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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


Annual Review

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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Annual Review

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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Annual Review

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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Annual Review

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.

60


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.

62


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.

63


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.’

64


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.

76


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.

78

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


Mace Annual Report 2013