Hercules (LSE:HERC) — Admission to AIM Investor Presentation’

0:01 Good afternoon and welcome to the HERCULES PLC Services admission to AIM Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted anytime by the Q and A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it received during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Bruce Korkmaz. Good afternoon. Thank you so much, Alessandro. Good afternoon, everyone. I'm just gonna start the presentation a bit. We are gonna turn off our cameras, if that is alright, and we are gonna turn them back on during the q and a session to make the the the screen bigger for you guys.

0:52 Thank you. So I'm just gonna start. We are gonna go in detail about HERCULES during this presentation. But in a nutshell, we are a technology enabled labor supply company operating in the infrastructure sector. As you might be aware, there is a £650,000,000,000 investment committed to be spent in The UK infrastructure sector. So HERCULES, as we are, really well placed in the market with the right reputation and with the huge pipeline of projects to grow. So we believe that there are exciting times ahead of us. In this presentation, we will explain who we are and our journey and also our plans for for the the growth opportunities as well.

1:39 I'm gonna go to the slide four because the next two slides are the disclaimers. So this is this is us. Let me introduce you to our team. We've got a very strong board with both exec and nonexec directors with great blend of experience in infrastructure, financials, sales, PLC, governance, and even starting and running an aim listed company. I'm Bruce Korkmaz. I'm the CEO of HERCULES. I I'm a civil engineer, graduated from University College London over twenty years ago. I've got a twenty years experience in infrastructure and and and construction. I worked for companies, Black and Veatch, HOCHTIVE, MJ Gleason in the past before starting HERCULES in 2008.

2:28 I would like to introduce you, our CFO, Paul Whitcroft. Thanks, Bruce. Yeah. I've been with HERCULES since early twenty twenty through the pandemic into the IPO. I've been a finance director for over twenty five years in a number of different industries, thirteen years as a finance director in three different Hansen PLC subsidiaries doing a number of acquisitions, and I'm a chartered management accountant. Your turn, Andreas. Good afternoon, everyone. Andreas Gottfried. I'm the operations director here at HERCULES. I joined the business about two and a half, three years ago now, and I've come in actually from outside of the construction industry. I've over twenty years experience in various business development and sales director roles, and I bought some of this experience to HERCULES.

3:16 I've already helped secure various new clients and projects, including HS two and and also helped set up the specialist plant hire division. Thank you, Brisk. Thank you, Andreas. Thank you, Paul. We are also delighted to introduce you our nonexec team. They're not here at the moment, but as you can see from their profiles, we've got Henry, Ahmed, Richard, and Robin on our board. As you can see from their profiles, we've got a very strong nonexec team. Between us all, we have got varying experience and expertise in the infrastructure sector, corporate finance, aim listed market, and governance. Together, we believe that we can take HERCULES to an even more successful future. Here's a quick business snapshot of who we are. We have been growing year by year and investing back into the expansion of HERCULES since I started in 2008.

4:10 We are a growing profitable labor supply business based in the center of England just by by South Cerny in the in in the Cotswolds. You can see some of our clients and some of our projects on this slide. Our our clients are Balfour Beatty, Kiehl, Dyeran Butler, Walkers, and and many more. We we we which we can maybe send you guys in detail of of our clients and and and our projects. We have secured a solid pipeline of projects and frameworks, including the HS 2 Birmingham section, which is a game changer for us. We've got a separate, slide, on this, and and Andreas will go through, to to explain to you our our our potential opportunities there. We got a very strong record of growth. Our revenue increased over £30,000,000 by end of two thousand nineteen.

5:01 It dropped down to £23,000,000 in 2020 because of COVID, but our six month turnover for this year was £14,000,000. And our unaudited accounts show that this year's turnover will be over £32,000,000, which we'll be reporting, which we'll be reporting, end of this month. We have paid then paid dividends in the past, and we will pay dividends for the year just ended, September 2021. And our our plans are also to pay dividends for upcoming years as well. There is £650,000,000,000 committed to be spent in the infrastructure sector over the next ten years, so the future is looking really positive. Also, there's a labor shortage in The UK, as you might be hearing from the media. So there will be a high demand on companies like us.

