Firm hands out dividend after taking furlough cash

Mace will have to more than double revenue in the next five years if it is to hit its £3bn turnover target by 2026 after the firm said income slipped last year to £1.7bn.

The firm, which is set to build the Curzon Street and Euston station schemes at either end of the first leg of the HS2 railway, said group turnover for the year fell 3% after jobs were stalled and mothballed by the covid-19 pandemic.

Mace, which filed its 2020 results with Companies House at the start of the month, said its construction business raked in £1.2bn of revenue, 71% of turnover, but this was down from the £1.4bn it posted in 2019. The division made a £35m pre-tax profit, down 25% on 2019.

Mace HS2

Mace is working with Spanish JV partner Dragados on the Curzon Street and Euston station schemes of the HS2 railway

But its consulting arm saw income rise 9% to £342m during the year although pre-tax profit at the business slumped 23% to £38.3m.

Overall pre-tax profit at the group, which includes £212m of FM and development work, was £19.7m – a 16% fall on the £23.4m it filed in 2019.

But chief executive Mark Reynolds said this year would be better with revenue expected to be closer to the £2bn mark and added: “2021 is set to be a strong year and we have ambitious plans for 2022.”

In the accounts, the firm, which is saying goodbye to former boss Steve Pycroft at the end oof the month, said it was hit by an exceptional charge of £15.5m which it said was a provision on a loan to a joint venture but gave no further details.

The number of people it employed during the year largely remained flat at 5,400 with the firm claiming £4.8m from the government’ Coronavirus Job Retention Scheme.

It said that £1.1m of the figure had been paid to clients “because it related to employees whose salary cost is recharged to clients”.

But the issue of whether firms should pay dividends ahead of handing furlough money back has resurfaced after the accounts revealed the firm paid a £1.2m dividend during the year, although this was paid in January 2020 before the pandemic and before the firm made furlough money claims.

The firm said its net cash position at the year end was £25m from a net debt of £147m at the end of 2019.

It said that it will pay back the remaining £30m of a corporate bond it took out in 2017 by the end of this month – and ahead of next March’s deadline – having repaid the remaining £90m earlier this year. Mace said it was also hoping to strike a £60m deal for fresh liquidity by the end of the year.

The results also reveal that a $2.7m loan from the US government, made to support businesses working in the country during the pandemic, was written off over the summer. Mace said the money was used to support staff wages in the US.

Its biggest region remains the UK and Europe with £1.7bn of business followed by the Middle East and North Africa at £88m and the US with £31.5m.