Division now employs more than half of firm鈥檚 7,500 staff
A booming consultancy business helped lift Mace to a record pre-tax profit last year with the division now employing well over half of its 7,500 staff.
The firm said consult鈥檚 revenue grew 7% last year to 拢366m with the business expected to post 20% growth this year to take turnover close to 拢450m.
Mace wants turnover to be 拢500m by 2026 under a five year plan but group chair and chief executive Mark Reynolds said the figure could be reached two years early and was likely to end up north of 拢550m.
Consult now employs 4,700 people at Mace 鈥� around two-thirds of its group staff 鈥� a rise of more than 80% from the 2,600 it employed just two years ago.
The business has been growing on the back of winning work overseas such as a deal to build 75 schools in Peru, a contract to revamp rail links in Ontario, Canada, as well as increasing amounts of work in Asia following last year鈥檚 partnership with Tenman Project Management in which it has a controlling stake.
鈥淚 can see [the] 拢500m [target] being surpassed in 2024 with a fair wind,鈥� Reynolds said. Operating profit at the consulting business jumped 44% to 拢35m last year.
Mace鈥檚 overall group revenue was up 12% to 拢1.9bn with pre-tax profit more than doubling from 拢16.7m to a record 拢38m.
Its biggest arm by turnover remains construction with 拢1.5bn of income, up from 拢1.2bn last time, making it responsible for just over three-quarters of its business. Operating profit also was on the up, by 62% to 拢56m.
The firm said the value of its construction management contracts last year, which included the second phase of the Battersea Power Station redevelopment, dropped 15% to 拢382m although the firm does not include the figure in its revenues.
But Reynolds said some jobs its construction arm, which employs nearly 1,600 people, that had been expecting to get the green light had stalled because of rising costs. 鈥淏etween March and June [this year] we had five major tenders worth 拢500m delayed or cancelled.鈥�
He said one scheme, worth upwards of 拢150m for a private client, had been pulled completely after failing to agree a price.
He added: 鈥淪ome clients have asked us to go back and look again at the price. Some projects have slipped undoubtedly because of inflation.鈥� Reynolds admitted that the uncertainty meant its projected turnover this year of 拢2.15bn was being revised down to just over 拢2bn but said its 2026 target of 拢3bn was still within reach.
The fallout from last week鈥檚 mini-budget will test developers鈥� nerve to stick with schemes, he added, with the prospect of further currency fluctuations and interest rate rises to come.
鈥淲e鈥檙e in for a bumpy few weeks but we went through this after the Brexit vote and it calmed down eventually.鈥�
But he added clients and funders were running the rule more than ever over how proposed schemes stacked up financially. 鈥淭here is lots of money in the market, with things like private equity, but funds will only be deployed if the appraisals work. If it doesn鈥檛 work, they won鈥檛 do it.鈥�
Mace improved its average payment time by a day to 29 days last year and said 94% of invoices, including those in dispute, were paid within 60 days.
The firm said exceptional items totalled 拢12.5m last year which included a software expense of 拢2.5m. Mace also received a 拢2.1m covid loan handed to its US business that was later written off by the US government. Its year-end order book stood at 拢2.8bn.
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