Mace boss sings praises of new government as firm posts record set of results

Mace chief executive Mark Reynolds has praised the new Labour government’s start to running the country, hailing its commitment to putting construction at the heart of its growth plan.

Reynolds, who is also co-chair of the Construction Leadership Council, said he had already met several key figures including chancellor Rachel Reeves, business secretary Jonathan Reynolds and the soon-to-be appointed construction minister Sarah Jones.

“It’s pretty impressive how they’ve got out and are speaking to people,” the Mace boss added. “They have growth ambitions and they have a willingness to engage with business.”

He said “there were pockets of it” under the previous administration but said Labour had hit the ground running since its landslide election win. “I’ve never seen this [level of engagement] as strong. They’re following things up, I’ve not seen that before. It’s quite intense but they want to move forward. I think the officials [at government departments] are pretty enthused at the moment.”

Reynolds was speaking as Mace delivered a record of results for 2023 with the firm seeing revenue jump a quarter to more than £2bn and pre-tax profit up by two-thirds.

The firm said turnover rose 25% to just under £2.4bn with pre-tax profit up 68% to £62m. Operating profit nearly doubled to £64m.

Turnover at its biggest business, construction, was up a quarter to £1.7bn with 60 projects won during the year with a combined value of £2.4bn. And its consultancy business also grew revenue by a similar number to £619m.

Reynolds said he expected the new government’s plans for public sector spending in areas such as new hospitals, defence and prisons would push Mace’s overall revenue in 2024 to beyond £2.5bn.

But he admitted increased funding for some sectors might see cutbacks elsewhere. “They have to be careful that they don’t take money from other departments such as education and transport.”

Construction’s turnover this year is expected to be north of £2bn, although Reynolds said commercial work was expected to slow down.

He added he was noticing more construction management work coming up as firms looked to avoid taking on too much risk on big schemes: “We can’t walk blindly into onerous contract terms. We are seeing a bit more CM coming back into things. £500m-plus jobs we won’t be taking on as a direct contractor.”

The firm’s consult business, until the end of last month headed by group chief executive-designate Jason Millett, is expected to post a turnover of £675m this year with this nearly doubling to £1.2bn by 20230 – under Mace’s next five year growth plan.

The business recently won the programme management partner role for the MTR Corporation to deliver railway extension projects in Hong Kong and is also carrying out the same function on the Ministry of Justice’s new prisons building programme.

Staff numbers at consult currently sit at around 5,400 with this number due to go up to 5,600 by the year end, Reynolds added. Construction employs around 1,800 people.

Mace now concentrates on construction and consulting work after selling its facilities management business to its management last year with that firm renamed Macro while its developments business is being wound down.

Cash at the year-end was up 14% to £176m while the group’s forward book stands at £5bn. Reynolds said this did not include its work on the HS2 station at Euston, adding enabling works were carrying on until next spring – under the previous government’s funding arrangement after mothballing the job last March – but no further decision had been taken on the wider site.