Mace
Cover image – Nova, Victoria: a mixed-use development by Land Securities.
` Contents
Annual Review
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Introduction: A better way ............................................................ 2 Executive Chairman’s statement .................................................. 4 Chief Executive’s report ............................................................... 6 About Mace: Our life cycle service offer ..................................... 10 2013 at a glance: Our highlights ................................................ 12 Our international presence ......................................................... 15 Delivering for our clients ............................................................. 16 Continued successes ................................................................ 22 Securing future work ................................................................. 30 Our commitment to safety ......................................................... 38 Client focus ............................................................................... 40 Opportunity ............................................................................... 42 Out pursuit of a better way ........................................................ 44 Acting responsibly ..................................................................... 46 One Mace ................................................................................. 48 Annual Report
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Annual Accounts
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Mace
Introduction A better way
Mace works with clients around the world to help shape cities and build sustainable communities for the future. We are changing the way our industry operates because we believe we have found a better way of turning our clients’ ambitions into reality. We are committed to innovation and excellence. We are proud that our constant pursuit of a better way has resonated with our clients and is embraced by our people. As an international consultancy and construction company, we offer integrated services across the full property and infrastructure life cycle. Our experts in programme and project management, construction delivery, cost consultancy and facilities management thrive within our collaborative and entrepreneurial culture.
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Small or large, complex or simple, we strive to find better solutions to our clients’ infrastructure and property challenges. From London to Hong Kong to New York, and dozens of cities and communities in between, Mace is helping clients develop and build facilities that meet the needs of the future. And with experience working on some of the most iconic projects in the built environment, Mace continues to help shape skylines across the world. At Mace our clients are, and always will be, at the very heart of what we do. We pride ourselves on our agile, responsive approach to doing business – one that focuses on the things our clients value most. Our people, too, are renowned throughout the industry for always going that bit further – using their expertise and Mace’s collaborative culture to create a customised service for our clients, adding greater value and building lasting relationships.
Annual Review
Park House, London – the biggest development on Oxford Street in 40 years – was completed in January
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Mace
Executive Chairman’s statement Stephen Pycroft
This is my first message as Executive Chairman, having handed over operational responsibilities to Mark Reynolds at the beginning of 2013. At the end of my first year in this role, I have had the opportunity to reflect both on what the company has achieved in such a short space of time and what the future will hold. I am therefore pleased to report that 2013 represented the 24th successive year of growth for Mace. Our financial performance and the seven-year business plan agreed by the Group Board in 2013 have provided us with a strong platform for the future. Our mission is to work with our clients around the world to shape cities and build sustainable communities. We aim to be industry leaders by driving innovation, excellence and assisting our clients to achieve their business objectives. To ensure our continued growth, the Group Board took two major decisions during the year which I believe will lay the foundations for our future success. The first of these decisions was the development and approval of a seven-year business plan to take us up to the end of 2020. The plan sets out our growth strategy and how we intend to develop a sustainable and stable business in each of our core markets. By 2020 our aim is to become a top 10 UK contractor and a leading international manager trusted to deliver any project or programme – large or small, complex or simple – using our innovative and value-driven approach. We aim to achieve these targets by continuing to develop and improve our existing business, whilst nurturing the trust and relationships we have with our clients and our people. These relationships are the lifeblood of our business and critical to our success. We will look to secure major programmes and projects throughout the world, focusing our efforts on the property, infrastructure, energy, resources, oil and gas sectors in particular. We will continue to build relationships and share our core values with our supply chain who are integral to the success of our business. Internally, we will grow and develop our own integrated service capability to support this strategy.
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Annual Review
In 2013 we took our first steps towards achieving these aims.
broader learning and development work which covers many more
Under Mark Reynolds’ leadership as Chief Executive, we continued
people across the business. We are in no doubt that our people
to win repeat business with key clients and receive high levels of
are the key to our success and the decisions we have made
customer satisfaction.
this year on talent development are a clear demonstration of our
We continued to drive our safety standards towards being the best
continued commitment in this area.
in the industry and we won even more high-profile, large-scale
Our work on some of the most iconic projects in the built
projects throughout the world while delivering for clients on time
environment gives us a unique perspective on our role in
and to budget again and again. We also continued to look for
creating economic and social value for cities and communities.
better ways to deliver for our clients, thanks to the entrepreneurial
As a result of this, during 2013 we took a more strategic view
spirit of our dedicated and skilled people.
on our responsibilities as a company. We empowered the Mace
We successfully increased market penetration in our core markets during 2013, in particular the commercial property and residential sectors in London, the data centre market, in public sector frameworks, and with our long-term global real estate clients. We also began to target new markets – as per our 2020 business plan – where we believe our capabilities can add value to clients. As a result we were awarded substantial commissions in the oil and gas, pharmaceutical, renewable energy and transport sectors. The decision in early 2013 to build our business around five strategic hubs – London, New York, Dubai/Doha, Johannesburg and Hong Kong – began to pay off, with significant appointments secured in all of these key regions. The second major decision we took during 2013 was to recognise the fact that achieving our long term business goals will be difficult without investing more in our people. In January we established a Talent Development Board with a remit to create and manage a broad pipeline of talent in line with our 2020 ambitions. I have personally found this an important and rewarding initiative. Notable achievements of the Talent Development Board during 2013 include the creation of a comprehensive Talent Development Framework, the review and re-launch of our Graduate Development programme and the launch of our flagship Developing Success Programme in partnership with Imperial College, London. These programmes mean that close to 500 Mace people will soon receive targeted development support. This is in addition to our
Foundation to support the communities in which we work and we strengthened Mace’s staff volunteering and matchfunding programmes. Despite challenging global economic conditions, Mace has continued to increase revenue and profit in a structured and sustainable way. The Group Board is clear that as a business our aim is to continue to grow organically as we implement the 2020 business plan. It is a growth strategy which has served us well in the last 20 years and we therefore do not plan to achieve our targets through acquisitions or takeovers. Instead we will continue to invest in our company and our people. We will build upon our key strengths and continue to lead on innovation and excellence in delivery, whilst focussing at all times on the needs of our clients. We also plan to remain a private company; owned, led and run by our senior directors. Mace continues to go from strength to strength and, notwithstanding the undoubted challenges the future holds, we have created a clear and compelling plan for future growth backed by a solid financial platform. I would like to express my appreciation to the Group Board for all their hard work steering Mace towards our 2020 business strategy. I would also like to pay tribute to Chief Executive Mark Reynolds for his determination, focus and leadership of the business through his first full year in the role. Finally, our people. We are fortunate to have some of the best people in the industry and on behalf of the Group Board, I would like to acknowledge and thank all Mace staff for their dedication, entrepreneurial spirit and old-fashioned hard work during 2013.
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Mace
Chief Executive’s report Mark Reynolds
2013 was a strong and successful year for Mace. We continued to help our clients develop and build facilities to meet the needs of the future. We also took our first steps towards implementing the Mace group business plan 2013 to 2020. A key driver of our growth in 2013 was our ability to create opportunities for our people and assist our clients to achieve their business goals and aspirations. We set a strategy making better use of our fully-integrated service offer covering investment services, consultancy, construction and facilities management. Collaboration through the entire life cycle of projects and programmes is key to how we do business. We are confident that our approach of driving efficiency, consistency, and quality through a culture of innovation will result in Mace achieving its aspirations. Mace ends 2013 in a strong and stable position – reflected in our sound financial performance and our robust pipeline of work for 2014 and beyond. Turnover for the year increased 8% to £1.18bn and pre-tax profit rose 14% to £32m. We created 400 more jobs, growing by 14% to make us a company of 3,800 employees. At the end of 2013 our total secured order book stood at £2bn and 75% of our turnover target for 2014 was already secure.
Safety Our safety record continues to be exemplary; however we recognise more needs to be done to improve the safety performance on our projects and programmes. 2013 saw a 32% reduction in the number of RIDDOR injuries (like for like) on our projects despite a 18% increase in the number of people working on our projects. While we achieved an industry-leading Accident Frequency Rate of 0.09, we acknowledge this is still too high. Through the year we undertook a series of new initiatives to help transform our commitment to help realise our goal of creating a culture where ‘safety first’ is ‘second nature’: •
Every major Mace project now has a system of safety performance targets, which uniquely also include specific metrics for staff engagement, leadership, and behavioural observation.
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Annual Review
•
•
More than 50 safety visual standard posters were
We extended long-term client relationships in the global real estate
created in 2013 and disseminated across all Mace worksites,
sector, with Microsoft, HSBC and Citibank, and in the public
using imagery to demonstrate best practice for a range of
sector, with appointments to the UK Home Office, and University of
work tasks.
Nottingham amongst others. Our infrastructure division won its first
A major initiative for 2013 was a comprehensive UK cycle safety programme. We now ensure all vehicles over 7.5t in our UK supply chain over 7.5t meet the Transport for London Freight Operator Recognition Scheme (FORS) bronze standard. We are also ensuring suppliers demonstrate
major project with the UK Highways Agency, where we will be the programme integrator for the A14 road between Cambridge and Huntingdon. In a significant move for Mace, we took our first steps in the oil and gas markets by securing a global framework with Halliburton and Exxon Mobil and an Americas framework with BP.
progress towards achieving FORS Silver by mid-2014. Our
We are particularly excited about our future prospects in
active participation in the campaign has contributed to a 60%
the pharmaceutical sector where we have extended our
increase in FORS registrations across the industry. Further, we
relationship with GlaxoSmithKline (GSK) to include the USA and UK
have started to implement the new Work Related Road Risk
as programme manager on their research and development estate.
(WRRR) national standards for construction logistics, which
We also secured new commissions with Ferring Pharmaceuticals
crucially includes clients, designers, contractors and the
and Novartis.
supply chain. Full compliance expected by mid-2014. While our commitment to safety is simply to ensure everyone can
All of this means that we have a very healthy pipeline and a clear expectation for growth in 2014.
go home at the end of the day safe and well, we are proud that the British Safety Council has recognised our work by awarding Mace the highly coveted Sword of Honour in 2013.
Project completions We continued to demonstrate an unwavering focus on meeting
Growth
the needs of our clients through the number of successful project completions during the year. In London, we completed The Place
Our stability has been fuelled, in part, by our successful
for Sellar Property Group on behalf of LBQ Ltd, and Assam Place,
appointments during 2013. We secured a raft of iconic
a mixed-use development and our first investment project in
construction projects in London, including Nova, Victoria with Land
joint venture with Alternative Developments. We completed the
Securities, South Bank Tower with CIT, W5 Regent Street with The
restoration of the iconic Great Northern Hotel at King’s Cross,
Crown Estate, Battersea Power Station for the Battersea Power
London, for Aries GNH. We also completed the Horizon Data
Station Development Company, One Angel Court for Stanhope
Centre for Lloyds Banking Group, the new Coronation Street
and Mitsui Fudosan, Phase Two of Sky’s master plan development,
studios in Manchester for ITV, and The University of Oxford’s
Vauxhall Sky Gardens for Frasers Property Ltd, and the Newington
Kennedy Institute of Rheumatology.
Butts residential development for the Greater London Authority.
We project managed the construction of around 100 schools
In a joint venture with EC Harris, we were in 2013 appointed as
across the UK, finished the first phase of the Birmingham
project manager of the world’s tallest building, Kingdom Tower in
New Street station transformation project, and completed the
Saudi Arabia. Mace also became the preferred tenderer for a major
construction management of phase two of the Sha Tin Racecourse
project management role in the Australian defence industry, in a
development in Hong Kong.
joint venture with Aurecon.
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Mace
Chief Executive’s report Mark Reynolds contd.
Elsewhere around the world, Mace completed the No.1 and
We also made a significant further investment in our systems and
No.2 Silo residential project in Cape Town, South Africa; designer
processes, streamlining our procedures to enhance information
clothing retailer Belstaff’s flagship store in New York; and the Port
security and creating more efficient systems to improve
Baku Residences in Azerbaijan.
consistency as we grow. For example, we have continued to invest in our Building Information Modelling (BIM) capability and have committed that all our projects will adopt Level 2 BIM by 2016. I
People In 2013 we created 400 new jobs and ended of the year with 3,800 employees. Mace plans to be an employer of 7,200 of the best people by 2020. To help us achieve this, our new Talent Development Board will provide a platform to support our future leaders to broaden their experience and skills. We have also established a development programme that will extend to many more of our staff in the years ahead.
am pleased to report that we are now an industry leader in the use and application of this technology. Environmental sustainability We made further progress during 2013 to reduce the impact that our operations and projects have on the environment. 96% of waste from our projects was diverted from landfill in 2013 – a greater proportion than ever before. Responsible sourcing continued to increase, with 98% of timber now coming from FSC sources.
