Hercules Site Services PLC (AIM:HERC) said it expects both revenue and underlying profit (EBITDA) to be ahead of current market forecasts for its just-completed financial year.
Revenue for the labour supplier to the infrastructure sector is expected to be over £80 million for the year ended 30 September 2023, up at least 61% on the previous year and above the current market consensus of £73.1 million.
Hercules will confirm EBITDA when it publishes full results in January, but City estimates are currently for £3.4 million, up from £2.3 million last time.
Chief executive Brusk Korkmaz said over the past three years annual revenue has grown by an average of 50%.
Each of the group’s three divisions increased organic revenues, capitalising on continued growth in the infrastructure sector.
The Labour Supply arm provided workers for the London-to-Birmingham leg of the HS2 rail project, with 430 supplied currently on-site, including white-collar roles, and demand was said to be increasing.
On the government's recent decision to scrap HS2’s path north of Birmingham, Hercules said the decision has no impact on its contracts on the current Phase 1 section.
The Civils Projects arm saw most activity in the water sector, where contracts worth a total of more than £3.1 million have been won since the start of May with two clients. The contracts relate to nine wastewater treatment and water management projects as the industry ups investment to deal with sewage spills into rivers and oceans.
Utilisation rates in the Suction Excavator division have been “solid”, with increased demand leading to the fleet growing by 14 vehicles over the period, which the company said is one of the largest in the country.
This equipment complements the Labour Supply and Civil Projects businesses, Hercules said, which enables it to “leverage cross selling opportunities between divisions”.
Korkmaz said Hercules was “observing significant opportunities for the year ahead”, with its training academy in Nuneaton expected to soft launch in November before its official opening early next year provide an additional revenue stream.
"Further new revenue streams will also be delivered through our new Labour Supply specialisms, which are well aligned with industry trends,” he said.