Mace Group

Introduction

Mace delivered a robust performance in 2009 despite a challenging global economy. Revenue increased 18% to £726m in 2009 from £617m in 2008 and profit before tax increased 30% to £19.3m from £14.9m. The Group's cash balances remain very strong at £106m, with no debt, leaving us strongly positioned to take advantage of opportunities as they are presented. Analysis of our income at the end of 2009 reveals 69% of our turnover came from construction with 19% from consultancy and 12% from international project management commissions. The Board attributes this very encouraging performance to the efforts of our 2,800 employees worldwide.

Our vision is to be a globally recognised brand with an extensive service and sector offer that delivers unparalled service that truly makes a difference for our clients. Our long-term growth strategy continues and by working in close collaboration with our clients and partners we continue to deliver a quality service across all sectors worldwide.

2009 successes

The diversity of projects we secured in 2009 demonstrates our ability to offer integrated services throughout the UK and internationally.

At a time when other companies began to retrench, Mace took the decision to invest in the business to create a strong platform for future growth and, as a result our international presence, grew from 36 to 49 countries in 2009. In Europe we expanded our operations in Azerbaijan, Romania, Turkey and the Ukraine and in Africa we won projects in Angola, Libya and Nigeria. In the Middle East we built on our experience in Abu Dhabi and Dubai by winning work in Bahrain and Qatar and in Asia we continue to build a growing presence across the region including winning our first project in Vietnam. Mace also entered the Americas for the first time this year as Macro, our facilities management business, took the brand to Canada, the Caribbean and USA.

With the Vancouver Winter Olympics now over, the focus is turning to London 2012. Mace is part of the consortium CLM, the delivery partner to the Olympic Delivery Authority. The £5bn construction project is, without doubt, the most challenging and high profile project we have worked on to date and it remains on programme and within budget.

The creation of a strong platform for growth in 2009 was not exclusive to the overseas market. New business wins in the UK included a number of high-profile projects in central London for the Café Royal re-development on Regent Street; the British Museum extension and the transformation of Tate Modern on the South Bank. Another example of our strengthening profile within the construction industry and our ability to deliver large scale and high complex projects, has been our appointment to deliver The Shard at London Bridge. Already 22 floors high, it is set to be the tallest building in Europe with a planned completion date of 2012.

Staying true to our strategy, we continued to accelerate growth into emerging sectors with particular attention to both the public sector and infrastructure markets. 2009 saw the business investing in infrastructure across aviation, energy, highways, rail and utilities with completed projects for Nokia Siemens Networks and Metronet, new commissions for clients EDF energy, NaREC and BAA and continuing work with CrossRail, Network Rail and the Highways Agency among others.
Mace Limited

Chairman and Chief Executive's Statement and Operating Review

Our response in the public sector has been just as robust and, as testament to this, we were included for the first time in the NCE poll of top companies in terms of public sector work ranking at number 14. 2009 saw us winning places on many public sector frameworks such as Buying Solutions, Building Schools for the Future, Health Facilities Scotland and Becta frameworks. We delivered Hampshire County Council's headquarters, helping to turn it from a 1960s office block into the UK's most sustainable working environment with £200,000 savings on running costs per annum and completed one of the most complex museum refurbishment projects on the oldest public museum in the world - Oxford University's Ashmolean Museum.

To support these significant investments in our international and sector expansion, we realised an annual cost savings of £10m in 2009. We have achieved much of this by driving through operational efficiencies thereby minimizing redundancies. We continue to focus on future savings, supply chain improvements and more effective and efficient management to further reduce our cost base which, in turn, will benefit our clients and our business.

Mace is proud of the awards and accreditations received in 2009 and view these as an important way to benchmark ourselves against our strength and reward our performance. In 2009 we were once again highly placed by our staff in the Sunday Times Top 100 Companies to Work For; continued evidence that the balance of opportunities, training, support and remuneration we provide our staff is among the best in the industry. Mace was also voted by architects as the number one project manager to work with in the Building Design World Architecture Top 100 supplement for the second year running and was ranked as third in Construction News' Construction League 2009.

Changes to the board

We welcome the appointment of Mark Reynolds to the role of deputy chief executive at the year-end. Along with myself, Mark, and our three Chief Operating Officers Mark Holmes, for Consultancy, Gareth Lewis for Construction and Michael Davies for International, we have a strong and experienced leadership team to drive the business forward.

The future

Whilst we expect our future markets to remain challenging in 2010 as many of them remain impacted by political uncertainty in the UK and the global economic downturn, we are seeing some signs of recovery in certain markets. This, combined with the strength of our order book, gives us confidence of achieving our target of being a £1bn company by 2012.

At the same time we continue to assess new market opportunities that arise and use our track record and expertise to position the company in those new growth markets.

The company produced a robust performance in 2009 against a backdrop of challenging trading conditions. In 2010 the quality of the people we employ, our supportive clients and our growing financial strength and capability in our sectors gives the Board confidence that we will continue to grow and raise the profile the business.

Stephen Pycroft
Chairman and Chief Executive Officer
14 May 2010