Last checked at 31 Aug 2022 07:00
31 August 2022
Hercules Site Services plc
("Hercules" or the "Company")
Nuneaton Lease Agreement
Hercules Site Services plc (AIM: HERC), a leading technology enabled labour supply company for the UK infrastructure sector, is pleased to announce that it has entered into a lease agreement for an industrial site in Nuneaton in the West Midlands (the "Lease Agreement"), circa 15 miles from the HS2 phase 1 (northern section) site.
Looking ahead to the medium term, it is expected that the Hercules Training Academy will be constructed on the site. The aim of the training academy is to reduce external training costs for the Company, to ensure high skill levels and quality across the Hercules workforce, and to provide specific training for clients across the infrastructure and construction industries (not just limited to HS2). This will generate further income streams for the Company and will also enable Hercules to provide training to upskill workers to fulfil additional roles on client construction sites.
Hercules will initially utilise the site for storing plant, machinery and suction excavators as the Company continues to supply labour for the construction of HS2 phase 1 in the West Midlands area around Birmingham. With Hercules headquartered in Cirencester, management believes that it can deliver efficiencies and cost savings by locating this site near to the Company's operations at the HS2 sites through reduced travel times and storage costs, among other things.
In addition, the facility will be used by the Company's civil projects team to service new fibre broadband work in the East Midlands region and for general training purposes, whilst also providing a more northerly base for Hercules' suction excavator business.
Under the terms of the Lease Agreement, the annual rent payable by Hercules is £100,000 per annum and the lease term is for 18 years. This lease will be shortened when construction of the training academy is completed, with rent to be agreed at market rates. The site covers an area of circa 2,800 sq/meters of yard space and industrial units.
The site is being leased from Hercules Real Estate Limited ("HRE"), a substantial shareholder and related party of the Company. Brusk Korkmaz, Hercules' Chief Executive Officer, is a director of HRE and the majority shareholder. It is the intention of HRE to finance the construction of the training academy and the planning process has already begun.
Henry Pitman, Non-Executive Chairman of Hercules, commented: "We are very pleased to have entered into this agreement with HRE as it marks the first step in the Company's stated strategy to develop a training academy to provide much needed skills for the infrastructure sector in a bid to help tackle the UK's skills shortage. We believe the site in the West Midlands will provide the Company with an important base for the region and the north of England, where Hercules is experiencing an increase in work across all business areas. We look forward to providing further updates as this important project progresses."
Related Party Transaction
The Lease Agreement is a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. The directors independent of the Lease Agreement (being all directors except Brusk Korkmaz) consider, having consulted with SP Angel Corporate Finance LLP, the Company's Nominated Adviser, that the terms of the Lease Agreement are fair and reasonable in so far as Hercules' shareholders are concerned.
For further information and enquiries, please contact:
Hercules Site Services plc Brusk Korkmaz (CEO) Paul Wheatcroft (CFO) | c/o SEC Newgate |
| |
SP Angel (Nominated Adviser and Broker) Matthew Johnson / Adam Cowl / Harry Davies-Ball (Corporate Finance) Grant Barker / Rob Rees (Sales and Broking) | +44 (0) 20 3470 0470 |
| |
SEC Newgate (Financial PR) Elisabeth Cowell / Ian Silvera / Max Richardson | +44 (0) 20 3757 6882 Hercules@secnewgate.co.uk |
About Hercules Site Services plc
Hercules is a leading tech enabled labour supply company for the UK infrastructure sector. Founded in 2008, Hercules has an established track record of profitability and fast-growth and has built a blue-chip customer base which includes Balfour Beatty, Costain, Kier, Skanska, Dyer & Butler and Volker Fitzpatrick. The Company has been appointed to provide labour for a range of high-profile infrastructure projects, such as HS2, due to its agile, innovative, digital first approach and complete service offering. It is well-placed to benefit from any government increase in infrastructure spending and its experienced management team has identified multiple opportunities for growth.