the times | Saturday May 28 2022 59The ManifestoBusiness
M
ark Reynolds is at the
sharp end of alarming
materials price
increases and global
economic uncertainty.
The chairman and chief executive of
Mace, the contractor behind
landmarks such as the Shard in
London and new HS2 stations in
Birmingham and the capital, monitors
cost rises daily across a global
portfolio of development projects.
The cost of raw materials in Britain,
already inflated by shortages caused
by pandemic disruption, was 25 per
cent higher in April than a year
earlier. Reynolds saw the price of steel
go up from about £800 a tonne to
£1,400 that month. “The crisis is here
today, and it’s going to be here until at
least March next year,” he says.
Rises in energy prices have put
further pressure on manufacturers of
steel, aluminium, glass and
plasterboard.
Mace’s business is reviewing some
projects, including 1,800 planned
homes in Stevenage, Hertfordshire,
until there is more certainty around
costs. “Until we’ve got some stability,
we’re not going to be starting on site.
We have to go back and re-engineer
the project if we can,” he says.
Mace, founded in 1990 by former
Bovis executives, builds housing,
schools, hospitals, data centres,
Olympic parks and skyscrapers. As
well its UK construction division,
Mace has a growing consultancy
business and overseas operations —
including in Dubai, where it delivered
Expo 2020, and Peru, where it was
behind the 2019 Pan American
Games in Lima. It employs about
7,000 people and reported group
revenue of £1.7 billion and a pre-tax
profit of £19.7 million in 2021.
Reynolds, a competitive swimmer
who trained with the Great Britain
team in the 1980s, is fresh from a
morning dip in Stratford, east
London, where he has led Mace’s
work for the past decade transforming
the location for the London 2012
Olympics into one of Europe’s biggest
regeneration projects, complete with
housing, office space, cultural sites
and sports venues. Ongoing
developments in Stratford include a
new outpost for the Victoria & Albert
Museum, V&A East.
Reynolds grew up in Watford and
tagged along to building sites with his
father, who had a small roofing and
housebuilding business. He left school
at 16 and joined Lovell Construction
as a management trainee, getting
experience across departments
including surveying, estimating, site
management and engineering. When
he finished his training he became a
planning manager.
Reynolds joined Bovis in 1987 to
work on the Broadgate office scheme
in the City of London, then led by
Stanhope, the developer. He describes
it as the “premier league” of
construction at the time. “We did all
different things — modular
bathrooms, cladding panels... theclient was very hands-on and very
inspirational.”
He was working at Heathrow in
1990 when he heard that Mace was
being set up by former Bovis
executives, Ian Wylie among them.
He asked Wylie’s personal assistant if
he could find time to talk and soon
got a call from Wylie himself.
“I won’t tell you what exactly he
said but it was roughly, ‘Don’t eff
about Mark, come and join us.’ ”
For several years after joining Mace
in 1996, Reynolds focused on
contracting frameworks with
Heathrow, including the Terminal 5
building, and made it the most
profitable part of the business.
He then took over responsibility for
London 2012, which in turn becameCosts are going through the roof, and
that’s especially bad news for builders
Mark Reynolds of Mace
knows his industry is
in the grip of a crisis,
but he has a plan, writes
Louisa Clarence-Smith
After joining Mace in 1996, Reynolds twice made the divisions he was running the most profitable parts of the business. He was appointed chief executive in 2013the most profitable part of business
because it grew so much. “When you
do that twice, it kind of gets
recognised,” Reynolds says. He was
appointed chief executive in 2013.
Reynolds is Mace’s biggest
shareholder (the others are all
directors of Mace Finance, the parent
company). They shared a total
dividend payout of £1.2 million in
2020, down from about £7.6 million in- No dividends were paid during
the 12 months to February 2021 due
to Covid-19.
