Hercules Site Services PLC (AIM:HERC) chairman Henry Pitman will tell shareholders at the company’s annual shareholder meeting today that the board is confident that the outlook is “bright”, with “unprecedented demand for our services”.
The labour and equipment supply company expects to see “a step up in our growth, driven by highly favourable market conditions”, according to a statement ahead of the AGM sharing the contents of Pitman’s speech.
WATCH: Hercules talks about its recent fleet expansion
In large part this will be driven by the six-year HS2 contract to supply labour for the Balfour Beatty Vinci joint venture constructing the northern section of the high-speed rail line from London to Birmingham.
Pitman said the contract is “an important milestone” for the company and has prompted significant investment in the business during the first half of 2022, with activity now ramping up in response to increasing labour demand.
“The successful contract award is testament to the strong blue chip customer base secured over the past 14 years, and to the strength of our technology-enabled offering, which we believe differentiates us from other labour supply services in the market today.”
He said growth was also coming from “high utilisation” of Hercules’ suction excavator fleet, of which 10 more vehicles were acquired last month to make it one of the largest UK fleets.
“Our suction excavator services complement the company's core labour supply business and civil projects delivery division and enable us to offer a range of services under one roof,” Pitman said.
The speech also acknowledged the headwinds the wider economy is facing, especially rising inflation, but the board remains positive, “given that we are experiencing unprecedented demand for our services due to the multi-billion-pound infrastructure commitments made by the UK government and private enterprises”.
The pipeline of work was reported to be strong, including the company being contracted for projects outside of its core verticals, such as laying fibre-optic broadband cables.