(Sharecast News) - Hercules Site Services announced the procurement of a five-year contract with Balfour Beatty Rail on Monday - a firm entrusted with significant contracts for the upcoming Network Rail control period 7 (CP7).
The AIM-traded firm said the agreement followed a stringent and highly competitive tender process and would see the inception of a new division within Hercules dedicated to providing specialist rail labour on live tracks to its clientele.
From 1 April 2024 to 31 March 2029, CP7 involved a £44bn five-year plan dedicated to enhancing and developing railway systems throughout England and Wales.
With priorities of executing upgrades, addressing climate change and augmenting current train performance, Balfour Beatty Rail would manage significant contracts during CP7 on behalf of Network Rail, Transport for Wales and Transport for London.
Hercules Site Services would now support it as one of six suppliers providing essential labour resources.
"This contract provides Hercules with an exciting new revenue stream which has strong potential for continued growth," said chief executive officer Brusk Korkmaz.
"While we have previously provided personnel to deliver heavy civils and earthworks to pre-enable rail-based projects, this contract will see us recruit specialist rail labour on live track on behalf of a customer for the first time, opening up a wider range of opportunities for Hercules in the rail industry.
"Given that we have worked with Balfour Beatty Group for many years, this news also demonstrates our ability to grow our total customer value due to the quality of the services we provide."
Additionally, Korkmaz said it was important to highlight that the recent government announcement about the future of HS2 would not impact its ongoing contracts for the first phase of HS2 between London and Birmingham.
"Our work at this project continues to build momentum as we supply more contractors to site, and with the launching of our new technical rail specialism, we are well placed to capture more value from future rail infrastructure projects."
At 1344 BST, shares in Hercules Site Services were down 0.98% at 25.25p.
Reporting by Josh White for Sharecast.com.
Hercules Site (HERC)