The company furloughed hundreds
of staff at the start of the pandemic,
taking £4.5 million from the
government’s support scheme. While
other developers have repaid money
drawn from the scheme, Reynolds
says he is “quite proud” Mace took it:
“We pay our taxes, our employees pay
their taxes, and it kept everyone in
jobs”. In the UK, where Mace employs
about 4,500 people, fewer than 100
jobs were lost during the pandemic.
Reynolds wants to grow the
company to £3 billion annual revenue
by 2026. Growth areas include Mace’s
consultancy business, with clients
around the world seeking to benefit
from its expertise and experience.
Consultancy makes the company
more resilient, as people can be
transferred to it from construction
during a downturn.
Reynolds is in demand for non-
executive posts on property company
boards but is focusing on Mace and
his roles on the board of the
Construction Leadership Council; as a
director of London First, the lobby
group; and at the Northern
Powerhouse Partnership think tank.
He is excited about innovations in
construction that Mace is now
deploying, including cement-free
concrete and offsite manufacturing.
The contractor was recently
appointed by BT, the telecoms giant,
to retrofit its former headquarters in
London as a net-zero office.
Given the current headwinds,
Reynolds is having difficult
conversations with clients about
handling cost increases, with some
developers wanting Mace to shoulder
the risk. However, Reynolds says he is
refusing to sign contracts in those
circumstances. Instead, he is trying to
work with developers to agree
changes to schemes that mean Mace
can stick to the agreed cost.
He is most worried about sub-
contractors in the supply chain, who
have not necessarily placed orders formaterials before agreeing a contract
with Mace. “They’re the people at the
biggest risk. So we’ve some big issues
with that — not that they are coming
to us at the moment. But it’s started,
so we need to be mindful of how we
look after our subcontractors, because
we can’t deliver without them.”
He would like the government to
offer Covid-style loans to small and
medium-sized contractors to get them
through the cost crisis. But despite
the headwinds, Reynolds appears
calm. “I’ve been through worse,” he
says. “We can get through this [crisis]... It will stabilise and those people
who can come up with better ideas
and do it more cost effectively will be
the ones to bust through.”
The outlook is good. The UK
construction industry employs
2.1 million workers and is short of
50,000. “We can create jobs, and if
you can create jobs, you’re OK.”
He hopes the industry will get
better at making construction an
appealing sector to work in.
“Construction is as attractive or
unattractive as any industry as far as
I’m concerned. You can do digital
skills — the whole digital
environment is changing beyond
recognition... Factory-based working
is going to be much more prevalent.”
He adds: “I think our issue is
presenting the industry better to
people coming out of school.”
A turning point in his own life was
joining a swimming club as a
teenager. “The swimming coach I had
at the time just grounded everyone.
His phrase used to be, ‘You train as a
team, you compete as an individual.’
Now I say that today when people
turn up in a training session and they
go running off.”
VICKI COUCHMAN FOR THE TIMESQ&A
Who is your mentor?
Rick Bailey, the 1984 GB
Olympic swimming
coach. He gave me the
belief I could achieve
anything with hard
work and good
technique. Also the late
Ian Wylie, who recruited
me to Mace.
Does money
motivate you?
You have to enjoy what
you do. I believe
everyone should have
enough money to do
the things they enjoy
(within reason).When was the most
important event in
your working life?
I can’t claim any credit,
but it has to be London
winning the right to
host the 2012 Olympic
& Paralympic Games.
Who do you
most admire?
My wife, Debbi.
What is your favourite
television programme?
Drive to Survive.
What does leadership
mean to you?
Give everyone the
opportunity to reach
their potential.
How do you relax?
I swim competitively,
which means I train
six times a week.CV
Age: 59
Education: Queens’
School, Hertfordshire;
Willesden College of
Technology, northwest
London.
Career: 1979, Lovell
Construction; 1987,
Bovis Construction;
1996, Mace, appointed
chief executive in 2013
and chairman in 2022.
Family: Married to
Debbi for 36 years. They
have three children:
Tom, 31, Joanna, 30 and
Jack, 24; and one
grandson, Harvey, 4.