Hercules Site Services wins excavation deal with Amey Highways

Hercules Site Services announced a new partnership agreement with Amey Highways on Tuesday, which will see Hercules become the sole supplier of suction excavator services for the National Highways Area 7 contract in the East Midlands.

The AIM-traded company said it would supply suction excavators and operators to Amey for three years.

It said the initial order would be valued at up to £2m, and would be reviewed every three years, or earlier if needed.

Hercules' agreement with Amey was in line with the firm’s objective of maintaining a high utilisation rate across its suction excavator fleet.

The deal also represented an expansion of Hercules' services, as Amey is a new client for its suction excavator offerings.

In anticipation of increased demand, Hercules previously announced plans to expand its fleet of suction excavators from 20 to 30 units, with the new deliveries expected to arrive in March.

“This agreement with Amey is an excellent validation of our suction excavator services strategy, which has seen us rapidly expand our fleet over the past 12 months,” said chief executive officer Brusk Korkmaz.

“We will soon have one of the largest fleets in the UK, positioning us to capture strong demand being driven by the fact that suction excavators can safely and efficiently excavate significant quantities of materials or debris, while reducing the risk of service strikes.

“The UK infrastructure market continues to go from strength to strength and we are well placed to benefit from this with our multi-disciplinary services offering.”

Korkmaz said the firm was recently pleased to see that two of its major customers and strategic framework partners, Balfour Beatty Highways and Galliford Try, were both awarded major projects.

“The former has been appointed to deliver National Highways 'Roads North of the Thames' package of works for the proposed Lower Thames Crossing, while Galliford Try's environment business has secured a place on Southern Water's new AMP8 framework.”

At the close on Tuesday, shares in Hercules Site Services were up 1.73% at 41.2p.

Reporting by Josh White for Sharecast.com.