Romec change programme prompts £14.6m pre-tax loss

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A £14.3m charge after securing a new ten-year contract sent Stockport-based facilities management company Romec to a pre-tax loss of £14.5m in 2012.

The company, which is a joint venture between Royal Mail Group and Balfour Beatty, said the payment resulted from a change programme initiated after signing the ten-year contract with its shareholder.

Founded in 1989 as the 'Royal Mail Engineering and Construction' division of The Post Office, Romec has since expanded its services and worked with clients such as Marks & Spencer and Sainsbury's.

It became a JV in 2002 and provides facilities management and engineering services, employing nearly 4,100 staff.

In March 2011, it signed a new ten-year extension to its existing deal with Royal Mail, which owns 51 per cent of Romec, for the maintenance and management of its 3,000-strong network of buildings.

Romec's turnover in the year to March 2012 was £139m, compared with £167.3m in the 15 months to 31 March 2011, while it posted a 2012 pre-tax loss of £14.6m, down from a 2011 pre-tax profit of £22.7m.

Its financial year end was realigned for 2010/11 to tie up more closely with Royal Mail's.

Notes accompanying the newly filed accounts said: "The pre-tax loss of £14.6m is stated after charging £14.3m of costs relating to the change programme initiated by the company following the award of the new Royal Mail contract.

"The programme has an agreed budget of £19.3m of which £14.6m was utilised in the year.

"The remaining balance will be utilised in contract years two and three. These costs are in line with the company's business plan and budgets.

"The change programme benefits include the restructuring of delivery resources, improvements to asset management efficiency, improvements to management information systems and securing additional Royal Mail services."

[POSTMAN]

In March 2011, it signed a new ten-year extension to its existing deal with Royal Mail, which owns 51 per cent of Romec, for the maintenance and management of its 3,000-strong network of buildings.

And how many buildings have gone since March,with many more to go.
Bit of a strange set up all this.