5:48 This creates more opportunities for HERCULES. Our core business is labor supply to blue chip companies as well as to other clients. We also have got, our construction services arm. And under this, we have been, we have been hiring out our suction excavators, and we have been killing our civil projects. And one of our differentiator is that we can cross sell all of these services to our clients to maximize our revenue under one roof. We think outside the box, and we have differentiated ourselves from our competitors by use of technology, by developing our award winning apps, and our in house digital capabilities. We also have a very loyal workforce, because of our training and upskilling programs as well as our focus on their health, safety, and well-being.

6:36 There are lots of opportunities, to grow HERCULES further through, organic expansion and market penetration of existing businesses, a potential licensing of our digital apps, and acquisition opportunities in the fragmented sector. I'm gonna flip to the next slide. There we go. As you can see here, we've got a very strong growth history. I'm gonna take you to beginning. I set up, HERCULES in 2008, having spotted a gap for supplying good quality labor and carrying out civil projects under the same umbrella. I started working in the family spare bedroom. I was sharing my workspace with my newly born son. As you can imagine, he was getting louder and louder, so we ended up converting our garage. So I ended up moving that, so that became my office. I didn't take salary for a couple of years. As the business grew, we moved into a couple of offices in the Base Point Business Center.

7:34 Then because of the company's success, we went on to building our own offices in 2016. Our first blue chip client was Black and Veatch in 2009, and we have gained many more blue chip clients over the years. In 2012, we established our civils project division. In 2013, we became a member of Costain's framework, which led to working on numerous projects for Costain, including the Peterborough and many other water industry projects. Our first, Balfour Beatty highways project was on the M 3 motorway project. Because of our strong performance here, this led to many more opportunities, such as, a 14 road project than onto the M 4 motorway project, which is currently the largest highways projects in the country.

8:23 Because of our success on the M 4 motorway project, we ended up winning the labor supply contract on the HS 2, which is the biggest project in Europe. Again, winning this contract is a major milestone for us, and it will be a huge growth opportunity for us as well. After spotting inefficiencies in construction and recruitment, we have developed our own HERCULES recruitment app, which was the start of HERCULES digital division in 2019. In 2020, we invested in our suction excavators, and this part of the business is also thriving. Following the success of this initiative, we invested in 11 more suction excavators. So so we have got nine suction excavators up to Christmas, and we have got 11 more that we have ordered and three arrived so far. So we have got 12 in total and eight more to arrive until end of May, June time.

9:21 In 2021, we won the labor tender for the HS 2 Northern section, which we believe it is a game changer for us and huge growth opportunity for our future. This year, also started really well. At the beginning of, February, as as you might already know or as you already know, we listed HERCULES on the AIM markets, and it's a major milestone for us. We are very excited about being on this platform, and it and this will enable us to grow, as we have got ambitious plans for the next part of our journey. You can see, from our growth history, we came to this point for last fourteen years, and we are setting ourselves at the moment to perform on the AIM market for the next ten years. As you can see from the slide, HERCULES is an established company, and each of these milestones show that we are a growing business.

10:12 And there's a huge growth opportunity for us in the near future. Andreas, next part of the slide is yours. Thank you, Brisk. What I'd like to do is is take you all through the structure of our business and essentially what we believe sets us apart from our competitors. So our business is predominantly a blue collar labor supply business, and this accounts for around 70% of our total company turnover. We've got strategic partnerships and frameworks in place with the top blue chip construction companies in The UK, such as Kia, Scanska, Balfour Beatty, and the others that you see listed across the top of the slide. But as well as a large mix of other construction companies covering all sectors, including rail, utilities, and infrastructure. So that's highways and motorways.

11:00 In total, we service around 70 companies in The UK and have nearly 600 people working on various projects across the country. So, typically, these blue chip construction companies, they do not employ the labor directly themselves onto these projects. So that's how we get involved. The labor we supply to our clients and the projects range from cleaners and general operatives, ground workers, various machine and plant operators, all the way through to your senior supervisor roles, including general foreman and project managers. The other part of our business is construction services. So construction services includes our civils project and specialist plant hire. So under the civils project, this is where we undertake subcontract packages of work for delivery, and this includes a plant material, labor, and supervision.

