MIDAS SHARE TIPS: Hercules Site Services could build your profit

In September 2021, the government pledged to spend £650 billion on infrastructure projects in the UK, from hospitals to roads to power stations. Much has changed since then, but we still urgently need investment in schools and hospitals, better transport links and a safer energy system.

All these activities require not only billions of pounds, but also thousands of workers. The construction industry already employs more than two million people, but researchers predict that at least 250,000 more will be needed by 2026. Hercules Site Services helps bridge the gap. The company entered the AIM market last February with a share of 50.5 pa.

The stock has since fallen to 42.5 pence, but the price should recover and then some as CEO Brusk Korkmaz flexes his muscles and shows what Hercules is made of.

Korkmaz came to the UK from Turkey in 1998 to study civil engineering at University College London. Ten years later, he founded Hercules from his bedroom, finding and supplying construction workers for contractors.

The company has grown steadily since then, providing top firms such as Balfour Beatty, Kier and Skanska with employees ranging from masons, plasterers and pipelayers to engineers, foremen and supervisors.

Hercules has had a digital slant from the start and uses technology to make the hiring process as simple and effective as possible. In 2019, Korkmaz went one step further and created the Hercules app that allows users to be instantly informed about jobs that are relevant to them and their environment.

More than 7,500 employees have signed up to the app and the number is growing rapidly. Hercules screens applicants and – once approved – Korkmaz and his team make it their job to keep app users working.

Several hundred are already on the HS2 rail project, others are laying fiber optic cables in Kent, upgrading the M42 at Birmingham and repairing waterworks in London. Hercules wants to ensure that employees can move seamlessly from work to work, without having to travel far from home.

And although workers are outsourced to large construction companies, Hercules takes care of the payment and takes care of them. Korkmaz takes this part of the business very seriously and ensures that employees receive a decent wage and are paid on time.

He also sends mobile health and wellness units to various sites that offer medical exams, hearing and eye tests, even lung function analysis and wellness assessments to anyone who wants it.

Korkmaz is also a big believer in in-house training and plans to open a specialist academy next year in Nuneaton, Warwickshire, to attract new construction workers and help existing workers learn new crafts.

Planning applications have been submitted and the local authorities are enthusiastic, so there is good hope that Hercules will be given the green light in a few weeks.

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Labor supply accounts for about 75 percent of Hercules’ revenues, but the group also assists contractors with individual projects, managing and executing them from start to finish as needed, often using first-class technology to complete tasks efficiently and at low cost. costs to be carried out.

The company has one last chord on the line, supplying specialist kits for construction sites, especially suction excavators, large machines that make underground digging safer, faster and much more effective than traditional, more manual methods.

Korkmaz, 43, is energetic, hardworking and determined to build Hercules into a company that succeeds and delivers for its customers, but also makes employees feel valued.

The results so far are encouraging. Figures for the year to September 30 will be released in January, but earlier this month Korkmaz said turnover would exceed £45 million, up about 38 percent from 2021, while profits are also likely to show strong growth. to see.

Unusually for a small AIM-listed company, Hercules is also paying a dividend, with 1.7 pence being offered to shareholders for the year to last September, and payments are expected to steadily increase in line with earnings.

Midas verdict: Based just outside Cirencester, Hercules is a fast-growing UK company with solid long-term prospects. Britain’s infrastructure is cracking at the seams, several projects are already underway and more are to follow. Hercules can provide these programs with trained, local workers and a specialized safety kit. At 42.5 pence, the shares are a buy.

Traded on: GOAL ticker: HERC Contact: hercules-construction.co.uk or 01793 336851