Romec posts another 10 years at Royal Mail

20 April 2011

Romec Limited has agreed a new FM contract with Royal Mail Group in a 10 year deal that also sees Balfour Beatty bag its Romec Services business.

The Romec joint venture, in which Royal Mail Group and Balfour Beatty hold, 51 percent and 49 percent ownership, respectively, was established in 2002. Romec provides a wide range of technical and building services to Royal Mail, Post Office and Parcelforce Worldwide buildings, including electrical, plumbing, security and cleaning services, and generates approximately £150m of revenue annually.
Under the new services agreement, which will come into effect this month, Romec will provide contracted services to Royal Mail Group worth £0.9bn with further variable scope for works worth up to £0.9bn over the 10-year term.
As part of this new agreement Balfour Beatty will acquire Romec Services Limited (RSL), Romec’s external trading business which provides mobile engineering and maintenance services to third-party customers such as Sainsbury’s, Asda, BBC, British Museum and Camelot. With £36m of facilities management revenue and £13m of gross assets in 2010, RSL will give Balfour Beatty a highly-skilled technical services business with scale and a nationwide footprint which will significantly enhance Balfour Beatty’s ability to serve its customers and support the growth plans in this business sector.
Balfour Beatty Chief Executive, Ian Tyler, explained, "The joint venture we have developed with Royal Mail Group is now entering a new and exciting phase. We are delighted to develop the new Romec organisation from a tactical supplier to one of Royal Mail's key strategic partners, supporting its transformation programme.
We are also excited about the opportunity to develop RSL. The combination of RSL’s engineering skills and the breadth and resources of our Support Services business can enhance our service delivery model and capitalise on the potential growth in facilities management."
Mark Higson, Royal Mail’s Managing Director of Operations and Modernisation, said: "We are very pleased to be extending our joint venture with Balfour Beatty. The provision of effective and highly efficient services in our buildings plays an important role in ensuring our people provide the best possible services at competitive prices to all our customers."
tony.billington@romec.co.uk