11:53 And the specialist plant hire covers our state of the art suction excavators. Our labor supply and construction services business are both underpinned by the HERCULES digital and analytics platform that you'll hear about in a lot more detail later on in this in this presentation. But, essentially, this is made up of various bespoke in house developed apps and technologies that sets us apart from our competitors and make us the go to labor supplier in the marketplace. We understand the issues in construction, and we've got the capability to develop and use the technology to help overcome these problems. We know all of this digital and technology is fantastic, but our business is all about the people. Without good quality skilled people, we will not have a business.

12:40 Therefore, we have invested heavily in the health and well-being of our workforce through our mobile health screening trailer and various other initiatives. This is a key differentiator to to retaining our workforce. We'll share with you some more information on what we're doing around this in in in some of the later slides, but also the way that our clients have recognized us for this. Over to you, Paul. Thanks, Andreas. The UK infrastructure sector is set to receive massive public and private investment in the next ten years, circa £650,000,000,000, and probably £200,000,000,000 of that by the year 2420 stroke '25 to support four hundred and twenty five thousand jobs every year.

13:26 And what's particularly exciting for us is that a significant chunk of this funding HERCULES markets. Demand for new skilled labor will be very high in the next few years. In fact, it's estimated 217,000 new skilled operatives will be required, and that's that's close to a a twenty year high. There's never before been such support for this industry. Whereas our competition takes a more traditional approach, HERCULES also offer complementary services filling a gap gap in the market. We believe that our innovative digital first approach, which includes matching appropriately skilled workers to each project's geographic location, is an important differentiator that has attracted our current listed blue chip clients and will no doubt attract more as we develop and expand in the future.

14:23 We're in a a fragmented sector, so there will be opportunities for acquisitions, enabling us to expand the range of services we can offer to our clients even further. Bruce, back to you. Thank you, Paul. As you heard from Paul, there's a huge investment being made in our industry as well as a a shortage of labor. So how is HERCULES best placed to take advantage of this situation? This slide shows how HERCULES is uniquely placed in the market and how we can have a better and stronger market share than our competitors. As you can see from the first column under the HERCULES umbrella, we provide a diverse range of services under a single platform solution to maximize our revenues by cross selling opportunities.

15:15 An example of our cross selling services is on the M four motorways project with a client being Balfour Beatty. We have been supplying labor there. We have been killing our civil projects, and we have been hiring out our suction excavators to maximize opportunities. Andras is gonna talk about this m four project in detail later on under our case study. So there is no, other comparable company like us in the market, and with such a wide range of services under one roof makes us really unique in this sector. Andreas, next part of the slide is yours. Thank you, Bruce. So we currently have an active workforce of five nearly 600 people, and this is constantly growing. So this is available to our clients nationally.

16:03 Using our in house developed we've got a proven strategy to recruit and train additional workers while supporting them on various apprenticeships and upskilling programs. The HERCULES digital recruitment app gives us the ability to rapidly place these skilled operatives on local projects, whilst the one team app allows us to seamlessly onboard these individuals effectively and efficiently. So this is now all done digitally without the need for paper. We've got over 5,000 people registered on our recruitment app, and these are ready to be engaged and deployed for our clients. Thanks, Bruce. Thank you, Andreas. Our passion for innovation and excellence, together with our work ethic and high standards of delivery has helped us with our strong brand awareness.

16:49 So this this has established strong relationships and partnerships with our clients. And these relationships and and and partnerships helps us to see the future workload and gives us an opportunity to plan ahead and get involved, from the start. I'm just gonna flick to the next slide. Well, this is my favorite slide, because our in house digital capabilities is a big differentiator for us, from our competitors. We are experts on supplying labor to the industry, and we are seeing some labor shortages. So we have built our digital arm to recruit and onboard our workers in a quicker, efficient, and more cost effective way, which differentiates us from our competitors.

17:37 So labor supply in construction is very traditional, very slow, still paper based, not localized, and inefficient. So we came up with the solution of introduction of innovation, technology, and digitization by developing our own recruitment and onboarding apps. These products and our enhanced digital capabilities are the game changer and differentiator for HERCULES. The first app is called HERCULES Construction Jobs. Traditionally, the workers phone up the recruitment companies in their break times for their next job, next position. They've got half an hour break at 10AM, another half an hour break at 1PM. And so after five, everywhere is closed. So they can't phone any recruitment companies to register themselves.

