Hailing "incredible organic growth", UK construction firm Mace today announced it more than doubled pre-tax profits to £23m in 2017 after a troubling previous year. It now plans to intensify international work, which has risen by a third, and to manage skills shortages through offsite techniques and digital innovation.
Construction manager on high-profile UK schemes like London’s Battersea Power Station, Mace saw profits plunge two thirds in 2016 to £10.7m as a result of problem contracts, but said tighter operational controls and more selective bidding had the desired effect of boosting profits on total revenue of just over £2bn, much the same as 2016.
Revealing an ambitious five-year forward plan, the company, which has doubled in size in the last five years, said it would try and attain an industry-beating profit margin of 2.5% by 2022, and toward that end would invest £350m on innovation to increase productivity.
Its innovation strategy prioritises digital project collaboration, a more consistent approach to offsite manufacturing, "lean" construction principles and continuous improvement.
Chief executive Mark Reynolds said Mace invested £50m in research and development last year, and would seek a leadership role in industry innovation.
"Importantly we must now transform ourselves at pace by using the tools available to us," he said. "Only by embracing innovation and offsite solutions will we tackle the skills shortages and become the leader of a more progressive construction industry."
He added: "Over the last five years we have seen incredible organic growth and delivered amazing world-leading projects for our clients. Our 2022 Business Strategy will help us provide even more career opportunities for our people, ensure we remain a resilient and consistently profitable business and deliver projects ‘in a better way’."
Work outside the UK rose by nearly a third in value to £665m, helped in part by the acquisition of Kenyan quantity surveyor YMR and the creation of a South African cost consultancy joint venture, MMQSMace.
Thirty percent of Mace’s turnover now comes from overseas and the company said it will build on that by seeking major infrastructure projects globally and by investing in its North American, Indian and Australian businesses.
Mace employs 5,726 people in six continents, a 13% increase over 2016.
While overall group turnover remained nearly flat, the company’s consultancy revenue grew by 17% to £267m in 2017.
Its construction revenue grew 9.5% to £1.83bn.
"The next five years will be some of the most exciting and transformational in Mace’s history," said corporate strategy director Mandy Willis.
"As we increasingly become a truly global supplier of choice for challenging and iconic projects, it is a fantastic time to be working at Mace and be a part of the next stage of our global evolution."
Image: Lucynda Jensen, associate director of construction at Mace (Source: Mace’s 2017 annual report)