Mark Reynolds on what’s next for Mace Construct

Mark Reynolds wants to make one thing clear: Mace Construct is not for sale. Like others, he has heard the rumours that several firms – trade buyers and private equity – are linked with a move.

But Reynolds, who has been at the business 30 years, wants to be very clear. “Mace is not up for sale. I have never said to any CEO [of a rival]: Would you be interested in buying Mace?”

The Mace in question is, of course, Mace Construct. This name, for the construction business at least, is set to disappear and replaced with a new marque, most likely by the start of next year.

Reynolds appears to be in a combative mood, impatient with the speculation. “We are concentrating on our business,” he says. “Mace is categorically not up for sale.”

The rumours keep surfacing and therefore so do the questions but Reynolds, who has been executive chairman since the beginning of last year and is the firm’s biggest shareholder, has had enough and shoots back: “Don’t keep asking the same question.”

He is here to talk about what comes next, following the completion earlier this year of the deal to sell a majority stake in Mace Consult to the private equity arm of Goldman Sachs.

A new home, and no new CEO

It has been a dizzying few months at Construct. In January it said it would be looking for a new name; in May it announced its chief executive Jason Millett would be leaving by the end of the year; and last month it confirmed that its CFO for the past three years, David Allen, was also leaving. It has been looking for a new office as well.

Quite a lot of spinning plates, then, and the firm has recently been keen to point out that Reynolds, who has a high-profile role as co-chair of the Construction Leadership Council, is very much front and centre at Construct and that if anyone is going out to bat for it, then it is him.

So, first something Reynolds can share: Mace will be moving out of its 155 Moorgate home by the end of the year. It has given notice to landlord Landsec, with Construct staff set to move to a new office at 6 Devonshire Square, near Liverpool Street Station. Consult staff are also leaving, moving into new offices at the top of Southwark Bridge this autumn.

Construct is taking 20,000sq ft across two floors at Devonshire Square and is saying goodbye to 155 Moorgate after 14 years, having moved there from its previous office at Camden.

Around 2,000 staff work at Construct, and 250 are expected to be based at Devonshire Square, with Reynolds saying the move is likely to be completed over this coming Christmas.

By that time, Millett, who has been at the business 18 years and is looking at moving into a client role, will have stepped down as CEO. Reynolds says the firm is not looking for an immediate replacement. “Not at the moment,” he adds when asked if a search for Millett’s successor has begun. “We’re not looking, there’s no search, no one [headhunters] has been employed.” In short, there will be no new CEO this year.

He says: “I’m executive chair; that has challenges in its own right for any CEO. I have no plans to change my job title.”

He says Construct’s existing managing directors – Ged Simmonds, Nigel Cole, Rob Lemming and Gavin Seager, who head the Commercial, the Infrastructure, and the Public, Science and Technology and Specialist Services and Interiors divisions respectively – will help lead a push into new sectors.

The firm recently brought in Ruth Dunphy from HS2 to help out with the transformation of the business in the wake of the Consult deal and earlier moves to sell its FM business and scale back its development arm. Dunphy carried out the same role at the high-speed railway and before that at Bam.

We were a group before; now effectively we’re Construct. We have a small development team, we sold FM to the management and we’ve carved out Consult

Mark Reynolds, Mace

Reynolds says: “We were a group before; now effectively we’re Construct. We have a small development team, we sold FM to the management and we’ve carved out Consult.”

This slimming down, he adds, also explains why the firm will cope when Allen, a former boss of Wates, goes this autumn. “We don’t need a group FD, a finance director and a construction FD.”

While there are no immediate plans to appoint a replacement for Millett, a new name for the Construct business is very much on the agenda. The firm has not got a replacement yet but is working with branding agency Koto to come up with one.

“We have a longlist but not a shortlist,” Reynolds says. The firm is running the rule over around 40 names, and Reynolds says he would like to get a new name in place by the autumn. “November at the latest,” he adds.

The search for a new name

The Mace name is staying with the Consult business, which it seems will simply be known as Mace in the future. Under the terms of the agreement with Goldman Sachs, Construct can keep using the Mace name until March 2028, but Reynolds says: “We agreed to do it [change the name] this year. It just avoids confusion for everyone.”

By the end of this year, Construct will have around £300m in the bank. Asked how much has been put in from the proceeds of the sale of Consult – Goldman Sachs is thought to have paid around £875m for a 75% stake – Reynolds is not specific. “A lot,” he says. But he adds it means the company will be debt-free and can plot a route into those new markets. These include defence, more work for Network Rail such as stations, and “rebuilding” its fit-out business.

It also sees “great opportunities” in data centres, and Reynolds is keen to dismiss suggestions that a problem job in the sector put a question mark over its commitment to it. “We got burnt once. That was a bad job for a good client. We bought it in 2018, then we had covid, higher inflation and a contractor go bust on us.”

Its railway work is centred on the new HS2 station at Curzon Street, which it is building in joint venture with Spanish contractor Dragados. The pair were supposed to be doing the same for HS2 at Euston but that job has been mothballed for more than three years now and Reynolds admits: “I expect Euston will be retendered in time.”

He says Construct is committed to fit-out but concedes it has lost ground to market leader Overbury and a resurgent Structure Tone led by former ISG chief executive Matt Blowers.

He adds that the firm’s 2025 numbers, expected to be out later this month, will be hit by some retrofit projects. “We didn’t properly assess the risks. They go back three years. We’ve still got three or four [of them], but by September we’ll be through them.”

Reynolds says he stood down as Mace Group CEO at the end of 2024 in order to concentrate on the Mace Consult deal.

Investment banks had been appointed in April that year – initially to find new funds to grow Consult. Separating it out was not on the agenda, he says, but it quickly became the best option and eventually the firm spoke to 10 organisations – all private equity – last February about a deal. The firm went out to five for non-binding agreements last April, and four came back in May, which was whittled down to two bidders the following month. “Binding offers came back in mid July and we signed up [with Goldman Sachs] a week later.”

2028 is looking very strong; we’ve got a very full order book. It’ll be around £2.6bn

Mark Reynolds, Mace

A disposal to a rival was not an option, he adds. “It was never going to go to a trade sale. We wanted to maintain ownership of the business [Reynolds, Millett and Consult chief executive Davendra Dabasia have kept a 25% stake] and keep the Mace brand. We didn’t even entertain the idea [of a trade sale]. Consult is building a global brand. We spent a lot of time building that brand, and [the Goldman Sachs deal] sets it on a path that means it’s going to have a long legacy.”

A focused contractor

What it all means, says Reynolds, is that Mace Construct, when it has its new name, “will be a solely focused construction business in the UK”.

He says turnover in 2025 will be around £2.3bn for Construct, helped by some jobs it picked up in the wake of ISG’s collapse, with the number due to drop to around £1.9bn this year. But go forward a couple of years, Reynolds adds, and things are looking good. “2028 is looking very strong; we’ve got a very full order book. It’ll be around £2.6bn.”

While close to two-thirds of its business is in London, Reynolds says: “We work in Manchester, Birmingham, East of England, Cambridge, Oxford. We are a national contractor.”

Mace – it stands for Management And Construction Engineering – started out in 1990, and Reynolds was in charge of the firm’s first ever fixed-price contract – a £1.5m health club in Swindon for Cannons in 1998.

It’s come a long way since those days and, with a nod to those rumours, Reynolds says firms like Mace will always be talked about – it comes with the territory. “I smile at all the stuff I hear,” he adds. “It’s interesting but actually it doesn’t mean a lot.”