Corporate responsibility
We took our commitment to sustainability to a new level in 2013 by
During 2013 we took further steps to mitigate our impact as a
launching the Mace Energy Hub, an innovative energy purchasing
business, lay foundations for the long term sustainability of the
strategy for Mace and its clients. The Energy Hub uses 100%
company, and make a positive and lasting contribution to the
green energy from a single preferred supplier, and has already
communities in which we work. Our corporate responsibility
resulted in a 68% reduction in carbon emissions for sites where
strategy is founded on three key pillars: ‘Sustainable business’,
Mace pays the energy bills.
‘Environmental sustainability’ and ‘Supporting our communities’.
Meanwhile at our 5 Broadgate construction site in London,
Sustainable business
an innovative responsible procurement process created by
The decision by the Group Board to agree a 2020 business plan
the Mace team is becoming an example of best practice for the
was about ensuring we continue to focus on the company’s longer term needs and vision. We began the process of implementing this plan in 2013 by engaging with staff through a series of face to face strategy sessions, making it clear to our people that they are key to our long term success. Our aim is for our people to have
wider industry. Gutenborg, the major residential development in St Petersburg, Russia, continues to use the latest BIM expertise to bring significant time, cost and sustainability benefits to our client.
rewarding and enjoyable careers at Mace as we grow in a planned
Supporting our communities
and sustainable way.
Established in late 2012, the Mace Foundation started its work in 2013 towards the goal of enhancing the communities in which Mace works. The Foundation supports Mace’s wider corporate responsibility activities such as volunteering, mentoring, education and employment programmes, and work in local communities.
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Annual Review
British Museum, World Conservation and Exhibitions Centre, London, UK
A key milestone for the Foundation during 2013 was the establishment of six strategic partnerships with charitable organisations that reflect Mace’s vision and values: WheelPower, The Prince’s Trust, Coram, Teenage Cancer Trust, LandAid and RedR UK. During 2013, Mace donated the equivalent of 1% of our pretax profit through the Foundation. Mace also supported the Foundation by providing for all overheads such as marketing, communications and building services. As a result, the Foundation was able to make donations and contributions of over £330,000 to worthy causes. I am pleased to report that the Foundation’s first year has been a huge success and I look forward to this continuing in 2014.
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Mace
About Mace Our life cycle service offer
Services
Invest
Consult
Investment
Programme management Project management Cost consultancy
Real estate
Architecture and engineering BIM Construction design and management regulations Information and communication technologies Preconstruction Risk Sustainability and socio-economics
Sectors
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Regeneration
Transport
HafenCity Ăœberseequartiers Hamburg, Germany
Heathrow Control Tower London, UK
Arts and culture
Education
Science and technology
Hotels, leisure and sport
Tate Modern London, UK
Roundwood Youth Centre London, UK
Hong Kong Science Park Hong Kong, SAR China
Baha Mar Resort Nassau, The Bahamas
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Construct
Operate
Construction delivery Fit out
Facilities management Managed services
Contracting
Facilities management consultancy
Logisitics
Helpdesk services
MEP Secure construction
Residential
Commercial offices
Gutenborg St Petersburg, Russia
The Shard London, UK
Energy and utilities
Public estates
Healthcare
Retail & mixed use
Hinkley Point Somerset, UK
Hampshire Constabulary Southampton iESE Southampton, UK
Spire Healthcare Edinburgh, UK
One Airport Square Accra, Ghana
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Mace
2013 at a glance Our highlights
Health and safety highlights Our safety record continued to outperform construction industry standards, thanks to our ‘Safety first. Second nature.’ strategy. Like for like, we recorded a
32%
People highlights
There was also a
18%
+
increase in the number of people working on our projects. Project teams around the world continued to clock up millions of accident free hours.
reduction in the number of RIDDOR injuries on our projects in 2013.
We created more than
...to make us a company of
400 3,806 new jobs in 2013...
...representing a growth of
We also recruited
14% 60
+
on 2012.
p.38
directly employed staff...
for our Graduate Development Programme and seven college leavers to our Construction Training Programme. p.42
Our commitment to safety
Financial highlights
Corporate responsibility highlights
Mace achieved all of its financial targets for 2013. Turnover increased 8% to
The Mace Foundation had an impressive first year of operation, making donations and contributions of over
£1.18bn £32m 75% p.52
Financial report
£330k
to charitable organisations and establishing six strategic partnerships with organisations that reflect our vision and values.
...with pre-tax profit rising 14% to
of our turnover target for 2014 was already secured by the end of 2013.
Mace also helped
464
local people get into work, either with Mace, our supply chain or other stakeholders...
...and provided
898
people with careers advice and support. p.46
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Our people
Acting responsibly
Annual Review
WheelPower’s Time to Shine event, Queen Elizabeth Olympic Park, London, UK
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Mace
The Place, London, UK Image courtesy of LBQ Ltd
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Annual Review
2013 at a glance Our international presence
UK
Mainland Europe
Headcount
Headcount
% of Group total
% of Group total
2,547 67%
Headcounts do not include consultants and temporary employees
420 LDN
11%
NYC
DXB DOH
HKG
Americas Headcount
JHB
107 % of Group total
3%
MENA Headcount
Turnover by service (2013)
Sub-Saharan Africa
492
Headcount
% of Group total
81
Global Consultancy: £102m (8%)
% of Group total
UK Consultancy: £175m (15%)
2%
UK Construction: £904m (77%)
p.52
Financial report
13%
Asia Pacific Headcount
159 % of Group total
4% p.48
One Mace
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Mace
2013 at a glance Delivering for our clients
Hong Kong Jockey Club Phase 2, Hong Kong, SAR China Mace completed the second phase of this development to update the club’s Sha Tin Racecourse on time and within budget. It involved significant structural works to demolish and rebuild portions of the grandstands, installation of new restaurants, lifts and E&M systems and a new glass façade for the grandstand.
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Fairmont The Palm, Dubai, UAE A five-star beach front resort located on Dubai’s Palm Jumeirah Island, with 381 bedrooms and ten apartments. With a project team of 17 multi-disciplined local and US consultants, Mace was pivotal in managing this diverse team and driving a successful completion.
Annual Review
No. 1&2 Silo, Cape Town, South Africa Standing on a sea front location this 22,000 square metre mixeduse development providing office and residential accommodation, No. 1& 2 Silo was part of the regeneration of the Victoria and Alfred Waterfront in Cape Town. Appointed as project manager and principal agent, Mace oversaw the whole project from the initial feasibility through to construction.
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Mace
2013 at a glance Delivering for our clients contd.
Image courtesy of LBQ Ltd
The Place, London, UK As a 17-storey office building, you might assume The Place is overshadowed by its elegant sister building The Shard. In fact, the building’s ingenious cantilever and a location next to a major transport hub resulted in an engineering marvel, requiring the highest levels of expertise in engineering, safety and logistics to deliver.
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Annual Review
Port Baku Residences, Baku, Azerbaijan Mace provided integrated project, construction and cost management services on this large-scale, residentialled mixed-use development. Offering unobstructed views of the Caspian Sea, the project delivered three towers containing 872 high-end residential apartments.
Mindshare Expansion, Miami, USA Mace provided project management services, prelease negotiation and final move-in for the advertising agency Mindshare’s 4,000 sq ft expansion project in Miami, US. A creative use of colour and space was applied in line with the company’s global brand style and guidelines for its corporate offices. This project was the third of its kind for this client in Miami. The client was successfully transitioned into the new space prior to the busy holiday period.
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Mace
2013 at a glance Delivering for our clients contd.
Heathrow Terminal 1 Baggage System, London, UK Mace’s expertise of working in Heathrow helped shape and deliver this technically demanding project safely. Mace put in a new baggage screening system and relocated and diverted existing systems, all carefully scheduled to minimise disruption to one of the world’s busiest airports.
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Assam Place, London, UK Co-investor, developer, project manager and contractor – Mace played a major part in transformation, with partner Alternative Developments, of this disused brewery and whisky warehouse into a stylish, BREEAM Excellent mixed-use development, which combines luxury student accommodation with premium commercial space.
Annual Review
Albert Hall Renovation, Manchester, UK In 2013, Mace was appointed as project manager and cost consultant to deliver phase 1 fit out works at the magnificent Grade II listed Albert Hall in Manchester, UK. The grand building, a forgotten Wesleyan Chapel, includes a horseshoe gallery complete with an old pipe organ and coloured glass rooflights. It was used as a key venue for performances in the Manchester International Festival in 2013.
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Mace
2013 at a glance Continued successes
Ashghal, Qatar Mace and EC Harris are delivering a major programme of infrastructure projects across the state. On behalf of Qatar’s public works authority, they are overseeing delivery of education and healthcare facilities, ports and waterfront developments, hospitality and sports facilities, and parks and recreational areas.
Baha Mar, Nassau, Bahamas Occupying more than 1,000 acres, with half a mile of uninterrupted beachfront and four luxury hotels, Baha Mar will be the largest single-phase destination resort developed in The Caribbean. An embedded Mace team is using its substantial expertise to help complete this world-class development.
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Annual Review
Gutenborg, St Petersburg, Russia Aiming to house 22,500 people over the next five years, Gutenborg is one of the largest and most complex construction programmes in Europe. As delivery partner, Mace is playing a vital role in ensuring this massive project stays on track. A key benefit is the use of Building Information Modelling (BIM) technology to standardise production and take a year off the programme. With the first phases well underway, this standardisation is proving essential, enabling components to be factory fabricated then assembled on site, improving the schedule and reducing risk.
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Mace
2013 at a glance Continued successes contd.
Birmingham New Street, Birmingham, UK Transforming a 1960s railway station into a 21st century transport hub is a complex challenge. Appointed as delivery partner and principal contractor, Mace is delivering more than 50 work packages while the station remains operational throughout the period of refurbishment, which will complete in 2015. Mace reached the half-way point of this massive, technically demanding project in 2013, opening three new entrances to the station and new ticket offices and retail facilities and a new concourse. Over 100 apprentices have also been taken on so far to work on the programme.
Green One UN House, Hanoi, Vietnam Mace is working as construction manager on the Green One United Nations House project in Hanoi, Vietnam. This project involves refurbishing an existing 5,400 square metre building and increasing the floor space into a 7,400 square metre new headquarters for the UN in Vietnam, bringing together 14 UN organisations from 11 different locations into one sustainable office.
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SABMiller, International Macro, Mace’s facilities management business, has been providing a full facilities management service to SABMiller, the world’s second largest brewers, since 2005. Having successfully renewed its contract in 2013, Macro was also appointed to manage the refurbishment of SABMiller’s corporate offices in Surrey, as well as the fit out of their executive office in London.
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Mace
2013 at a glance Continued successes contd.
Greenwich Square, London, UK Mace is co-investor, codeveloper and delivery partner for this ÂŁ135m three-hectare brownfield regeneration scheme which will deliver 645 new homes, half of which will be social housing. As part of the Open Doors initiative, which showcases the diverse range of careers available in the construction industry, local schools and colleges visited the project to see how construction was progressing.
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Annual Review
Coronation Street Set, MediaCityUK, Manchester, UK ITV’s new 7.7 acre production facility, unveiled to the press in November 2013, provides film, production and support facilities for one of its most well-known shows, Coronation Street. Construction manager Mace oversaw the wholesale recreation of the show’s set in a meticulously planned programme of works. A total of 54,000 cobbles were used, many recovered from canal side developments in Salford and Eccles.
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Mace
2013 at a glance Continued successes contd.
Queen Elizabeth Olympic Park, London, UK As part of the CLM delivery partner organisation, Mace helped create one of the most successful Olympic and Paralympic Games in history. Now leading the post-Games legacy project, Mace is transforming the former Olympic Park into a community facility and tourist destination for future generations. Mace has helped to transform over 200 hectares of green space, the permanent Games facilities – including iconic venues such as the Copper Box Arena former handball venue, Lee Valley VeloPark, the London Aquatics Centre and the main Stadium – and the temporary infrastructure as part of the first phase of the new Park.
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British Museum, World Conservation and Exhibitions Centre, London, UK This £135m project for the British Museum was delivered to safeguard and enhance its collection for future generations. In 2013 construction manager Mace completed the stunning Sainsbury Exhibitions Gallery, the first phase of a scheme which will also deliver worldclass storage, state-of-the-art laboratories and studios and provide facilities to support the Museum’s extensive UK and international loan programme.
Hinkley Point, Somerset, UK EDF Energy is leading the UK’s nuclear renaissance and has published plans to build two new reactors at Hinkley Point in Somerset, subject to the right investment framework. Mace has 50 people seconded into EDF Energy working as part of an integrated team. The team provides services including project management, commercial, project controls and CDMC delivery.
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Mace
2013 at a glance Securing future work
© Jeddah Economic Company
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Kingdom Tower, Jeddah, Saudi Arabia
Port Baku Towers 2, Baku, Azerbaijan
A desert plant, a symbol of Saudi Arabia’s growth and ambitions, the world’s tallest building – the Kingdom Tower is all these things and more. Mace will be project managing construction, in joint venture with EC Harris – with our world-leading expertise in delivering tall towers a major reason for our appointment.
Mace is project and construction manager for this highspecification commercial office complex, comprising of two towers – one 22 storeys high and one 47 storeys – rising out of a three storey retail podium with undulating glazed facades facing the Caspian Sea.
