Hercules Site Services PLC (AIM:HERC) shares climbed 3% after the company announced the £2.4 million sale of its Suction Excavator division to SNC Holdings.
The deal immediately reduces debt and lease liabilities by £9 million.
Although the division accounted for 88% of Hercules’ borrowings, it generated less than 5% of total revenue.
The sale allows Hercules to focus entirely on its Labour Supply business, which supports major UK construction and infrastructure projects across the nuclear, energy, aviation, water, and rail sectors.
The company expects the move to increase cash flow, improve profit before tax, and boost earnings per share.
The extra cash and lower debt will also help fund future acquisitions. CEO Brusk Korkmaz called the sale a “hugely positive development”, giving Hercules the resources to grow in high-demand sectors as the UK invests in major infrastructure upgrades.
The stock was up 1.6p at 52.6p and has advanced 27% in the year to date, factoring in the positive impact of disposal.