18:22 As you can already see, there are inefficiencies in this process. So but by using our app, they can register anytime they like, including the evenings and weekends. They can upload their qualifications, their right to work documentation, and their personal data. Then our software matches them to jobs local to their homes and suitable for their qualifications and experience. So far, we've got over 5,800 potential workers downloaded our app. The second app is called OneTeam app. So this helps us to onboard workers through paperless, efficient, and cost effective onboarding journey, especially when onboarding large numbers of workers on mega projects such as HS two. We have developed, these apps by being experts in the construction industry rather than being just a software company. So we understand the problems by facing them daily.

19:15 Also, our apps design our for our workforce. So they are user friendly and easy to be onboarded. So far, the user feedback has been excellent. Clients also love our digital strategy because we can provide a more cost effective local workforce as well as we can help them with their social value initiatives. Our apps and our digital capabilities are a key factor in securing the HS2 contract. Our additional capabilities also gave us an edge in securing the HS2 innovation funding for our skills, education, and employment portal. This is called c portal. HS2 wants to license this product from us. So we are about to sign a contract with them, I think, in this month. So this is the first time we will get paid for a digital product that we have developed in house. So it's a big step for us, and we believe that we can there's an opportunity to to go to other sites in construction and other clients as well as potential councils as well to push this product.

20:14 We believe that there are more growth opportunities for our growth by licensing and white labeling our apps in other industries as well. And monetizing these platforms, yeah, will be an upside as as it's not in our forecast for for for for this year. In addition to this, we've got our latest digital project called productivity monitoring solution. This currently doesn't exist in the marketplace, and there's an opportunity for monetizing this product in the in the near future. So to conclude this slide, we believe that our digital strategy is the game changer to the infrastructure industry and recruitment in construction. There's no competitor like us with these kind of solutions in the sector. Andreas, next slide is yours.

21:01 Thank you, Bruce. So I touched briefly on some of the previous slides, what we do with regards to health and well-being of our workforce. Here at HERCULES, you know, we honestly believe that a healthy workforce is a happy workforce and a productive workforce. This is very much ingrained in the culture of our business. We know that without our workforce, we will not have a successful business. We're all aware there's a huge increase in demand for labor due to the growing investment from the governments on on various projects. And therefore, it's even more important for us to to look after and retain the current workforce, but also recruit new people into construction and using our technology to help find labor faster and more efficiently. A huge focus for us is also in the upskilling and cross skilling of the workforce, which enables us to do a lot more with a lot less.

21:54 We work with all sectors, including armed forces, ex offenders, as well as the unemployed in schools and colleges. We even have our own podcast to create awareness and drive the brand in the marketplace. We need to make this industry appealing for people to join so they can see this as a career opportunity and and a great place to work in construction. When it comes to health and well-being and corporate social responsibility, HERCULES have made an investment in our mobile health screening trailer as well as various other internal strategic working groups that you can see listed. And this is all helping us deliver huge social value targets across multiple sites for for and with our clients. This is very much what HERCULES is about, and our clients recognize us for this with the multiple industry awards that we've received.

22:49 I'm gonna take you through one of the little case studies that we have with Balfour Beatty Venture joint venture, which is the M 4 motorways project. So following the success on various other projects with Balfour Beatty and the joint venture, they engaged us to get involved with the supply of services to this to this project. So those that don't know the M 4, this is the longest stretch of motorway works at that time in The UK, and it covered all the way from Junction 3 in Hayes right through to Junction 12 in in in Theo. The total value of this project to HERCULES up to September 21 was in excess of £16,000,000. At peak on this project, we had nearly a 150 people working the stretch of motorway, supplying all the trades from your ground workers right through to your to your senior foreman.

23:42 Using the recruitment app and the onboarding app and the OneTeam app, ops team could effectively and efficiently quickly respond to the project requirements and sometimes really, really urgent timelines. There are instances where we would get requests on a Friday afternoon for operatives and gangs of people to start on a Monday morning. And because of our investment in infrastructure and technology, we managed to nail this every single time. Our client has recognized HERCULES for the work we've done, and we were awarded the highway supply chain award for 2020 for our delivery and our involvement on the m four project. This is also a fantastic example of of demonstrating all the different services HERCULES can offer to a single project. So our civils teams were engaged on various trial holes through subcontract packages, and we supply and continue to supply leading labor to the project. And and our specialist plant hire team deploys suction excavators to the project on a on a weekly basis.