Annual Review
Battersea Power Station, London, UK Mace was appointed as construction manager for the Battersea Power Station preliminary works, helping to create a new distinct quarter of central London with one of the world’s most famous buildings at its heart. The team is responsible for managing trade contractors, which are undertaking the £100m works package comprised of brick repairs to the elevations, the repairs to the four wash towers, and the dismantling and reconstructing of the chimneys.
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Mace
2013 at a glance Securing future work contd.
South Bank Tower, London, UK The South Bank Tower, formerly King’s Reach Tower, is an existing 32-storey building which is being redeveloped, with two floors removed and 11 added, to create a 41 storey luxury development situated on the South Bank of the Thames between Blackfriars Bridge and Waterloo Bridge. Mace is working as main contractor on this project, transforming the Tower to provide residential, commercial and retail space.
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Annual Review
Almaza City Centre, Cairo, Egypt When it opens in 2017, Almaza City Centre will be a major shopping, entertainment and leisure developments in Egypt, housing shops, restaurants, cinemas and food courts. Mace is project managing this high-profile development, which targeting a silver LEED accreditation.
One Angel Court, London, UK One of the City of London’s landmark office buildings, Mace is construction manager for the refurbishment of One Angel Court on behalf of Stanhope and Mitsui Fudosan, which on completion will provide 25 floors of highquality office space.
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Mace
2013 at a glance Securing future work contd.
New Doha International Airport, Doha, Qatar Mace was appointed by the New Doha International Airport (NDIA) Steering Committee in Qatar to provide project management, cost management and construction management services at the NDIA. Working with multiple stakeholders across the globe, the team developed the duty free warehouse and in-flight duty free store, a fire training facility, the first passenger rail system box for the Doha Metro and the fit out of the ground support engineering facilities, facility management facilities and the Aircraft Maintenance Hangar. The airport will accommodate 50 million passengers, two million tonnes of cargo and over 360,000 aircraft movements annually, including the new A380 fleet of Qatar Airways.
National Oilwell Varco, Kostrama, Russia Mace was appointed by National Oilwell Varco (NOV) for design, project management, construction management and technical client services on its planned production facility at in the city of Volgorechensk in Kostroma, Russia. The first stage of the plant development will cover an area of 13 hectares. This project is expected to complete in 2015.
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Nova, Victoria, London, UK Mace is main contractor for the first phase of the Nova, Victoria scheme, a major part of the transformation of Victoria, central London. The result of almost two years’ preconstruction advice, phase one will offer high-quality 480,000 sq ft of office accommodation, 80,000 sq ft of retail and restaurant space and 170 luxury modern apartments within three architecturally striking buildings.
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Mace
2013 at a glance Securing future work contd.
A14 Cambridge to Huntingdon trunk road improvement scheme, UK Mace is project manager for this £1.5bn road improvement scheme, which involves the construction and widening of more than 25 miles of trunk road in Cambridgeshire. It tackles long-standing problems of congestion on the road and will unlock large-scale house-building and urban regeneration projects in the area.
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Sky, London, UK Mace is constructing two new buildings as part of Sky’s campus development activity at its Headquarters in West London. As construction is taking place next to live broadcasting studios and in the midst of Sky’s fully operational headquarters, this project has required extensive planning, particularly with regard to noise levels and safety.
Annual Review
Port Authority Headquarters at 4 WTC, New York, USA Mace is providing project management, cost management and move management services to the Port Authority, supporting the relocation of its headquarters to the Four World Trade Center building at 150 Greenwich Street. As project manager and cost manager, Mace will coordinate the development and delivery of planning, design, construction work and commissioning of the tenant improvement program.
QP District, Doha, Qatar A five-year facilities management consultancy contract to support Qatar Petroleum’s relocation to a new headquarters complex in Doha. Services include a strategic review of the base build and fit out designs, an FM strategy, an asset management plan, a procurement strategy, FM tender documentation and a host of specialist facilities management services.
37
Mace
Our commitment to safety
We make the wellbeing of our people our top priority everywhere we work by nurturing a culture that lives and breathes health and safety.
A site operative working at height on the hollandgreen project in London.
38
Annual Review
The highest standards of safety
It is a simple, but effective campaign. Everyone asks themselves
Safety is at the forefront of everything we do as a company. Our
four simple questions before starting work (or directing others
aim is to be a leader in safety performance and management, not just within construction but across the industry as a whole. In 2013, we saw a 32% reduction in the number of RIDDOR injuries on our projects, despite 18% more people working on our sites over the year.
to work): •
are you in a safe place?
•
do you have a safe system of work?
•
are the correct safe tools, plant and equipment available for you to use?
Mace has outperformed the construction industry’s health and safety standards consistently by around 70% in the past six years.
•
‘Safety first. Second nature’, our company-wide safety initiative,
If the answer to any of the questions is ‘no’, the response is simple
has delivered a step-change in the way that we work.
– do not start work until it is safe to do so.
are your colleagues safe?
Specifically, it has enabled us to communicate safety messages in a simple and succinct way on sites and in office environments to help drive safe behaviours. Here are three examples of the kind of clear communications that have helped us achieve industry-leading safety standards during 2013: Observe, Engage, Improve Observe, Engage, Improve is our original campaign aimed at prompting all staff on site to take notice of what is going on around them as they work, to highlight potential safety risks, and to take action to resolve them. Safety targets Every Mace project director is responsible for developing safety targets for their projects aligning to the company-wide ‘Safety first. Second nature.’ strategy. Targets are displayed prominently on site on posters to visually communicate their expectations for the coming year to their teams and stakeholders. Four Steps to Safety Our Four Steps to Safety initiative is focussed on improving
Halfway through our ‘Safety first. Second nature.’ strategy we achieved a
32%
reduction in the number of RIDDOR injuries on our projects...
...despite an
18%
increase in the number of people working on our projects.
At New Doha International Airport, we reached
...and our combined RIDDOR, lost time and first aid incidents dropped by
working hours without a reportable incident – a new record for Mace...
compared to 2012.
12m
42%
Birmingham New Street received a five star rating in an external audit by the British Safety Council, and the Horizon Data Centre was awarded two prestigious awards by the British Safety Council after 2m hours without a reportable incident.
workforce and site safety. It reminds our project teams and suppliers to consider safety immediately prior to commencing work on their site.
39
Mace
Client focus
We aim to be an agile, responsive business that focuses on building a deep understanding of our client’s needs and aspirations.
Sky campus masterplan development: the Believe In Better building, London.
40
Annual Review
Reaching for the Sky Mace has been retained to construct two new buildings as part of Sky’s campus development activity at its headquarters in West London. Construction of the first building is due to complete in summer 2014, and the second at the end of 2015. Mace has worked closely with Sky to deliver the vision for these buildings, due to receive outline planning permission in early 2014. A design review initiated by Mace has addressed use of space, as well as the safety and quality of certain structural elements. Safe working is a key priority for this project. Sky and Mace have worked together to ensure that construction on the site adheres to industry-leading safety practices.
Long-term relationships count Developing long-term relationships with our clients enables us to build a unique understanding of their needs and objectives, and our emphasis on collaboration and adaptability is crucial to successful delivery.
In our client surveys throughout 2013
...while
said they would use Mace again, with the same percentage saying that they felt Mace understood their objectives...
were satisfied with the service Mace provided.
94%
81%
“We are delighted to be working with Mace in the creation of two state-of-the art buildings to promote the well-being, creativity and productivity of the thousands of employees working at our Osterley HQ. We have worked closely with Mace to ensure that the new facilities have a positive impact on our people, our business and the local community and we look forward to the successful delivery of this project.” John Nicholson OBE Sky Programme Director
We have on-going relationships with some of the world’s largest companies – such as HSBC, Lloyds Banking Group, Halliburton, Exxon Mobil and Invesco – and provide consistent and efficient services to manage their global real estate portfolios. At Heathrow Airport, we have been working continuously for more than 20 years, delivering a range of essential projects. Repeat business is also a large part of our construction work, with major clients including Land Securities, The Crown Estate, British Land and Ashghal Public Works Authority in Qatar.
41
Mace
Opportunity
At Mace our focus on excellence, innovation and client relationships means we take the challenge of attracting the best people and extending their skills seriously.
Mace graduates on the developing success programme at Imperial College, London.
42
In return, our people have the opportunity to work on some of the industry’s most high-profile and challenging projects and programmes across the world.
Annual Review
Mace’s Executive Development Framework In 2013 we introduced the Executive Development Framework to create a talent pipeline and support our people at key transition points in their careers. This included a revamp of our Graduate Trainee and Construction Trainee schemes, which provide essential preparation for first roles at Mace. We also introduced ‘Developing Success’, the next stage in the Framework. This is being run in partnership with Imperial College, London and is designed to develop leadership and business development skills.
Developing talent Our long-running graduate scheme recruited 60 graduates during 2013, drawn from a range of disciplines – reflecting the diverse nature of Mace’s service offer. Rachael Park joined the scheme in 2011 as a trainee cost
60
young people were recruited onto the graduate programme...
21
school and college students took part in Mace’s first ‘Careers in Construction’ week, to learn about working in the industry, and...
24%
of which were female, a rise of 9% on the previous year.
7
Construction Trainees were recruited to Mace projects in 2013.
“The Construction Trainee programme is all about developing the site managers of the future, I want to stay with Mace and become a key member of the construction team.” Aaron Higginson Construction Trainee
consultant. “I wanted to be involved in projects from start to finish – as a trainee cost consultant you get that,” she said. The two-year programme aims to strengthen graduates’ technical skills as well as improving presentation skills and problem solving. “This was fantastic,” says Rachael. “It helps you to ask the right questions and see both sides of an issue.” For Aaron Higginson, part of Mace’s Construction Trainee programme for college leavers, the mix of ‘on the job’ project experience with day release study was a massive benefit. “Mace really pushes you to do the best you can,” he said. “It sets you up for the future nicely.” Both Rachael and Aaron are keen to stay on at Mace once their training programmes finish. “The Construction Trainee scheme is all about developing site managers of the future,” said Aaron. “My ambition is to stay with Mace and become a key member of the construction team.” Rachael agrees. “I’m really interested in BIM. I want to repay the investment Mace has made in me, and help develop more efficient ways of working in an increasingly digital world.”
43
Mace
Our pursuit of a better way
We strive to challenge the status quo. Our passion is to bring new, innovative and sustainable ideas to our projects and we have the insight and commitment to see them through for the benefit of our clients.
The basement plantroom at 5 Broadgate, London.
44
Annual Review
Better buildings through BIM
Embedding innovation
The innovative use of Building Information Modelling (BIM)
The Mace Innovation Forum is just one of the ways we make
technology was a driver for success during 2013 at our 240
good ideas count. Forum members are drawn from across the
Blackfriars project site in London.
company and focus on driving improvement in the way we work,
An architecturally striking, 19-storey tower on the South Bank of the River Thames, designed by Allford Hall Monaghan Morris for Great Portland Estates, 240 Blackfriars provides more than 20,000 square metres of high-quality office space. BIM was introduced to the project to drive efficiency and minimise programme risk, with implementation led by a joint Mace and client team. The technology enabled the site team to visualise the construction and logistics process in a virtual environment. The entire delivery team, including the specialist trades, could then address design and construction challenges in real time, significantly reducing the risk of misinterpretation of two-dimensional drawings.
in knowledge sharing practices, embedding new technology, and how to ensure innovation on one project site is captured and shared globally. Mace is an industry leader in the use of prefabrication techniques to improve quality and safety on major construction projects, particularly for MEP services. Our prefabrication approach was used to great effect on The Shard and 5 Broadgate projects in London where pre-assembly has reduced on-site labour by 50%. Mace formed its own contracting MEP business in 2006 to drive innovation and the business is already using its expertise on other major projects in London – Nova in Victoria, the South Bank Tower and the Sky campus to improve speed of construction, improve site productivity and reduce cost.
The technology was particularly useful for the three-storey plant zone at roof level, situated within a complex triangular shape. BIM helped the team refine the construction sequence, ensuring this difficult stage could be delivered with greater ease and speed. Overall, BIM has allowed for a higher level of coordination, improved design quality, better programme certainty, and reduced the risk to both programme and budget for the 240 Blackfriars project. We believe the application of BIM on this site during 2013 is an exemplary case study for future construction projects not only
“BIM will bring clarity and improved communication to projects. It will help to mitigate risk and ultimately lead to increased efficiency.” Professor David Philp Head of BIM at Mace and Head of BIM implementation at the UK Government Cabinet Office
within Mace, but the construction industry as a whole.
45
Mace
Acting responsibly
Mace is committed to upholding high ethical standards in all our operations, everywhere in the world. We lead by example and act responsibly to make a positive contribution to our communities.
A young person at WheelPower’s residential Time to Shine event, Stoke Mandeville Stadium, UK.
