Mace suffers £400m Covid construction revenue hit

Aaron Morby 3 years ago

Mace is forecasting that the Covid pandemic has knocked 20% from its targetted £2.1bn revenue for this year.

Covid impacted mainly on the construction division where revenue is expected to be down £400m to £1.26bn this year,

The development division also suffered delivery delays mainly on its student projects, but consulting rode out the storm and is predicting revenue ahead of budget at £363m.

Announcing 2019 results today, Mace chief executive Mark Reynolds said that the firm had been put on a strong footing to cope with the pandemic after enjoying a 30% rise in pre-tax profit to £25m from revenue down to £1.8bn from a highwater mark of £2.3bn in 2018.

Group operating margin during the year was restored to 1.9% from 0.75% in 2018.

Raynolds added that despite the fall in revenue in 2020 prompt action to cut costs meant Mace would remain in profit.

“Although the coronavirus pandemic has meant that 2020 has certainly been a challenging year, our robust performance in 2019 has ensured we have been able to remain resilient in the face of global economic uncertainty and challenging trading conditions.”

He said that construction had now returned to delivering over £120m a month in the fourth quarter and at the end of September Mace had secured 73% of forecast revenue for 2021.

“The international built environment and infrastructure sectors will be feeling the effects of the pandemic for years to come,” he said.

“However, we should not lose sight of the fact that we have a vital role to play in unlocking the economic growth that will drive recovery across the globe.

“As such, it is more important than ever that we all work together to continue to transform our industry.

“We must maintain our commitments to delivering social value, reducing carbon and innovating to find better ways to deliver our projects and programmes – and it is more critical than ever that we collectively invest in the next generation of skills and talent.”

Mace trading divisions
Profit Revenue
2019* 2018 2019 2018
Construct £46m £30m £1,390m £1,954m
Consult £38m £25m £314m £274m
Operate -£1.4m £3m £144m £144m
Develop -£8m £11m £6m £22m

*excluding £49m group services costs

During 2019, average time to pay suppliers continued to drop, from 34 days in 2018 to 26 days in 2019.

Mace delivered more than £688m of construction management work, not included in the overall revenue figure.

The consultancy business grew turnover by 15% to more than £314m in 2019; of which 45% was delivered outside of the UK.

Mace’s development business managed more than £2.1bn of development assets, a 10% increase since 2018.

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