Chief executive puts profit fall down to move to new headquarters and investment in new services.
Pre-tax profit at construction manager Mace fell 38% to £650 000 from £1.04m for the year to 31 December 1998, accounts filed at Companies House show. At the same time, turnover rose 16% to £29m.

Mace chairman and chief executive Bob White said that, although the group’s 1998 results were “disappointing”, they should be seen in the context of investments in building new headquarters and reshaping the business.

He predicted that these would pay dividends in next year’s results. “The UK market has been very good so far this year, particularly in our core construction management business, and we have 60% of our potential workload secured for the forthcoming financial year.”

The result for 1998, by turnover, breaks down into:

  • Project management, which fell 7% to £7.56m

  • Construction management, which fell 3% to £16.3m

  • Construction consultancy, which rose 31% to £2.49m

  • Planning supervision, which rose 17% to £344 000

  • Facilities management, which fell 2% to 469 000

  • Development management, which rose from zero to £1.98m

Staff numbers rose by 48.

White said large amounts of money had been injected into “business migration” and process re-engineering” as well as Mace’s new head office in north London’s Camden, which White said cost more than £1m.

In his statement to staff, shareholders and clients, White says Mace is now better placed to react to market changes. “Our service migration of the past two to three years has been designed to develop the opportunity to offer a series of services throughout the project cycle.

“We are now in the middle of a ‘fitness programme’ to ensure that we are offering best-in-class services throughout the business. In some circumstances this will involve integrating alliance partners into our service offer,” he said.

“While the financial results of 1998 are therefore disappointing after a strong 1997, they must be seen against significant investment in both new accommodation and reshaping ourselves to maximise our potential to respond to the changing market.”

White also said opportunities were “particularly exciting” for the group’s international team in 2000. During 1998, Mace established new offices in Poland, Spain and Portugal, and strengthened its Middle East operations. Turnover for Europe rose from £88 000 to £789 000, and Middle Eastern turnover rose from £90 000 in 1997 to £364 000.

White said 1998, a year of market uncertainty, had been overshadowed by the departure of Mace founder and chairman Ian Macpherson.