24:43 We then night shifts and weekends now as well with our back exits. From a client's perspective, having a single relationship to deliver all these services has always been the feedback of a of of of of a huge benefit to them. As this project draws to a close, we've still got nearly a 100 operatives working on the M 4. As they're finishing up the work, we are starting to move these operatives to to other projects in the area, which includes Lower Thames Crossing, which is starting up as another major infrastructure project in The UK and various other utilities and and and water projects in the area. Some of the team that's actually working for for Balfour Beatty Vinci, the client, will be moving over to Lower Thames Crossing as well to be to be managing parts of those projects.

25:32 Before I joined construction, I must be honest, I used to hate roadworks. I now have a total different appreciation for for the work that's carried out, but for the operatives that are actually on-site. Paul, over to you. Thanks, Andreas. Hercules has grown steadily since started the business in in 2008. Turnover rising to million pounds before the pandemic struck. The majority of the turnover stems from the supply of labor, well over 70% currently, the remainder coming from other construction services. This labor supply element will increase significantly as we supply more operatives to the HS 2 Northern Section.

26:20 We've always been a profitable company as as this slide shows. In in relation to gross margins, labor supply gross margins are relatively consistent, typically between 1821%. Whereas for construction services, margin levels fall into two sections. Firstly, civil projects where margins can fluctuate, but the relatively new suction excavator service business yields quite high gross margins between 5055%. Despite the setback faced by the whole of The UK construction industry due to COVID nineteen, we have experienced quite exceptional growth post the major pandemic lockdown. Unaudited management information for the year ending September 2021 looks like circa £32,000,000 turnover, which will be our highest ever.

27:16 Accounts for the year ending September 2021 will be available towards the end of this month, so so watch out for that. HERCULES debt is quite low, about £7,000,000 currently. Half of that is for asset funding, mostly for the first nine suction excavators, and the other half is for a working capital facility. As Bruce mentioned earlier on, we've paid dividends in the past, and we have a clear intention to follow a progressive dividend policy in the future commencing this year based on twenty twenty one's results. Andreas, back to you. Thank you very much. So I'm gonna talk to you about h h two, and this has really been the pinnacle for our business and an absolute game changer for us. So following on from the successful relationship with with Balfour Beatty Vinci on the m four and various other projects, now engage with the same joint venture on the largest infrastructure projects in Europe, which is HS two. I'm sure you're all aware of HS two, but the sheer scale and size of the project is absolutely enormous.

28:25 So So phase one of HS two, which is under construction, is from London to Birmingham, and it's over a 134 miles long and includes something like 31 miles of tunnels and over 10 miles of of viaducts. So on HS two, HERCULES will be part of what is known as an integrated labor desk, which is which is essentially a collaborative working team between the six chosen labor suppliers. And we're working as one unit to supply over 4,000 skilled workers over a six year period. So we've had experience of working in this manner before on various projects in the past, namely the a 14, which was an enormously successful project in The UK recently, and working with the same labor suppliers. And so we we have the relationships, and we work very, very collaboratively together.

29:18 The Balfour Beatty Vinci contract for HS two, which we're working on already, covers the top section of the initial phase. So this is from Longichton just outside Coventry in Warwickshire right through to the center of Birmingham and then out into Handsacre in Staffordshire. So this section alone that we're helping build includes 42 viaduct, 66 over bridges, and cuttings over 30 kilometers in length and 66 embankments that are reaching over 33 miles in length. As I mentioned already, we're working, supplying operatives to this to this contract for the major works, and this is continuing to grow. So we at present, we have over a 100 people working on-site, and the next phase in ramp up will take us as a collaborative working desk over 4,000 people at peak.

30:09 As I mentioned in the beginning, this is an absolute game changer for us at HERCULES and a major corporate milestone that this contract alone will double the size of our business in the coming years. Working with the largest construction company in The UK like Balfour Beatty and the joint venture in Vinci, delivering a project of this magnitude is phenomenal and something that everybody in our business is extremely excited about. In addition to these requirements for Balfour Beatty Vinci, there's there's additional opportunity with HS two on on on this section. So various packages are subcontracted out, and and the labor desk is looking to supply the labor for these subcontract packages as well. So so the opportunity is absolutely enormous for us on HS two.

