He added: "We recently introduced two new income streams in the Labour Supply business, being the supply of security personnel, and white-collar placements, and both have received their first contracts and are progressing well. With a strong 2023 pipeline in place, these funds will support further organic growth in our Labour Supply division, which represented over 67% of our revenue in 2022."
Hercules said its Labour Supply business is growing rapidly and the company has experienced a strong start to trading in FY 2023. The company is currently engaged by the Balfour Beatty Vinci joint venture helping to deliver HS2 Phase 1 (Northern section), which is part of the largest infrastructure project in Europe.
The placing received support from new and existing investors, including two of the company's largest shareholders, Hercules noted. Premier Miton Group PLC, a substantial shareholder, has subscribed for 355,555 shares in the placing. The company's directors (all of whom are regarded as being independent of Miton), having consulted with SP Angel Corporate Finance LLP, Hercules' nominated adviser, said they consider that the participation by Miton is fair and reasonable in so far as shareholders are concerned.