Exclusive: Chief executive Stephen Pycroft lays out target as firm reveals 2011 results with turnover up 9% to 拢928m
Mace is targeting nearly 40% growth through to 2015 after posting a strong set of results for 2011 that saw revenue rise 9% to 拢928m. The firm is on track to break through the 拢1bn turnover mark this year.
Speaking exclusively to 好色先生TV, Mace chairman and chief executive Stephen Pycroft said 2011 had been another good year for the firm, with turnover up 9% to 拢928m and pre-tax profit up 10% to 拢23m. This follows year-on-year growth over the past three years averaging 17%.
Pycroft said the firm, which built the Shard and was part of the CLM Olympic delivery partner consortium (see story, below), was 鈥渄efinitely on track鈥� to break through the 拢1bn turnover mark by the end of the year and was targeting 拢1.28bn turnover by 2015 - a 37% increase on turnover in 2011 and 50% growth on 2010.
He said the slight 鈥渢ailing off鈥� in growth in 2011 - down from 17% in 2010 - was a consequence of the downward pressure on margins and ongoing 鈥渄ifficult market conditions鈥�, with a handful of projects delayed as clients struggled with finance.
鈥淲e haven鈥檛 had many project stopped on us but many have been put back 鈥� and that鈥檚 all down to lack of finance and funding and a lack of confidence in the market,鈥� he said.
Construction turnover at Mace rose 9% to 拢681m in 2011, which comprised 73% of total revenue.
Pycroft said the Shard had lifted Mace into 鈥渢he top of the premier league of contractors鈥�, but that the firm had no immediate plans to chase more tower work, either internationally or in UK.
鈥淚t would be great to build another tall tower 鈥� but it鈥檚 got to be in an area that is controlled and the risk is manageable.
鈥淭here鈥檚 no need for us to get carried away by our own egos and chase around the world trying to deliver another Shard.
鈥淭he aim is to build a nice solid sustainable business and if that means we don鈥檛 build another Shard then 鈥� I鈥檒l be disappointed 鈥� but that鈥檚 life.鈥�
He said that a 鈥渟trong鈥� pipeline of work within London - mainly commercial and residential work - would be enough to 鈥渟oak up the Shard team鈥�. 鈥淥ur pipeline in and around central London is good 鈥� it鈥檚 as strong now as it鈥檚 been over the last three or four four years, if not stronger. The trouble is outside the M25 where there are very few projects going on,鈥� he said.
He did, however, confirm that Mace would be targeting more infrastructure work in a bid to continue to further diversify its business. He said infrastructure revenue made up around 拢80m of turnover - about 12% of Mace鈥檚 construction business - but he wanted to see this rise to 拢150m by 2013.
He said he expected the firm鈥檚 experience delivering the Thames cable car would help it break into the 鈥渢ough鈥� infrastructure market. 鈥淎re we ever going to do a M25 road widening? I don鈥檛 think so 鈥� but for unique projects where clients want something a bit different, they will come to Mace,鈥� he said.
Pycroft, who will step down as chief executive in the first half of 2013, handing over to deputy chief executive Mark Reynolds, said his main disappointment was the slower than anticipated growth in the firm鈥檚 consultancy business, which saw revenue rise 5% to 拢145m, due to the difficult economic climate.
The firm鈥檚 international revenue 鈥� largely programme management work - rose 16% to 拢102m.
Consultancy makes up 16% of total turnover. Pycroft said he would like to see this rise to around 30% in the coming years and plans to target large programme management contracts, both in the UK and overseas, such as the 拢72m contract to deliver infrastructure works in Qatar that the firm won in May as part of a joint venture with EC Harris.
鈥淸Consultancy] has probably suffered more in terms of short term economic pressures, where clients - public and private 鈥� can turnover off the tap very quickly, whereas they can鈥檛 with construction,鈥� he said.
He said Mace would also look at bigger water programmes and waste-to-energy programmes, as well as expanding into defence, with the firm interested in the Ministry of Defence鈥檚 拢400m contract for a strategic partner to manage the defence estate.
鈥淭hat鈥檚 a big programme of work, and we believe we have the expertise and capabilities to deliver it well鈥� he said.
Pycroft hits out at 2012 marketing gag
Mace boss Stephen Pycroft has hit out at the government for failing to act to relax strict marketing rules preventing firms from promoting their involvement in the 2012 Olympic Games.
Pycroft said the firm was prevented from speaking about lessons learned by CLM - the Olympic Delivery Authority鈥檚 (ODA) delivery partner which comprises Mace, CH2M Hill and Laing O鈥橰ourke - by the no marketing rights protocol, enforced by the London Organising Committee of the Olympic and Paralympic Games (LOCOG).
好色先生TV has used its 2012 campaign to highlight complaints from firms that the protocol has gagged them as they seek to capitalise on their achievements.
Pycroft said a document had been prepared by CLM on the lessons learnt through the delivery of the Games, but 鈥渢here is an embargo on it and we can鈥檛 talk in any way shape or form about our involvement in the Olympics鈥�.
鈥淭here are some interest findings whether it be about working together, about how the approach should be delivered 鈥� it鈥檚 really interesting reading,鈥� he said.
This month a report by ODA chair Sir John Armitt recommended the government urgently ease the marketing rules.
However, the government said it would not act until the end of the year. Pycroft said: 鈥淚 find it unbelievable that the government won鈥檛 relax the embargo and allow people to promote the role they have played in delivering what everyone can see is a fantastic project.鈥�
鈥淗ow the government can鈥檛 allow UK construction to promote what is one of the best delivered UK infrastructure projects in the last 20 to 30 years I do not know.
鈥淎nd then they talk about trying to promote UK construction abroad whilst they won鈥檛 let us promote our work in the Olympics.鈥�
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