30:57 Back to you, Bruce. Thank you, Andreas. This slide is all about our future and and and our growth opportunities. Apart from the HS two growth, we have other areas for our future value to increase. First of all, we are focusing on the organic growth of our labor supply division through our strategic and framework partnerships, we have built over the years. With regards to our apps, these are very important in increasing our pool of skilled workers to meet demand. Again, our apps gives us a a a a an advantage over our competitors with the current labor shortage. During COVID, construction became a very important sector.

31:43 People, including the next generation, see the potential career opportunities, especially with the technological developments. It's a new in sector, and and we can maximize this opportunity by launching our training academy, which will help us to train, skill, and retain our workforce. We can also monetize this initiative by selling construction related training to our clients and to the public who might be interested in in a career in opportunity in in construction. With regards to our construction services division, our utilization rates for our suction excavators has been over 90% even though we started this division just over a year ago. We need more suction excavators because of this high demand. So we are more than doubling the size of our fleet this year. We had nine suction excavators up to Christmas, as I have mentioned early on. And now we have 12 in total and eight more coming in sorry, eight more to arrive, I think, by end of May, June time.

32:52 So with our digital arm, we are also looking we are also working really hard to monetize this by white labeling and licensing opportunities. We are also exploring the monetizing of our health screening and well-being services that we provide to our clients. The opportunities from the targeted acquisitions would accelerate our growth and increase our cross selling opportunities even further. As you know, the construction sector is very fragmented, and we can see opportunities to acquire businesses that provide us with new skills and services. And these businesses could also provide us an entry point into the new and complementary sectors such as expanding our rail division. Paul, I think the next slide is yours.

33:40 Not sure it is actually. I think it's back to you, Russ, on the summary. Okay. You're right, Paul. Sorry about that. So as you have seen from this presentation, we are a technology enabled labor supplier that also provides construction services. In summary, we have been profitable right from the start and rapidly growing, especially after securing the HS 2 Northern section, which is a game changer for us. We have demonstrated sustained record of revenue and profit growth. We have a compelling growing market opportunity. We have got cross selling capabilities to maximize our profits. We are operating in the right sector to increase our market share. We have got a clear market strategy with multiple growth opportunities.

34:28 As you have seen from the slides, we are in the right industry at the right time with the right reputation. And thank you so much for your time. And if you have got any questions, we are more than happy to answer them. Thank you for thank you listening thank you for listening. Bruce, Paul, Andres, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated in the top right hand corner of your screen. But just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we've received questions throughout today's presentation, and thank you to the investors for submitting those. Could I ask you to read out the questions and give responses where it's appropriate to do so? And then I'll pick up from you at the end.

35:17 Sure. Okay. So first one is asking about the explaining the revenue model and payment terms. I'll I'll I'll take that bit. So we're primarily a labor supply provider, and we pay our operatives and contractors weekly. But But we bill our clients monthly. And they're on average on forty five day payment terms. So in terms of labor supply, that's how that works. We clearly therefore need working capital to particularly where growth in the business is gonna come along like it is with HS2. That's how it works on the labor supply side in terms of civil projects. That is more conventional construction where we quote for a job, and we deliver the job, and we send in evaluations of that on a monthly basis.

36:11 And they are then settled by certificate by by the clients until the job is finished. Such an excavators are mostly on week to week basis, so we bill for those on a on a a week by week as the the clients utilize them. So in terms of another part of the question was about recurring revenue. I think this may be coming into framework agreements. Andreas, would it would you take us through how framework agreements work and how that effectively gives us that recurring relationships with clients. Absolutely. So so we all sign up frameworks, preferred partner status with various clients, strategic partnerships, or preferred supplier list, essentially, with various clients.

37:01 Once we're on that preferred supplier list, we then have the opportunity to go out and supply labor to all the various projects. Once we get onto those projects, we keep the people on these projects. And the projects can range anything from three weeks, four weeks, right up to something like the m four was three, four years, and HS two is gonna be six years plus, we believe. So that gives us the recurring revenue, well, from from the operatives that that we put on-site. And and then the frameworks, we gives us the opportunity to maximize the opportunities for the different projects that they're working on. Well, the last part of the question covers is asking about do we have any exclusivity with clients?