46
Annual Review
Mace Energy Hub
In 2013 over 550 employees across Mace volunteered on
The Energy Hub was established in 2013 as part of an innovative
community regeneration projects and the enhancement of local
energy purchasing strategy, to bring together previously disparate
biodiversity for charities including the London Wildlife Trust and the
energy procurement processes into a centralised function.
Canal & River Trust.
The purpose of the hub is to manage procurement, provide central
Mace also runs a range of employment and skills services for local
forecasting and reporting, visibility of consumption and regulatory compliance. Energy is provided by a single preferred supplier and is 100% renewable.
people and students. In 2013, this included support on curriculum development, work placements, site visits and visiting lectures for training and projects.
The Energy Hub has an integral link to the Mace Sustainability team and works with all Mace project teams to share energy management best practice and behaviours. The Energy Hub has made substantial cost reductions in addition to a 68% reduction in carbon emissions for sites where Mace pays the energy bills. Mace continues to explore innovative ways to reduce consumption and promote energy efficiency on site.
Time to Shine Mace supports Time to Shine, a pan-disability multi-sports
“As well as giving unique sporting experiences for young people, ‘Time to Shine’ provides outstanding social and life skills such as encouraging friendships, independence, increasing self-esteem and self-confidence. These are by far the greatest benefits of the programme.” Martin McElhatton Chief Executive, WheelPower
programme for young disabled people as part of the Sport England
Across Mace, over
and London Legacy Development Corporation funded project,
employees volunteered, undertaking vital and wide ranging work for many different charities and groups...
Motivate East. In 2013 over 350 young people between the ages of 11 and 18 from the six London boroughs surrounding Queen Elizabeth
550
Olympic Park came together for a week-long residential event and a sporting day. The Time to Shine events transform the lives of disabled people who do not fit into mainstream physical education or sports provision with many of them experiencing sport for the first time.
Community work Mace is committed to supporting the communities in which it operates. We provide financial support to community investment programmes and pro bono and volunteering work through our people.
We created
464
...while the Mace Foundation had an impressive first year, donating over
£330k
to charitable organisations and our six strategic partnerships. ...and
jobs for local people across all our projects...
898 68%
people were provided with careers advice and support towards developing their employment.
reduction in carbon emissions due to better, greener procurement.
47
Mace
One Mace
We deliver a consistent, quality service wherever we are in the world, sharing knowledge across borders and capturing valuable global perspectives.
FCO in Warsaw, Poland.
48
Annual Review
GSK
Global consistency, local awareness
As one of the world’s leading research-based pharmaceutical
Since 2005, Mace has delivered around 150 construction projects
and healthcare companies, GSK’s success depends on a vibrant
for the Foreign & Commonwealth Office (FCO) across the world,
and dynamic research and development function to bring new
using its experience, knowledge and global reach to do things
medicines, vaccines and other healthcare products to market
better, cheaper, safer and more consistently.
safely and cost effectively.
Mace combines a core team based in London with locally-based
World-class scientific facilities are absolutely essential for this, and
project managers on the ground. A verified supply chain, including
so GSK is upgrading and expanding its core R&D sites to keep
local construction specialists, means every project is completed to
them at the cutting edge. It asked Mace to help put a rigorous
UK quality and safety standards.
programme in place to ensure success. Working as part of an integrated GSK team, Mace programme
All of this enables Mace to deliver a high-quality service in what continues to be a rapidly changing global environment.
management experts are creating a coherent structure, scope, cost and master schedule to govern the individual projects – which are spread across sites in the US and UK – before any construction starts. We work in of over A sustainability roadmap enables delivery teams to create tailored standards for each project, based on GSK’s corporate sustainability targets and local requirements. Individual projects will be delivered by GSK, with activity overseen
70
countries across the globe, consisting of a workforce that speaks over 80 languages...
by a central programme management office (PMO) made up of GSK and embedded Mace staff. The end result is that GSK retains control while benefitting from Mace’s knowledge and expertise in running complex construction programmes.
...coordinated by
5
strategic hubs: London for the UK and Europe; New York for North America and Canada; Johannesburg for SubSaharan Africa; Dubai/Doha for MENA; and, Hong Kong for Asia Pacific.
Our workforce outside the UK Asia Pacific: 159 (13%) Europe: 420 (33%) MENA: 492 (39%) Americas: 107 (8%) Sub-Saharan Africa: 81 (7%)
49
` Contents
Annual Review
1
Annual Report
51
Financial report .......................................................................... 52 Consultancy: Property report ..................................................... 54 Consultancy: Major Programmes and Infrastructure report ........ 56 Consultancy: International report ............................................... 58 Construction report ................................................................... 60 Investment report ...................................................................... 62 Health and Safety report ............................................................ 64 HR report .................................................................................. 66 Sustainability report ................................................................... 68 Annual Accounts
71
51
Mace
Financial report David Vaughan Group Finance Director
2013 has been another year of strong performance, reflecting our continuing achievements as we deliver our strategy for 2020. Turnover was up 8% to £1.18bn, and our profit before tax increased by 14% to £32m. Cash balances were £142m at the year end, with net assets of £25m. These results reflect both the strength of our long-term client relationships, where we continue to win repeat business, and our success in winning new work. They are underpinned by solid segmental performances, with consultancy contributing £277m (23%) of turnover and the construction division contributing £904m (77%) of turnover. Our new infrastructure and major programmes division had a strong first year, contributing £31m of turnover. The year saw an increased focus on cash collection, mainly through working with our clients to understand their workflows
Total Group turnover at end of 2013
£1.18bn
and processes. This enabled us to achieve approvals on projects
Group turnover
and the pooling of cash resources. The global treasury function
£1.18bn
2012
£1.09bn
2011 2010
8%
Secured versus target turnover
2014
52
75%
£28m
£1.44bn £1.33bn
correct regions.
foreign exchange, working with our international hubs to ensure the
£19m
needs of the business are satisfied, the exposure of the business is
£15m
limited, while expansion in emerging markets is maintained.
14%
+
With growth across all of our strategic international hubs of London, New York, Hong Kong, Dubai/Doha and Johannesburg, we also took further steps to understand and better manage the risks posed by our overseas assignments. These risks include changes in national economic conditions, exchange rate fluctuations, local taxes and trading restrictions, employment issues, security and political instability, and the threat of
2013
2011
ensure cash is held in the most appropriate currencies in the
In the coming year, greater focus will be placed on limiting risk from
£21m
Group pretax profit increase on 2012
2012
is working to reduce the risk of foreign exchange exposure and
£23m
Cash balances £1.56bn
55%
2012
2008
£617m
+ 2015
£32m
2009
£726m
7%
2013
2010
£851m
Group turnover increase on 2012
2016
We also focused on improving cash management processes
2011
£928m
2008
invest, in a timely manner.
Group pretax profit
2013
2009
quicker, which, in turn meant we could both pay our suppliers and
£142m £103m £116m
competition that is an inevitable result of working in a dynamic global marketplace.
Annual Report
The Shard and The Place, London, UK. Image courtesy of LBQ Ltd
We continued to invest in and develop our systems and processes to provide efficient, transparent and compliant support for our people and projects. Milestones in 2013 included a suite of enhancements to our recently introduced expenses system, and we commenced implementation of a new online timesheet system due for completion in 2014. Future investment will include developing our pipeline planning and reporting tools and designing a five-year Agresso implementation roadmap. Looking forward, our pipeline remains healthy. Our secured order book was ÂŁ2bn at the end of 2013, and 75% of our turnover target for 2014 was secured by the year end. In addition, we are pleased that secured workloads for the next two years are already putting us in a strong position for the next stage of our journey to 2020.
53
Mace
Consultancy: Property report Mark Holmes COO for Consultancy
Our consultancy division made another strong contribution to Mace’s growth in 2013, with revenues of £277m and profits of £24m. There was a continued growth in our key existing markets, as well as wins in targeted new sectors – demonstrating how the clarity of our vision and our methodical focus is enabling us to continue to deliver our corporate strategy for 2020. 2013 was also interesting in that we continued to see clients wanting an integrated service from Mace, one that combined the strengths of our consultancy and construction businesses. Clients that successfully used this model included Invesco, Barclays, Santander and Nationwide Bank.
Global real estate In 2013, our emphasis on developing long-term relationships Headcount (2011–2013) 2013
1,323
2012
1,260
2011
5%
+
1,420
in the global real estate sector was particularly successful. We secured new frameworks with BP, GSK, Halliburton, Exxon Mobil and Citibank, as well as extended relationships with clients such as Jaguar Land Rover, NSN, Metrobank, HSBC, Invesco and Barclays. We were also appointed to project and cost manage Microsoft’s new 400,000 square metre headquarters building in Dublin.
UK Turnover (2011–2013) 2013 2012 2011
£175m £160m
11%
+
£145m
Securing frameworks with BP, Halliburton and Exxon Mobil will enable us to take our first steps in the oil and gas markets, and our investment in the pharmaceutical sector continues to pay off with our relationship with GSK now extending into the US and new client successes with Procter & Gamble in Nigeria, Ferring
Percentage of Group headcount and turnover
Pharmaceuticals, Novartis and Astra Zeneca. The UK public sector is an area where we have traditionally been
Headcount: 35%
strong. All of our existing framework contracts were renewed and we consolidated our position further with new framework wins with the Home Office and The Insolvency Service – our first central
Turnover: 15%
government contracts – and a number of local authorities. We secured positions on two frameworks for the UK Department for Education – a new appointment to the Priority Schools Building Programme and reappointment to the Free Schools framework. We also project managed the delivery of 100 schools across the country.
54
Annual Report
SABMiller, Woking, UK
Our work in the higher education sector was strengthened despite the impact of increased student fees. We secured further work with King’s College London and University College London. The retail sector also had a successful year. We secured contracts with Belstaff, Hackett, Asda, Sainsbury’s and the Co-operative Group in the UK, as well as Walgreens and H&M in North America. We also secured new work with Capital & Counties Properties Plc on its Earls Court Development, and for Grosvenor in Central London. In the Midlands and South West of England, we completed the biggest data centre in the region for Santander, celebrating 10 years of continuous work in the region. We also strengthened our position in the higher education sector with new appointments with the University of Nottingham, De Montfort University and a continuing relationship with the University of West England. Meanwhile in the North of England, we continued work on ITV’s new studios for Coronation Street in Manchester. We won more work with Manchester City Council, as project manager of its new town hall complex and as Landlord’s Representative for the £30m Etihad Stadium expansion project. For Siemens we are managing one of its most significant investments in Hull – the delivery of a new facility for wind turbines. Macro, our facilities management business, welcomed a new Managing Director for the US and Europe, Debra Ward. It won two of its largest ever contracts, with technology firms Colt – supporting 72 buildings across 12 countries – and Siemens, to support its entire property portfolio across the UK and Ireland for the next three years. Our cost consultancy business has continued to grow on the back of our project and programme business and the continued development of Macro’s client base of data centre operators and UK-based developers. Overseas, we broadened our cost consultancy service to include the MENA and Americas regions.
55
Mace
Consultancy: Major Programmes and Infrastructure report Jason Millett COO for Major Programmes & Infrastructure 2013 was the first full year of operation for the Major Programmes and Infrastructure division. By bringing together expertise in these markets from across Mace, as well as from outside, we have established a solid foundation for future growth and gained some important early wins. Major Programmes and Infrastructure was established to address two key objectives. The first was to help Mace achieve its goal to be a leading programme manager by 2020, making the most of our proven expertise in running major programmes such as London 2012 Olympic and Paralympic Games, the Ashghal Public Works Authority Building Affairs Programme in Qatar in joint venture with EC Harris and the Gutenborg residential programme in St Petersburg, Russia. We have created a compelling service offer, enabling us to target major programme management opportunities around our five global hubs, or in areas where we have established client relationships. We have appointed Richard Palczynski as Head of Programme Management to lead our efforts in this area. As well as improving how we work, our continuing success in programme management will help promote the expertise of the UK construction sector abroad, supporting the aims of the UK government’s Construction 2025 strategy. Our long-running involvement with Queen Elizabeth Olympic Park continues, as we now work to transform the Park into a stunning community facility. Working on behalf of the London Legacy Development Corporation, we have completed landscaping and either dismantled the venues or converted them for post-Games use. The final stage of this transformation – conversion of the main Olympic Stadium – is now underway. The second key objective was to address the current market opportunity, described in the UK Government’s 2012 National Infrastructure report, for major infrastructure investment to position us for new growth in the sector, where we secured new commissions.
