Hercules PLC (LSE:HERC) CEO Brusk Korkmaz talked with Proactive about the company's strategic acquisition of Advantage NRG Ltd and its plans to support the UK's expanding power infrastructure. Korkmaz explained that the acquisition marks "a moment of real opportunity" as the UK prepares for a wave of infrastructure investment exceeding £725 billion over the next decade.
The company is entering the power and energy sector in a meaningful way, responding to growing demand for skilled overhead linesmen to build thousands of kilometres of new transmission lines. Hercules recently completed the acquisition of Quality Transport Training Ltd, which, alongside Advantage NRG, will strengthen the Hercules Academy’s training capabilities.
CFO Paul Wheatcroft detailed the financial terms, noting an initial cash payment of £10.20 million, a deferred payment of £1.50 million, and an earnout potentially raising the total to £15.70 million. Wheatcroft said the acquisition is expected to be margin and earnings-enhancing.
Korkmaz highlighted that Hercules achieved record turnover of £54.60 million and EBIT of £2.60 million in the first half of the year, trading in line with market expectations. The company recently rebranded to Hercules PLC to reflect its focus on labour supply for UK construction and infrastructure.
Proactive: Brusk, Paul, very good to speak to you. Brusk, I’ll start with you. Could you give us an overview of the Advantage NRG Ltd acquisition and why it’s so important for the business?
Brusk Korkmaz: Thank you, Stephen. It has been a very busy period for us at Hercules PLC. We wanted to take this opportunity to speak to our shareholders directly, outside of our usual interim and full-year results updates, because this is a major milestone for us. Paul and I wanted to share this announcement of the acquisition of Advantage NRG Ltd and why we believe it’s a major and strategic step forward for the company.
This is a key milestone in Hercules’ growth journey. As you may know, the UK is about to enter a huge phase of infrastructure investment. The government plans to spend at least £725 billion over the next ten years. We have already seen the government's ten-year infrastructure plan, and the national infrastructure pipeline is about to come out in July, which is also expected to be a major announcement.
These investments will span the sectors in which we operate: transport, power and energy, water, and transmission and distribution networks. In the power and energy space alone, National Grid has committed to £58 billion of investment to meet a 64% increase in electricity demand by 2035. The UK’s high-voltage power network already covers around 20,000 km, and it will need thousands more kilometres of transmission lines to meet future demand.
You might have seen from yesterday’s announcement that Ofgem has approved £24.20 billion of investment and £8.90 billion to be spent in electricity transmission upgrades, where Advantage NRG operates. Over the next ten years, we’ll be very busy delivering these projects. There is already a strong demand for skilled workers, especially overhead linesmen, and this demand is expected to grow rapidly.
However, the UK faces a huge shortage of qualified workers to meet the needs. That’s why we see this as a moment of real opportunity and why we are positioning Hercules to be at the heart of this once-in-a-generation transformation of the UK’s power infrastructure by acquiring Advantage NRG, a specialist provider of overhead linesmen.
We are entering the power and energy sector in a meaningful and strategic way. We are genuinely excited about the potential ahead. The acquisition also strengthens our Hercules Academy, which recently grew further following our acquisition of Quality Transport Training Limited. QTT has joined our academy, helping us broaden our training offering and deliver more courses to meet the industry's growing needs.
Proactive: Thanks, Brusk. Paul, could you take us through some of the main numbers associated with the deal?
Paul Wheatcroft: We’re acquiring 100% of the share capital of Advantage NRG Ltd. We have paid an initial cash consideration of £10.20 million plus a deferred payment of approximately £1.50 million. There will also be a one-year earnout, which, taken together, could result in a maximum total consideration of up to £15.70 million.
This earnout is based on a multiple of the average EBITDA for the year ending 28 February 2025 and the year ending 28 February 2026. Crucially, this acquisition is expected to be margin and earnings-enhancing. It is a cash-generative business. Looking at Advantage NRG’s last published numbers, they posted revenues of about £11 million in the year ending 28 February 2025 and a profit before tax of £1.70 million. That’s the main financial elements behind this important acquisition.
Proactive: Right. Thank you, Paul. Brusk, any closing remarks?
Brusk Korkmaz: As I mentioned, it has been a very busy few months for the company. In June, we announced our interim results and had a record six months since Hercules was established, achieving £54.60 million turnover and EBIT of £2.60 million. The second half of the year is looking great too.
We are trading in line with market expectations. We got two acquisitions over the line—QTT and Advantage NRG. These companies will help us with our Hercules Academy and supply overhead linesmen for the key power upgrade projects.
We recently changed our name to Hercules PLC. This was to simplify our brand and reflect the business focus on labour supply and expanding blue- and white-collar supply services in UK construction and infrastructure. From now on, we will be simply known as Hercules. Our commitment to shareholders, clients and employees will be unchanged, but our ambition continues to grow.
Proactive: Well, I hope you’ll continue to keep us updated with the company’s progress. Thank you very much for speaking with us today.