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(Sharecast News) - Hercules reported record first-half revenue on Friday, as demand across its construction and infrastructure services activities continued to grow, although profit fell as the group invested in systems, governance and future expansion.
The AIM-traded company said revenue for the six months ended 31 March rose 8% to 59.2m from 54.6m a year earlier, while gross profit increased 10% to 8.9m from 8.1m.
Underlying EBITDA fell to 1.7m from 2.6m, reflecting planned investment in technology upgrades, operational improvements and additional professional fees linked to the extended audit process for the 2025 financial year.
Underlying pre-tax profit declined to 0.6m from 1.7m, while underlying earnings per share fell to 0.67p from 2.11p.
Hercules said it had made significant investment during the period in new pay-and-bill and ERP systems, creating a more scalable platform to support future growth, improve operational efficiency and strengthen management reporting.
It also said it had continued to enhance governance, systems, controls and processes following a period of rapid growth and acquisition activity.
The company said cost optimisation initiatives had been launched across the group, focused on improving efficiency, reducing overheads and supporting profitability as revenue continued to grow.
Cash at the end of March stood at 2.7m, down from 9.8m a year earlier, with the prior-year figure boosted by the equity raise completed in October 2024 ahead of Hercules' 2025 acquisition programme.
Operationally, the labour supply division delivered a 5% increase in revenue, driven mainly by Advantage NRG, rail, white-collar services and Sizewell C.
Operative numbers continued to grow, while the Civil Projects division has won 14.0m of project contracts since the start of the 2026 financial year.
Hercules said the successful integration of Advantage NRG and the acquisition of Lyons Power Services had strengthened its position in the power and energy sector.
The Hercules Academy had now trained more than 2,500 people since launch and is performing in line with expectations.
Chief executive Brusk Korkmaz said the group's first-half performance was consistent with the strategic direction set out at the start of the period, despite lower underlying EBITDA and earnings per share.
"The market backdrop for Hercules remains compelling," Korkmaz said.
"The government's 10-year national infrastructure strategy, backed by committed spend of 700bn to 750bn, continues to translate into tangible momentum across our target sectors."
He added that the Civil Projects contract wins and the performance of Advantage NRG supported the board's confidence for the remainder of the year.
At 1126 BST, shares in Hercules were down 3.1% at 28.1p.
Reporting by Josh White for Sharecast.com.
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