56
Annual Report
Queen Elizabeth Olympic Park, London, UK
In utilities, well-established links with the major water companies enabled us to secure work in this mature market, winning a place on Severn Trent Water’s £6bn framework to provide cost and commercial consultancy services for the next ten years, and United Utilities’ programme and project management consultancy framework. We now also have a growing presence in the nuclear energy sector. During 2013 Mace continued work on EDF’s Hinkley Point C new-build project and we are now well positioned as this major construction project gains momentum. We are also providing programme management and procurement advice to support Sellafield’s nuclear decommissioning activities. And we won our first work with Horizon, the wholly owned subsidiary of Hitachi, to review the civil engineering and workforce planning programmes for the new Wylfa and Oldbury reactors. In 2013, our transport team gained its first major wins with the Highways Agency, with the appointment as programme integrator for the A14 Cambridge to Huntingdon improvement scheme and consultancy for the accelerated delivery programme for managed motorways. The rail business also reported some major wins, with London Underground’s station improvement programme as part of the joint delivery partner consortium (with EC Harris, CH2M Hill and CPC) and with Network Rail for its major electrification scheme. In addition, the Birmingham New Street redevelopment – one of our largest transport projects – was in full swing during 2013. Working with our construction delivery colleagues we passed several major milestones, including the opening of the new concourse. We are making good progress on the new John Lewis store at the south of the station which will create up to a thousand jobs for local people when it opens in 2014.
57
Mace
Consultancy: International report Marcus Burley COO for International
Despite continuing uncertainty in global markets, our international business has not only demonstrated strong growth and delivered our most successful results to date; it has done so by a considerable margin. In addition to revenue and profitability growth, we have seen our global employee numbers increase to just under 1,300 people, a 29% uplift on 2012. 2013 saw significant efforts to align with the company’s strategy of shifting from a UK company working internationally, to a global company headquartered in the UK. The primary driver of this strategy is the establishment of five international hubs, set up at the beginning of 2013, to provide better global coverage and help ensure greater consistency of service worldwide. We remain focussed on securing repeat business with developers Headcount (2011–2013) 2013
1,297
2012 2011
1,002
29%
+
720
and the management of major programmes, such that we can maintain long-term business continuity and stability. Our continuing role as delivery partner on the major Gutenborg residential programme in St Petersburg, Russia, for SPb Renovation is a good example of this. The scheme advanced well during 2013 and will now shift emphasis towards construction during 2014.
Turnover (2011–2013) 2013
£102m
2012
£103m
2011
£102m
1%
-
While as a whole Western Europe had a slow year with only limited signs of economic recovery, Turkey has been the highpoint. A 50% increase in our activities in Turkey and our presence in three major Turkish cities was very encouraging, as was our commission for three major five-star hospitality projects. We anticipate further growth in the region as economic recovery improves.
Percentage of Group headcount and turnover
Eastern Europe remained a strong market for Mace in 2013, delivering further major schemes in Azerbaijan and increasing our
Headcount: 34%
activities in Georgia and Belarus. Serbia, Montenegro and Croatia, whilst slower than recent past, still maintained an active workload, proving the sustainability of this business for the group.
Turnover: 8%
Our business in North America continued to grow at a rapid pace. 2013 saw an increased order book for assignments in 20 states and more than 35 cities across the US. Income and headcount more than doubled from 2012 to 2013.
58
Annual Report
The Hong Kong Jockey Club, Hong Kong, SAR China.
A signature win in this region was a commission to act as owner’s
Tower in Saudi Arabia, in joint venture with EC Harris, during
representative for the relocation of the Port Authority of New York
the period, which is planned to be the world’s tallest building
and New Jersey to its new corporate headquarters at the Four
once complete.
World Trade Centre – one of the largest fit-out assignments in New York City. We were also appointed to a combined QS and PM framework for BP Americas, and by GSK to programme manage its R&D estate both in the USA and UK. Other key wins included a retail branch renovation and expansion program for TD Bank; a retail programme for Walgreens; process support for Exxon Mobil’s major office expansion in Houston; commissions for Starwood Hotels to manage its New York City office consolidation and deliver a new Wichita call centre; and cost consultancy for several major campus expansions for Wells Fargo. Sub-Saharan Africa has also seen a good level of growth. As well as the completion of the award-winning No.1 Silo development of the V&A Waterfront in Cape Town, activities now extend into Ghana, Angola, Nigeria, Botswana, Tanzania and Zimbabwe. This region offers the greatest opportunity for sustainable business growth through 2014 and beyond.
Persistence in the Indian market delivered results in 2013, with the successful completion of our commission on Mumbai International Airport and further significant wins in both Mumbai and Delhi. Staff numbers increased from 15 to 40 during the period and are expected to double by the end of 2014. While the amended Foreign and Commonwealth Office (FCO) framework delivered fewer contracting opportunities, we continue to secure global consultancy roles for the FCO and it is hoped that our long-term relationship can continue over the next period and beyond. We expect 2014 to provide opportunities for significant further business growth, fuelled by an increasing presence in SubSaharan Africa and Eastern Europe and a wider improvement in global markets.
Our emphasis on Hong Kong, Macau and Australia remains, as does our desire to service global real estate clients over a wider Asian footprint. We consolidated our resources in these regions during 2013 and won significant commissions with MGM Resorts International in Macau and The Hong Kong Jockey Club. There has been also growth in Australia through commissions with Singapore Airlines, the New South Wales Government’s Health Infrastructure team and the Department of Foreign Affairs and Trade. We won our first major programme in Australia, with our selection in 2013 as project managers for the country’s military base estates programme, in joint venture with Aurecon. In the Middle East, our Qatar presence has continued to expand through 2013, with additional commissions on New Doha International Airport, Doha Festival City and growth of our Ashghal commission. Bidding activities within the UAE have greatly increased, thanks to improving market conditions, and 2014 is anticipated to deliver significant growth. Mace secured Kingdom
59
Mace
Construction report Gareth Lewis COO for Construction
Our construction business recorded excellent growth in 2013. Turnover, profit and headcount were all up on 2012, while several of our major projects completed in 2013 and many other significant projects hit their scheduled milestones. We won many major commissions, much of this repeat-order business with existing clients. Notable assignments included the appointment as main contractor for phase one of the £385m multi-use Nova, Victoria scheme for Land Securities and for the £129m South Bank Tower for CIT Group, both of which followed comprehensive preconstruction involvement. We secured our second commission with The Crown Estate’s W5 development during the construction of W4, its sister project, which is still in progress. And we continued to win work at Heathrow Airport, building on a strong client relationship that dates back more than Headcount (2011–2013) 2013
983
2012
857
2011
15%
+
891
20 years. Other appointments include the construction management for preliminary works at Battersea, London, for the Battersea Power Station Development Company – a project worth £80m – as well as Stanhope’s £123m One Angel Court, a new £46m data centre for Digital Realty Trust and the £109m Bracknell Northern Retail
Turnover (2011–2013) 2013 2012 2011
£904m £829m
9%
+
£681m
Quarter for Legal & General. The residential team continued to strengthen. This business has doubled its turnover every year since Mace entered this market. Wins in 2013 included the £68m, 35-storey Vauxhall Sky Gardens and the £96m Newington Butts development in conjunction with
Percentage of Group headcount and turnover
our investment business for the Greater London Authority. Several of our biggest residential projects moved towards
Headcount: 26%
completion, including the £93m 3 Merchant Square development for European Land, the £67m Parabola for Chelsfield Plc in west London and the £80m Three Quays luxury residential development
Turnover: 77%
for Cheval. Safe and on-schedule delivery was the hallmark of 2013. The Horizon Data Centre was completed for Lloyds Banking Group. One of the largest data centres in the country, Project Horizon was a model construction delivery job, winning the British Council’s Sword of Honour and Globe of Honour awards for its outstanding safety record.
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Annual Report
Hollandgreen residential development, London, UK
In Oxford, the Kennedy Institute and Nuffield Department of Medicine buildings were handed over on time, marking another successful project in the on-going relationship between Mace and the University of Oxford. We also completed work on The Place, the striking, £146m, 18-storey office development opposite The Shard at London Bridge for Sellar Property Group. Meanwhile, work continued on other major projects, including at the British Museum’s new £155m World Conservation and Exhibitions Centre – where the Sainsbury Exhibitions Gallery, a major milestone, was completed. We continued to strengthen our senior team in 2013, with four new appointments: Ged Simmonds is the new Business Unit Director for the commercial offices team; Trevor Bacon has joined as Business Unit Director for Como; Phil Sedge was appointed Façades Operations Director to help build our capability in what is a tremendously technical environment; and we have made several appointments to strengthen our technical services team enhancing our design management and engineering, planning, quality assurance and sustainability. Our in-house MEP and logistics teams have enabled further collaboration. We are using these teams on more of our own projects than ever before, enabling us to reduce the overall cost of delivery and drive innovation, quality and safety through all aspects of a project. Looking forward, our turnover target for construction was 80% secured at year end. We will continue our focus on delivering major projects successfully for our key clients, with commercial and residential continuing to be a key sector. We will also explore new markets, including international contracting, infrastructure construction and the growing waste-to-energy sector, where our construction expertise and focus on delivery will help us make a real difference to our clients.
61
Mace
Investment report David Grover COO for Investment
2013 has been a strategically important year for the investment business. As part of a consortium led by Robson Asset Management (RAM), we have successfully completed, opened and re-financed the Great Northern Hotel at Kings Cross, London, for Aries GNH. It demonstrates Mace’s ability to take early risk and then deliver a quality product that is both exceptional in its design and already as a consequence of that, fast becoming a recognised destination in its own right, underpinned with strong trading figures. We expect to fully exit this investment over the next 12 months. In the spring we completed the Assam Place project, a joint venture with Alternative Developments. The 334 room student accommodation project in Aldgate, London was successfully let to students for the 2013/14 academic year. In December 2013 we concluded a long lease deal with Hult Business School who are now fitting out their London headquarters in the building and who will also take full occupation of all the bedrooms during the summer of 2014. The project has recently been refinanced with RBS and is asset-managed by Mace. Our student scheme in Edinburgh of 320 units, Deaconess House, has also progressed well with completion expected on time by early summer 2014. This is a forward fund and sale to The University of Edinburgh, capitalising fully on our land acquisition and planning skills and the initial development vision we had for the site. The Greenwich Square project in joint venture with Hadley Property Group, comprises 645 new homes, has progressed exceptionally well both in construction terms and sales, which have exceed our business plan and we have now exchanged on c. £29m of private units, leaving just a handful of flats in our first three years of build remaining unsold. In 2014 we launch our maisonette and town house products and early demand for those is already strong. During 2014 we move to Phase Two, the fully consented 284 unit block which forms the final phase of the development and we expect that to respond well to a rising market in Greenwich.
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Annual Report
The Great Northern Hotel, London, UK
The success of this scheme with landowner the Greater London Authority then enabled a credible development partner offer to be made to deliver Newington Butts at Elephant & Castle, London on a similar basis, which was secured through intense competition in July 2013. This 45 storey tower of 457 units will become the first focused PRS development in London and will be the highest residential building south of the river. Works start on the site in spring 2014 in conjunction with our social landlord operating partner, Peabody Housing. The development partner role at Helenslea Avenue, Golders Green for Helenslea Development Limited has moved through a further successful planning application where we will be producing 25 high quality units for sale in 2016. This is now debt funded to enable a full start on site by summer 2014. In the wider market we have added depth to our supply through land options in Cambridge Heath Road in London which will become a residential site of c. 100,000 sq ft and a large site in central Glasgow which will, subject to planning, provide a mixed use development in excess of 500,000 sq ft. Planning success for both schemes is expected during 2014. Our pipeline of long term opportunity focussed on private residential, PRS, student and mixed-use development has substantially grown during the year, placing us in a strong position to capitalise on the demand led by London and key city markets over the next five years. We now control or partner projects in excess of ÂŁ600m GDV, which is a substantial increase year on year. In summary, our strategy is to invest and support the wider Group and utilise our own skills and services to support our wider ambitions outlined in our 2020 business plan.
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Mace
Health and Safety report Nigel Cole Health and Safety Director
Halfway through ‘Safety First. Second Nature’, our five-year strategy to embed the best health and safety practices throughout Mace, we can report another year of improvement. Even as the company has grown, with more projects and more people on site, accidents and incidents have been dramatically reduced. We restructured our health and safety team in 2013, enabling our functional and operational safety operatives to work together more effectively, making our organisation more streamlined and providing a greater consistency of approach. We are also reviewing our responsibilities for our consultancy projects, to enable us to gather more complete data for the work we do as project, programme, cost and facilities managers. All of this is helping us drive a change of approach in safety. Increase in people working on Mace sites (2011–2013) 2013
10,303 8,765
2012 2011
18%
+
6,973
Rather than identifying potentially unsafe behaviours onsite, and correcting them, our aim is to prevent these unsafe behaviours occurring at all. Key performance indicators for the year included: •
Reduction in RIDDOR incidents on site 2013
21
2012
31
Reduction in lost time incidents on site 2013
81
2012
123
Reduction in first aid incidents on site 2013 2012
179 329
32%
number of RIDDOR injuries on our projects – an achievement that was even more impressive given that we recorded a 18%
-
34%
Like for like, in 2013 there was a 32% reduction in the
increase in the number of people working on our projects during the year. •
Once again, there were no health and safety executive enforcement actions recorded this year (this included
-
prosecutions and prohibition and improvement notices for breaches of health and safety legislation). •
We continued to focus proactively on potential areas of risk. We issued 50 visual standards which identified potential
46%
areas of risk and raise awareness on the correct behaviours
-
to prevent accidents. 36 safety alerts helped drive lessons learned from safety issues, and 300 ‘first alerts’ did the same for significant near misses and incidents. •
We ran five supplier forums at director level in 2013, which helped us ensure the behaviours of our supply chain are in line with ‘Safety First. Second Nature.’