37:47 Noah, I don't know whether you want to add anything to that. Being being in this getting to these frameworks and partnerships are are quite hard. You need to have quite a good reputation as well as a lot of accreditations, and you need to be able to deliver. So, I mean, not not very many not very many sort of competitors of of of you know, or or or other labor suppliers sort of can work for the for those blue chip sort of companies. So I would say partly yes to this this this part of the question. The next question is asking about the competitive landscape and why our offering is differentiated from our from from those competitors. Bruce, do you want to cover this one? Sure. Yeah. No problem.

38:40 Thank you, Paul. So with regards to labor supply in construction is quite traditional, and most of our competitors are thirty, forty years old old companies. They have sort of established by the, you know, the the parents or the father and then pass down to the sort of the next generation. And and and we are a bit of a disruptor being 14 years old and coming to the, you know, market with lots of great ideas using technology. So we are growing as well. So we get a little bit different than we think outside the the the the the box a bit.

39:27 But we we believe that our offering is definitely differentiated because of our technological arm, our digital arm to for for for this, as well as we offer our services. We are not only a labor supply company. We also offer our construction services arm sort of to be able to maximize the opportunities. We might be able to start there, for example, on a labor supply, but we might be able to sort of push our, you know, suction excavators to be utilized on that job to to, again, I mentioned to to maximize our profit and our revenue. So so so so this is a this is very different. We don't have a there isn't sorry. There is not a a company like us in in the market like us.

40:18 Okay. So another question is about the need for further investment in the digitization of the business and whether any funds have been allocated for this. I mean, I I think I can cover that one briefly. Clearly, it's not so much a need. There's an opportunity. We have great opportunities in this line of our business in in in terms of as has just explained with the digitization. There's far more we can do. We have other products we want invest to in and develop and create revenue streams for. So, you know, funds have been allocated to this. We also have had some benefit in the past and and hopefully, we're in the future in receiving some of that that money back by research and development tax relief claims as well.

41:06 In terms of whether the technology is in house or or outsourced, we've we've got clever people within the business who are able to design and and come up with the with the ideas and the logic of what we'd like to do. But in terms of actually doing the the clever programming, that is done by an outsourced company. So yeah. Bruce, do do you wanna wanna add anything to that? Yes. Just just to just to clarify as well, all the IP rights for the the the products that we have developed belongs to us. So this is a very positive thing for for us. But one of the things that we would like to do as well to kind of bring some of those digital outsourcing in house as well. So, hopefully, this platform being on the AIM market will will help us enable that.

41:57 Another question, Bruce, for you, I think. Would you look to expand beyond The UK into other countries? At the moment, UK infrastructure sector is quite, you know, buoyant and really positive. So so currently, we don't have any plans at the moment. Within the next two, three years, you know, we would like to sort of push our growth in The UK market, infrastructure market, where we have built brilliant relationships with our clients. So not at the moment, but might be in the future. Okay. What looks to be the last question? I'll set that one for you, Andreas. John is asking about who are our competitors.

42:43 So I think Bruce mentioned what the competitive landscape looks like, but the, you know, the people we we work with and come up against are people like Danny Sullivan's group. We we Fortell, VGC, Vineski, Brown. There there there's various competitors out there, but we also work with these competitors on various integrated labor desks essentially. And then there's companies like Carmichael and a couple of others that do more predominantly white collar labor supply. But the ones I mentioned earlier, those are your your traditional blue collar supply supplier companies that have been around for for many, many years. And we're breaking the mold and and doing things differently and and taking market share away from them.

43:32 Perfect. Thank you for that. I think you've actually addressed those questions you can from investors. And, of course, the company will review all questions submitted today and will publish those responses on the Investor Me company platform just before redirecting investors to provide you with their feedback, which I know is particularly important to the company. Bruce, could I ask you for a few closing comments? Yeah. Sure. Thank you, Alessandro. Thank you so much for for listening to us. And just I would like to add that everyone in Hercules is looking forward to growing the company and also growing our people as well. And we would love you to be a part of this exciting journey with us. So thank you so much. Bruce, Paul, Andreas, thank you very much for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

44:20 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of HERCULES PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.