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Annual Report
5 Broadgate, London, UK
Cycle safety has been a major area of focus. In 2013, we launched
We also continue to improve our systems. We made over 30
a comprehensive initiative to improve cycle safety around our
improvements to YellowJacket, our online health and safety
construction sites. Aimed at all our construction projects and our
management tool, adding new features, more reports, more
supply chain in the UK, activities have ranged from ensuring cycle
powerful analysis and improving usability. In 2014, we will be
safety is included in all of our activities, through providing cycling
launching a YellowJacket smartphone application which will enable
proficiency training to all UK staff, and ensuring all our supply
instant data and analysis.
chain’s vehicles over 7.5t meet the Transport for London Freight Operator Recognition Scheme (FORS) bronze standard.
We will also be rolling out a new health and safety induction throughout Mace, so that every employee is well-versed in our
In addition, we have already started implementing the new
approach. And we will be reviewing and re-launching our Mace
Managing Work Related Road Risk (WRRR) national standards for
Behavioural Management programme – proof of our continuing
construction logistics. We expect to achieve full UK compliance by
commitment to the highest health and safety standards.
April 2014. Our projects continue to demonstrate our on-going commitment to delivering the highest safety standards. The Horizon Data Centre recorded two million hours without a reportable incident – a great achievement for such a technically-demanding and fast-moving project. It was deservedly awarded both the Sword of Honour and the Globe of Honour by the British Safety Council. Our construction public sector team achieved three years without a RIDDOR accident – an excellent achievement, putting them ahead of their ‘Safety First. Second Nature’ target. Other project highlights for 2013 include: •
At New Doha International Airport, we reached 12 million hours without a reportable accident. This is a new record for Mace, and is all the more impressive as it has been delivered across multiple Mace projects at the airport.
•
The British Museum World Conservation and Exhibitions Centre surpassed one million hours worked without a RIDDOR injury.
•
Eight of our major projects – including The Place, W4 Regent Street and the South Bank Tower, all in London, achieved more than half a million RIDDOR accident free hours.
•
Birmingham New Street received a five star rating in an external audit by the British Safety Council.
65
Mace
HR report Tracey Locke Group Human Resources Director
Growth was the key theme for Mace in 2013 with employee numbers rising by 14% to 3,806 across the globe by the end of the year. This is in line with our targets and by 2020 we aim to have 7,200 people working for Mace around the world. As a result, much of our activity in 2013 has concentrated on retaining and developing our people. We have created an executive Development Framework to support this, and we launched the first programme in the framework, ‘Developing Success’, in partnership with Imperial College London. Imperial College is one of the top five ranked universities in the country and are thought leaders in our industry. We recruited 60 new graduates in 2013, to a revitalised graduate development programme. The upgraded two-year graduate Total Group headcount at end of 2013*
Total of annual 2020 Strategy target
programme places more emphasis on developing the range and
4,138 107%
depth of individuals’ technical expertise, and has a crucial part to
Headcount by service (2013)
the scheme. They are currently spending the first year of the
play in the retention and development of our graduate-level intake. For the first time, we extended the graduate programme internationally, with three graduates from North America joining programme working on projects in the UK, and will be returning to
Construction: 983 (26%)
the US to complete their second year.
UK Consultancy: 1,323 (35%)
Our Construction Trainee Programme grew, with seven college
Global Consultancy: 1,297 (43%)
leavers joining us. This programme is proving to be both popular
Corporate Services: 203 (5%)
experience to support what they are learning in the classroom. We also ran our first Careers in Construction week, enabling 15
Headcount (2011–2013) 2013
3,806 3,327
2012 2011
and useful with individuals gaining essential early practical
to 17 year olds to experience the construction industry and learn
14%
+
3,173
about different careers at Mace. This event plays an important part in attracting a continuing pipeline of new talent to Mace and the construction industry in general. 21 school and college students took part, with the best-performing student of the week offered a three-day work placement.
2013 training and development spend £1.8m
2013
Percentage of offers accepted 2013
2012
£693k
2012
2011
£725k
2011
*Including consultants and temporary employees. Total direct employees were 3,806 at year end.
66
94% 91% 95%
Annual Report
Students at the Mace Careers in Construction Week
There were some positive results in our most recent annual employee survey. 84% of employees said they were proud to work for Mace. 82% believe Mace has a culture of delivering to a high standard; and 81% understand Mace’s vision, goals and strategy. These results are encouraging and provide important data to inform our human resource policies. Looking forward to 2014, our focus will remain on attracting, recruiting and retaining the best talent. We will continue to expand our graduate programme, recruiting 63 graduates and 22 one-year placements, as well as rolling it out to our hub in Johannesburg, covering Sub-Saharan Africa. We will build on the success of our Careers in Construction week, introducing ‘Insight Week’, which will give university students the opportunity to experience a week in the life of a Mace graduate. We will also launch the next phase of our Executive Development Framework, aimed at preparing middle and senior-level managers for the next step in their career. Diversity is integral to both business success and achieving our 2020 vision. Our focus in 2014 will be on gender and increasing female representation across the business. Key actions to deliver this will include identifying and supporting high performing women and positively influencing diversity in the construction industry.
67
Mace
Sustainability report Isabel McAllister Sustainability Director
Our activity in 2013 focused on building engagement around the systems and processes we put in place during the previous year to collect data and to deliver sustainability best practice on our projects. As a result, our sustainability efforts have started to gain real momentum, and we can see more awareness and enthusiasm amongst our people, partners and supply chain, as well as recognition from wider industry.
Internal operations Data collection is now robust thanks to previous investments in systems, giving us reliable data for energy and carbon, water, waste, materials certification and biodiversity. We trained more than 600 people in 2013 on sustainability best practice. Waste to landfill (per ÂŁ100k spend) 3.15t
2013 2012
3.3t
Water used on site 2013
A major milestone for 2013 was the launch of our Energy Hub, an
98,107m3
2012
innovative energy forecasting and purchasing strategy, which uses 181,000m3
100% renewable energy from a single preferred supplier, to supply our corporate offices and construction projects. This resulted in a
Biodiversity increase in area on site 19.3%
2013 2012
4.4%
68% reduction in carbon emissions from sites where we pay the
Carbon emissions 2013 2012
energy bills and a ÂŁ300k saving over the course of the year.
2,857t 8,700t
UK construction best practice We have measured notable improvements in sustainability
Responsible sourcing
98%
of timber from FSC approved sources, with a further 1.4% PEFC sources.
performance across all our UK construction projects, the result
99.5% of in situ concrete is BES6001 certified.
7.6% 10.3%
of structural steel was BES6001 certified.
of precast concrete was BES6001 certified.
99.9% 79.9%
of plasterboard was BES6001 certified.
68
of reinforced bars were BES6001 or CARES Sustainability certified.
both of training and engagement activities and of changes in procurement and site practices. There have been particular successes in Considerate Contractor Scheme (CCS) scores, in sourcing responsible materials and in biodiversity.
Annual Report
Volunteering with the London Wildlife Trust at Old Ford Island, UK
v
Project highlights for 2013 include: •
The Horizon Data Centre achieved Construction Stage BREEAM Outstanding – the first data centre in the UK to do so – and was also awarded the British Safety Council Globe of Honour and Sword of Honour for environmental and health and safety performance.
•
5 Broadgate, London, put in place an innovative sustainable procurement strategy, achieving 100% responsible sourcing for 14,000 cubic metres of core construction materials.
•
240 Blackfriars achieved full FSC® (Forest Stewardship Council) certification (TT-PRO- 004012:2014) for all permanently incorporated wood materials and products used. Almost 1,000m3 of timber was used, all verified as being responsibly sourced in accordance with FSC standards, 98.6% of which had a complete chain of custody to site.
Our socio-economic team delivered a range of services to support those looking for employment and training opportunities within the construction industry. We finished top of the Greater London Authority’s Employability Performance Ratings, which benchmark the achievements of 123 skills and employment providers in London. Mace is one of only two delivery partners who achieved a four star rating. In total, Mace provided 898 people with careers advice and support towards developing their employment choices – almost double our planned level. Across all our projects, partnership work with our supply chain and other stakeholders resulted in 464 local people getting into work. We ran a new programme in 2013 to encourage school children to consider careers in the construction industry. This included curriculum development input, careers talks and career carousels, and site visits.
Industry-leading client services
Volunteering continued to be popular. 559 Mace employees
We continue to extend our sustainability consultancy offer, working
volunteered with a range of charitable partners. In 2013 volunteers
with a wider range of clients – including GSK, Sainsbury’s, Siemens
also provided mentoring and supported various Mace Foundation
and HSBC – to help create efficiency in their portfolios, reduce
partner events such as Time To Shine‘s National Paralympic
their carbon footprint and become sustainability leaders in their
Day event for young people at Queen Eilzabeth Olympic Park.
respective industries.
Meanwhile in St Petersburg, Russia, Mace’s Gutenborg project
Community programmes
team raised funds to improve the quality of life for children in orphanages in the city.
The Mace Foundation celebrated its first year of operation in 2013. Established to enhance the support that Mace offers to the communities in which it works, it contributed more than £330,000 to charitable activities and worthy causes over the year. It also launched strategic partnerships with six charitable organisations: Coram, LandAid, The Prince’s Trust, RedR UK, Teenage Cancer Trust and WheelPower.
69
` Contents
Annual Review
1
Annual Report
51
Annual Accounts
71
Directors’ report......................................................................... 72 Independent auditor’s report ...................................................... 74 Consolidated profit and loss account ......................................... 75 Consolidated balance sheet ...................................................... 76 Company balance sheet ............................................................ 77 Notes to the accounts ............................................................... 78
71
Mace Limited
Directors’ report
The directors have pleasure in presenting their report and the financial statements of the group for the year ended 31 December 2013.
Results and dividends
Employees Arrangements exist to keep all employees informed on matters of concern to them and information on group performance and prospects is disseminated widely.
The consolidated profit for the year, after taxation, amounted to £23.5m (2012: £18.5m). The directors have paid dividends of £16.4m (2012: £16.5m). No further dividend is proposed.
Employees are encouraged to be concerned with the performance and efficiency of the group and various profit sharing and bonus schemes operate to emphasise and reinforce this.
Going concern
Directors’ indemnity insurance
After making appropriate enquiries, the directors have a reasonable expectation that the group and the company have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the group’s financial statements.
The company provides a directors’ and officers’ insurance policy.
Financial risk management objectives and policies
Directors’ responsibilities The directors are responsible for preparing the annual financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
The board considers the group’s key elements of financial risk to be interest rate risk and credit risk. The board has reviewed and agreed the policies in these areas, and are satisfied with the controls in place.
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that year.
Directors
In preparing those financial statements, the directors are required to select suitable accounting policies and then apply them on a consistent basis, making judgements and estimates that are prudent and reasonable and state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. The directors must also prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors who held office during the year were: Mark Castle Amy Chapman David Grover Mark Holmes Katharine Knight Gareth Lewis Jason Millett Robert Owen
Lee Penlington Stephen Pycroft Mark Reynolds Matthew Turner David Vaughan David Williams Ian Wylie (non-executive)
Matthew Turner resigned from the board on 3 March 2014.
Branches The company has branches registered in the Republic of Ireland and Moscow in the Russian Federation.
Disabled employees The group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the group’s policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.
72
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the group and the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The directors are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Annual Accounts
Insofar as the directors are aware: • there is no relevant audit information of which the company’s auditor is unaware; and • t he directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s.418 of the Companies Act 2006.
Auditor Chantrey Vellacott DFK LLP will be reappointed as auditor for the ensuing year in accordance with Chapter 2 of Part 16 of the Companies Act 2006. Approved by the board and signed on its behalf by
Eloise Mangan Company Secretary 30 April 2014
73
Mace Limited
Independent auditor’s report to the shareholders of Mace Limited We have audited the financial statements of Mace Limited for the year ended 31 December 2013 which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Total Recognised Gains and Losses, the Consolidated and Company Balance Sheets and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all financial and non-financial information in the report and financial statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
74
Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the group’s and the parent company’s affairs as at 31 December 2013 and of the group’s profit for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent company financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.
PAUL FENNER (Senior Statutory Auditor) for and on behalf of CHANTREY VELLACOTT DFK LLP Chartered Accountants and Statutory Auditor London 30 April 2014
Annual Accounts
Consolidated profit and loss account
Notes
Turnover: Group and share of joint ventures Less: Share of joint ventures’ turnover Group turnover Cost of sales
2
Gross profit Administrative expenses
Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
1,183,404 (2,256)
1,107,531 (15,316)
1,181,148 (1,043,580)
1,092,215 (969,870)
137,568 (107,085)
122,345 (94,425)
Operating profit
4
30,483
27,920
Joint ventures and associates Share of operating loss
5
590
(1,271)
Profit on disposal of development asset
8
1,000
-
Profit on ordinary activities before interest Net interest receivable
9
32,073 277
26,649 1,660
Profit on ordinary activities before taxation Tax on profit on ordinary activities
10
32,350 (8,550)
28,309 (9,595)
Profit on ordinary activities after taxation Minority interest
23,800 (287)
18,714 (205)
Profit for the year
23,513
18,509
Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
Consolidated Statement of Total Recognised Gains and Losses Year ended 31 December 2013
Retained profit for the year Exchange differences on opening reserves Exchange differences on intercompany loans Exchange differences on current year profit
23,513 (662) (888) 1,550
18,509 396 254 (1,341)
Total recognised gains and losses relating to the year
23,513
17,818
None of the group’s activities was acquired or discontinued during the above two financial years. There is no difference between the results reported above and their historical cost equivalents.
The notes on pages 78 to 91 form part of the financial statements.
75
Mace Limited
Consolidated balance sheet
Notes
At 31 December 2013 ÂŁ000s
At 31 December 2012 ÂŁ000s
12 13
4,325 19,065
3,073 14,765
1,605 (1,523)
7,514 (3,180)
82
4,334
1,547 1,629 25,019
(472) 3,862 21,700
5,325 236,715 142,030
11,759 233,006 102,513
384,070
347,278
(369,732)
(326,733)
Net current assets
14,338
20,545
Total assets less current liabilities
39,357
42,245
(13,971)
(22,377)
25,386
19,868
19 20 21 21 21
979 17 60 65 24,565
979 17 60 65 19,096
22
25,686 (300)
20,217 (349)
25,386
19,868
Fixed assets Intangible assets Tangible assets Investments Share of joint venture and associates gross assets Less share of joint venture and associates gross liabilities Investors share of net assets Other investments Total Investments
14
Current assets Work-in-progress Debtors Cash at bank and in hand
15 16
Current liabilities Creditors: amounts falling due within one year
17
Long term liabilities Creditors: amounts falling due after one year
18
Net assets Capital and reserves Called up share capital Share premium account Capital redemption reserve Other reserves Profit and loss account Equity shareholders’ funds Minority interest
The financial statements were approved by the Board of Directors and authorised for issue on 30 April 2014 and were signed on its behalf by:
Mark Reynolds
David Vaughan
Chief Executive Officer
Group Finance Director
Company registration number: 2410626 The notes on pages 78 to 91 form part of the financial statements.
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Annual Accounts
Company balance sheet
Notes
At 31 December 2013 ÂŁ000s
At 31 December 2012 ÂŁ000s
13 14
14,913 8,659
10,792 7,088
23,572
17,880
5,080 195,386 76,431
4,845 198,015 52,462
276,897
255,322
(271,778)
(237,465)
5,119
17,857
28,691
35,737
(13,943)
(22,348)
14,748
13,389
Fixed assets Tangible assets Investments
Current assets Work-in-progress Debtors Cash at bank and in hand
15 16
Current liabilities Creditors: amounts falling due within one year
17
Net current assets Total assets less current liabilities Long term liabilities Creditors: amounts falling due after one year
18
Net assets Capital and reserves Called up share capital Share premium account Capital redemption reserve Profit and loss account
19 20 21 21
979 17 60 13,692
979 17 60 12,333
Equity shareholders’ funds
22
14,748
13,389
The financial statements were approved by the Board of Directors and authorised for issue on 30 April 2014 and were signed on its behalf by:
Mark Reynolds
David Vaughan
Chief Executive Officer
Group Finance Director
Company registration number: 2410626
The notes on pages 78 to 91 form part of the financial statements.
77
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 1
Accounting Policies
The group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December each year. The results of subsidiaries acquired or sold are consolidated for the period from or to the date on which control is passed.
The company has guaranteed the liabilities of certain subsidiaries included within Note 25. Where the company has guaranteed the liabilities subsidiaries and they are included within the consolidated financial statements, the subsidiaries are exempt from the requirements of audit under section 479A of the Companies Act 2006.
1.1 Turnover
Turnover reflects both long-term contract activity and invoiced consultancy work. In respect of long-term contracts and contracts for ongoing services, turnover represents the value of work done in the year, excluding VAT, and includes amounts not invoiced. Income arising from consultancy services is recognised when a right to consideration has been obtained through performance.
1.2
Basis of preparation
The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards and legislation, except as disclosed in note 5.
1.3
Basis of consolidation
The group reports its interests in subsidiaries using the acquisition method of consolidation and combines all of the assets, liabilities, income and expenditure within the equivalent items in the consolidated financial statements on a line-by-line basis.
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The minority interests in the net assets of the consolidated subsidiaries are identified separately from the group’s equity and consist of the amount of those interests at the date of the original business combination plus their share of changes since that date. A joint venture is a contractual arrangement whereby the group and other parties undertake an economic activity that is subject to joint control whereby the strategic and operating policy decisions require the unanimous consent of the parties sharing control. The arrangements the group has entered into involve the establishment of a separate entity in which each party has an interest. The group reports its interest using the gross equity method. To certain joint ventures, the group charges staff and overhead costs excluding any profit element for its staff deployed. In these instances, the directors believe that the group’s share of joint venture profits earned from its role should be included in group turnover and operating profit to reflect the true substance of the group’s operational and contractual arrangements with the respective joint ventures. Investments in associated undertakings are carried in the consolidated balance sheet at the group’s share of their net assets at the date of acquisition and their post-acquisition retained profits or losses together with any goodwill arising on the acquisition, net of amortisation. The group’s share of the results is included within the consolidated profit and loss account.
1.4 Depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset over its expected useful life as follows: % per annum Method Freehold property
5 Straight line
Computer equipment
33 Straight line
Plant, motor vehicles and equipment
10–20 Straight line
Leasehold improvements are depreciated over the life of the lease.
1.5 Impairment
Impairment reviews are carried out when necessary in respect of all tangible and intangible fixed assets and investments and provisions made as appropriate.
1.6 Goodwill
Goodwill arising on consolidation represents the excess of the fair value of the consideration given over the fair values of the identifiable net assets acquired.
The cost of acquisitions comprises the fair value of the initial consideration, deferred consideration paid or accrued and professional and other costs directly associated with the acquisition.
Amortisation of goodwill occurs over the period in which the investment will generate value. This has been estimated by the directors as 10 years of the useful economic life over which the group expects to derive economic benefits from the assets
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 1.7
Operating lease agreements
1.11 Foreign currencies
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.
(i) Company
Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rates of exchange ruling at the date of transaction. All differences are taken to the profit and loss account. Differences arising on transactions of a longer term financing nature are recognised in the statement of total recognised gains and losses.
(ii) Group
The financial statements of overseas subsidiary undertakings are translated at the rates of exchange ruling at the balance sheet date. The exchange differences arising on the re-translation of opening net assets are recognised in the statement of total recognised gains and losses.
1.8 Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date.
Deferred tax assets or liabilities are recognised, on a full provision basis, for all material timing differences between the recognition of gains and losses in the financial statements and their recognition in the tax computations.
1.9
Pension schemes
The company participates in a group defined contribution pension scheme for staff, the assets of which are held separately from those of the company in an independently administered fund. Contributions are charged to the profit and loss account as they become payable.
1.12 Cash flow statement
1.10 Short-term work-in-progress and long term contracts
Short-term work-in-progress is valued at the lower of cost and net realisable value. Cost includes staff costs plus attributable overhead. Net realisable value is based upon the directors’ estimate of future revenues to be generated. Amounts recoverable on long term contracts and deferred income are stated at cost plus attributable profits less foreseeable losses and progress payments received and receivable and are disclosed under debtors. Cost comprises direct labour and attributable overhead. Attributable profit is that proportion of the total profit currently estimated to arise over the duration of a contract which may reasonably be attributed to the work carried out at the balance sheet date.
Foreseeable losses are all losses currently expected to arise on contracts in progress, irrespective of their stage of completion at the balance sheet date.
Progress payments received in excess of the value of work executed on individual contracts are included in creditors under the heading payments received on account.
The company is a subsidiary undertaking of Mace Group Limited, a company registered in England and Wales. Mace Group Limited prepares consolidated accounts which include a consolidated cash flow statement dealing with the cash flows of the group. Mace Limited is therefore not required to prepare a cash flow statement for inclusion in its own accounts.
1.13 Financial instruments
Financial assets such as cash and debtors are measured at the present value of the amounts receivable, less an allowance for the expected level of doubtful receivables. Financial liabilities such as trade creditors, loans and finance leases are measured at the present value of the obligation. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. The group uses forward currency contracts to hedge euros on certain purchases from overseas suppliers to mitigate currency risk.
1.14 Investments
Investments are included at cost less amounts written off. The carrying value is considered annually by the directors in comparison against the potential net realisable value.
1.15 Related party transactions
The company is a wholly owned subsidiary of Mace Group Limited, the consolidated financial statements of which are publicly available. Accordingly, the company has taken advantage of the exemption in FRS 8 from disclosing transactions with wholly owned members of the Mace Group Limited group of companies.
79
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 2. Group turnover Turnover represents the value of services provided excluding VAT. Turnover analysed by class and geographical market is as follows: Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
881,817 21,927 664
817,705 11,057 21,794
904,408
850,556
98,636 76,181 101,923
110,167 49,941 81,551
276,740
241,659
Total Group turnover
1,181,148
1,092,215
Geographical market United Kingdom Europe Asia Middle East and Africa Rest of the world
1,049,805 40,299 16,889 59,223 14,932
981,038 20,613 19,578 50,844 20,142
Total Group turnover
1,181,148
1,092,215
Class of business Construction services Fixed price Fee based International fixed price
Consultancy services Project management and cost consultancy Facilities management International project and facilities management
3. Segmental analysis The board considers that the group’s construction and consultancy services constitute one class of business for the purposes of segmental reporting. The results and the net assets of the group are analysed geographically as follows: UK £000s
Rest of the World £000s
Total £000s
Year ended 31 December 2013: Revenue by origin Segment profit before tax Segment net assets
1,049,805 27,627 9,058
131,343 4,723 16,328
1,181,148 32,350 25,386
Year ended 31 December 2012: Revenue by origin Segment profit before tax Segment net assets
981,038 27,707 12,123
111,177 602 7,745
1,092,215 28,309 19,868
80
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 4. Operating profit Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
The operating profit is stated after charging: Foreign exchange gains Amortisation of goodwill Depreciation of tangible fixed assets Loss on disposal of fixed assets
421 565 3,692 18
359 733 3,126 283
Operating lease rentals: Motor vehicles Land and buildings
411 3,135
377 3,377
53
45
107 61 4 21
110 149 34
Services provided by the Company’s auditor and its associates During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditors and its associates: Fees payable to the Company’s auditor for the audit of the parent company and consolidated accounts Fees payable to the Company’s auditor and its associates for other services: The audit of the Company’s subsidiaries pursuant to legislation: UK Overseas Other services pursuant to legislation Tax services
5. Share of joint venture and associates operating profit/(loss) Group turnover and operating profit have been adjusted to include profits earned from the company’s role in certain joint ventures. This profit represents fees earned by Mace group staff deployed on projects for whom only cost and overhead is charged by Mace to joint ventures under the contractual agreements. The directors believe the inclusion of these amounts in the group’s turnover and operating profit reflects the true substance of the group’s operational and contractual arrangements with the Joint Ventures as disclosed in the group’s accounting policies. If this true and fair override had not been applied, the following would have been disclosed as share of joint venture operating profits/ (losses): Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
Share of joint venture and associates operating profit/(loss) as reported Add amounts attributed to Mace group turnover
590 1,521
(1,271) 9,026
Share of joint venture and associates operating profit if the true and fair override had not been applied
2,111
7,755
81
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 6. Directors’ emoluments
Remuneration for management services (including benefits) Pension contributions
Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
3,400 367
2,507 240
3,767
2,747
Pension contributions were made in respect of 8 directors (2012: 9).
Directors’ emoluments include the following amounts in respect of the highest paid director of Mace Limited:
Remuneration for management services (including benefits) Pension contributions
Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
666 90
664 90
756
754
Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
229,174 18,880 13,075
194,672 20,861 13,030
261,129
228,563
401 3,182
349 2,884
3,583
3,233
3,806
3,327
7. Staff costs and numbers
Staff costs were as follows: Aggregate gross wages and salaries Employer’s social security costs Other pension costs
Average monthly number of persons employed by the Group during the year: Administration Project staff
The total number of employees at the year end was:
8. Profit on disposal of development asset
Profit on disposal
82
Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
1,000
-
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 9. Interest Year Ended 31 December 2013 £000s
Bank and other interest receivable Other interest payable
Year Ended 31 December 2012 £000s
615 (338)
1,905 (245)
277
1,660
10. Tax on profit on ordinary activities Year Ended 31 December 2013 £000s
Year Ended 31 December 2012 £000s
(a) The tax charge for the year comprises: UK Corporation tax at 23.25% (2012:24.5%) Group relief payment Share of joint ventures and associates tax charge Adjustments in respect of previous years Overseas taxation
6,523 (567) 415 (409) 2,588
5,793 28 2,016 405 1,353
Total current tax (note 9(b))
8,550
9,595
32,350
28,309
7,520
6,936
688 (232) 154 1,286 (457) (409)
795 322 42 74 1,882 (10) (851) 405
8,550
9,595
(b) Factors affecting tax charge for year The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The differences are explained below: Profit on ordinary activities before tax Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.25% (2012: 24.5%) Effects of: Expenses not deductible for tax purposes Non-taxable profit on disposal of development asset Capital allowances for year less than qualifying depreciation Goodwill amortisation Other timing differences Utilisation of tax losses Other adjustments Different tax rates on overseas earnings Adjustments to tax charge in respect of previous years Current tax charge for year (note 9(a))
11. Profit for the year A separate profit and loss account for the company is not presented as permitted by Section 408 of the Companies Act 2006. The results after taxation of the company for the year ended 31 December 2013 amounted to a profit of £17.8m (2012 : profit of £18.2m).
83
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 12. Intangible fixed assets At 31 December 2013 ÂŁ000s
Group Goodwill Cost At 1 January 2013 Additions during the year
10,151 1,817
At 31 December 2013
11,968
Amortisation At 1 January 2013 Amortisation
7,078 565
At 31 December 2013
7,643
Net book value At 31 December 2013
4,325
At 31 December 2012
3,073
84
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 13. Tangible fixed assets – Group Freehold property £000s
Leasehold improvements £000s
Computer equipment £000s
Plant, motor vehicles & equipment £000s
Total £000s
Cost At 1 January 2013 Exchange differences Additions Disposals Transfers/reclassifications
1,882 (37) -
7,118 (30) 3,372 (520) -
12,047 (75) 4,471 (20) -
1,050 (26) 216 (13) (5)
22,097 (168) 8,059 (553) (5)
At 31 December 2013
1,845
9,940
16,423
1,222
29,430
Depreciation At 1 January 2013 Exchange differences Charge for the year Disposals Transfers/reclassifications
41 (2) 41 -
1,263 (29) 506 (520) -
5,498 (68) 2,965 (18) -
530 (14) 180 (7) (1)
7,332 (113) 3,692 (545) (1)
At 31 December 2013
80
1,220
8,377
688
10,365
Net book value At 31 December 2013
1,765
8,720
8,046
534
19,065
At 31 December 2012
1,841
5,855
6,549
520
14,765
Freehold property £000s
Leasehold improvements £000s
Computer equipment £000s
Plant, motor vehicles & equipment £000s
Total £000s
Cost At 1 January 2013 Additions Disposals
-
6,658 3,355 (520)
8,626 3,554 -
87 100 -
15,371 7,009 (520)
At 31 December 2013
-
9,493
12,180
187
21,860
Depreciation At 1 January 2013 Charge for the year Disposals
-
964 452 (520)
3,585 2,374 -
30 62 -
4,579 2,888 (520)
At 31 December 2013
-
896
5,959
92
6,947
Net book value At 31 December 2013
-
8,597
6,221
95
14,913
At 31 December 2012
-
5,694
5,041
57
10,792
Tangible fixed assets – Company
85
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 14. Investments Joint ventures and associates £000s
Other investments £000s
Subsidiaries £000s
Total £000s
Group Cost less provisions At 1 January 2013 Additions Share of results
4,334 (4,252)
(472) 2,019 -
-
3,862 2,019 (4,252)
82
1,547
-
1,629
Cost At 1 January 2013 Additions
7 -
674 1,582
9,296 -
9,977 1,582
At 31 December 2013
7
2,256
9,296
11,559
Provision At 1 January 2013 Provision in year
-
6 11
2,883 -
2,889 11
At 31 December 2013
-
17
2,883
2,900
Net book value At 31 December 2013
7
2,239
6,413
8,659
At 31 December 2012
7
668
6,413
7,088
At 31 December 2013 Company
Further information is in note 26 on joint ventures.
15. Work-in-progress Group
Work-in-progress
86
Company
31 December 2013 £000s
31 December 2012 £000s
31 December 2013 £000s
31 December 2012 £000s
5,325
11,759
5,080
4,845
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 16. Debtors Group
Trade debtors Amounts recoverable on contracts Amounts owed by ultimate parent company Amounts owed by subsidiary undertakings Amounts owed by joint ventures and associates Development loans Taxation and social security receivable Other debtors Prepayments and accrued income
Company
31 December 2013 £000s
31 December 2012 £000s
31 December 2013 £000s
31 December 2012 £000s
112,983 33,577 1,679 323 13,730 2,184 7,469 64,770
120,169 10,513 7,762 1,027 15,222 5,076 73,237
70,875 26,369 1,679 34,003 322 13,730 3,976 44,432
75,757 7,762 44,814 842 15,222 555 53,063
236,715
233,006
195,386
198,015
Amounts owed by the ultimate parent company are due after one year. Development loans represent investment in development projects made to secure construction turnover, together with development returns. The amount outstanding relates to four projects which are substantially complete. The loans are repayable upon successful completion of the projects.
17. Creditors: amounts falling due within one year Group
Bank and other loans Payments received on account Trade creditors Amounts owed to subsidiary undertakings Taxes and social security payable Other creditors Accruals and deferred income
Company
31 December 2013 £000s
31 December 2012 £000s
31 December 2013 £000s
31 December 2012 £000s
86 291 96,693 34,607 3,104 234,951
73,481 23,258 5,268 224,726
67,363 1,398 25,332 1,236 176,449
55,158 3,308 13,772 2,357 162,870
369,732
326,733
271,778
237,465
18. Creditors: amounts falling due after one year Group
Payments received on account Bank loans
Company
31 December 2013 £000s
31 December 2012 £000s
31 December 2013 £000s
31 December 2012 £000s
13,945 26
22,377 -
13,943 -
22,348 -
13,971
22,377
13,943
22,348
87
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 19. Share capital
Authorised: 2,000,000 Ordinary shares of £1 each 200,000,000 ‘A’ Ordinary shares of £0.01 each
Allotted, called up and fully paid: Equity shares: 975,888 Ordinary shares of £1 each 348,000 ‘A’ Ordinary shares of £0.01 each
At 31 December 2013 £000s
At 31 December 2012 £000s
2,000 2,000
2,000 2,000
4,000
4,000
976 3
976 3
979
979
The ‘A’ Ordinary shares have restricted voting and dividend rights
20. Share premium account
At 1 January 2013 and 31 December 2013
At 31 December 2013 £000s
At 31 December 2012 £000s
17
17
21. Reserves Capital redemption reserve £000s
Other reserves £000s
Group At 1 January 2013 Exchange movements Profit for the year Dividends paid
60 -
65 -
19,096 (1,632) 23,513 (16,412)
At 31 December 2013
60
65
24,565
Company At 1 January 2013 Exchange movements Profit for the year Dividends Paid
60 -
-
12,333 (4) 17,775 (16,412)
At 31 December 2013
60
-
13,692
88
Profit and loss account £000s
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 22. Reconciliation of movement in equity shareholders’ funds Group 31 December 2013 £000s
Profit for the financial year Exchange movements Dividends paid
Company 31 December 2012 £000s
31 December 2013 £000s
31 December 2012 £000s
23,513 (1,632) (16,412)
18,509 (691) (16,513)
17,775 (4) (16,412)
16,809 (16,513)
Net addition to shareholders’ funds Opening shareholders’ funds
5,469 20,217
1,305 18,912
1,359 13,389
296 13,093
Closing shareholders’ funds attributable to equity interests
25,686
20,217
14,748
13,389
23. Future commitments At 31 December 2013 the Group had annual commitments under non-cancellable operating leases as set out below:
Land and buildings Leases expiring: Within one year Between one and two years Between two and five years After five years
Other Leases expiring: Within one year Between two and five years
At 31 December 2013 £000s
At 31 December 2012 £000s
496 722 3,145
461 120 533 1,703
4,363
2,817
56 474
32 312
530
344
The group has no capital commitments.
24. Contingent liabilities The company is party to a group liability arrangement with its principal bankers providing a right of set off of all group balances. Whilst one group company has an overdrawn balance, at 31 December 2013 there was no net group indebtedness and therefore the directors consider that no contingency arises.
89
Mace Limited
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 25. Subsidiary undertakings The following companies were the principal subsidiary undertakings at 31 December 2013: Country of registration/incorporation
Class and percentage of shareholding and voting rights
Nature of Business
United Kingdom Como Interiors Limited 1
England & Wales
Ordinary shares 100%
Interior fit out
Mace Plus Limited 2
England & Wales
Ordinary shares 100%
Construction delivery
Mace Business School Limited
England & Wales
Ordinary shares 100%
Training services
Mace Sustain Limited
England & Wales
Ordinary shares 100%
Health, safety and behavioural management consultancy
The People Group Limited 3
England & Wales
Dominant influence exercised
Recruitment consultancy
Mace Macro Limited
England & Wales
Ordinary shares 100%
Facilities management
Mace Cost Consultancy Limited
England & Wales
Ordinary shares 83.7%
Cost consultancy
Mace MEP Services Limited
England & Wales
Ordinary shares 100%
Mechanical and electrical engineering construction
Msecure Limited
England & Wales
Ordinary shares 100%
Construction delivery
Europe and rest of the world Mace International Limited
Cyprus
Ordinary shares 100%
Holding company and project management
Mace Holdings Limited
Cyprus
Ordinary shares 100%
Holding company
The equity of this subsidiary is held by Como Group Limited. The equity of this subsidiary is held by Mace Plus Group Limited. 3 The ordinary share capital of The People Group Limited is owned 100% by the Mace Limited Employee Benefit Trust (‘EBT’). The EBT has implemented a long term incentive plan under which senior executives may be incentivised by the grant to them of reversionary interests over a portion of the assets of the EBT. These interests are capable of vesting on or before 31 December 2015 if specific conditions are met and were granted at a price of 526 pence per share. In addition, Mace Limited’s representatives constitute 100% of the Board of The People Group Limited. Therefore, in accordance with accounting standards and as a result of the dominant influence exercisable, the interest in The People Group Limited continues to be consolidated as a subsidiary within the group’s accounts. 1 2
The company has guaranteed the liabilities of the following subsidiaries exempt from audit under section 479A of the Companies Act 2006: Mace Living Limited (Company number: 5156449) Mace Real Estate Limited (3471116) Mace Macro (The Americas) Limited (6910338) Mace Plus Group Limited (5349265) Graduation Student Living Limited (7773718) Mace (Poland) Limited (8120932) Mace Plus Academies Limited (5897947) Graduation (Crags) Limited (8240550) Mace Developments Limited (8057302)
90
Mace Business School Limited (5601050) Mace Macro Europe Limited (6897543) Mace Macro (Asia Pacific) Limited (7407865) Como Group Limited (4643572) Como Homes Limited 4969652) Como Construction Limited (4643980) Mace International Overseas Limited (7463976) Newington Butts Development Limited (8240609)
Annual Accounts
Notes to the Financial Statements Year ended 31 December 2013 (contd.) 26. Joint ventures and associates The following companies were the principal joint ventures and associates at 31 December 2013: Country of registration/incorporation
Class and percentage of shareholding and voting rights
Nature of Business
CLM Delivery Partner Limited
England & Wales
Ordinary Shares 25%
2012 Olympic delivery partner
Hadley Mace Limited
England & Wales
Ordinary Shares 50%
Development
Vennsys Limited
England & Wales
Ordinary Shares 15%
Programme Management
United Kingdom
The following represents the aggregate share of joint venture and associate tangible fixed assets, current assets and creditors due within one year of which CLM Delivery Partner Limited is the majority.
Tangible fixed assets Current assets Creditors due within one year
At 31 December 2013 £m
At 31 December 2012 £m
0.3 2.8 3.3
6.9 2.1
27. Related Party Transactions During the year the company billed and charged its non-wholly owned subsidiaries and joint ventures and associates the following amounts in respect of services and corporate allocations:
CLM Delivery Partner Limited Vennsys Limited Mace Cost Consultancy Limited
At 31 December 2013 £000s
At 31 December 2012 £000s
2,141 825 330
11,753 1,298 315
At 31 December 2013 the amounts due (to)/from non-wholly owned subsidiaries and joint ventures and associates were: At 31 December 2013 £000s
CLM Delivery Partner Consulmace Lda Mace TPT Vennsys Limited Mace Cost Consultancy Limited
184 1,160 (42)
At 31 December 2012 £000s
252 256 12 1,469 437
28. Ultimate parent undertaking The company is a wholly owned subsidiary of Mace Group Limited, a company incorporated in England and Wales.
91
Mace 155 Moorgate London EC2M 6XB +44 (0)20 3522 3000 www.macegroup.com