MORT.L Regulatory News (MORT)

23 Jul 2008 07:00

Mortice Limited

("Mortice" or "the Company")

Contract Wins 

Mortice Limited, (AIM:MORT), a security and facilities management company based in India, is pleased to announce that since listing on 15 May 2008, the Company has performed strongly and has won a number of contracts across both its subsidiaries, Peregrine Guarding Limited ("Peregrine") and Tenon Property Services Limited ("Tenon").

Peregrine Guarding, has been awarded six new contracts for the provision of security services in India. New clients include a global telecoms operator, a global energy and petrochemical group, one of the largest pipe producers in the world and three global consultancy businesses. These contract wins increase Peregrine's presence from 19 to 21 of India's 28 states. 

In addition, Tenon Services, the group's facilities management arm, has won three new contracts. These include RMZ Corporation, a leading Indian corporate real estate developer responsible for developing over 13 million square feet in the last 7 years, which has appointed Tenon to provide property management services at RMZ Infinity, a prestigious development in Bangalore. 

Tenon has also won contracts with an international semiconductor producer and a leading financial outsourcing company. Tenon now provides services to a portfolio of over 1.5 million sq.ft. and operates across 6 Indian states. 

The combined value of these contracts equates to an approximate annualised revenue of INR 78 million (approximately GBP £912,000*) and both Tenon and Peregrine are currently in discussions with a number of potential clients regarding the provision of similar services. 

Mortice's strategy is to employ an integrated approach to project, property and facilities management services. Historically, these services were out-sourced by property management companies but due to increasing labour and infrastructure costs there is a growing demand in India for Companies with the capability to undertake these services in house. 

Through continued organic growth and via acquisition, Mortice will develop its existing capability to undertake all major facilities services in house, in order to maximise efficiency for clients and unlock value throughout the supply chain. This will enable the Group to cross sell its services to its existing client base, capitalise on its already strong Indian presence and expand internationally. The market for facilities management and property services in India is estimated to be worth $6billion over the next three years as the Indian economy grows at an expected rate of 8% per annnum. 

Manjit Rajain, Executive Chairman, commented:

"The Group has performed very well since listing in May and has won a number of major contracts with global corporates operating in India. The demand remains extremely strong for efficient delivery of facilities and project management from companies who can perform these services in house. We will continue to strengthen and develop our capabilities whilst actively looking to expand the Group's presence across all 28 Indian states."

* As per current exchange rate of 1 GBP = INR 85.53 as of noon (IST) on 22.07.2008

For further information please contact:

Mortice Limited

Manjit Rajain, Executive Chairman   Tel: +91 981 800 0011

Andrew Barker, Executive Director Tel: +91 974 130 9401 

Grant Thornton UK LLP

Fiona Owen Tel: +44 207 383 5100

Jermyn Capital Partners PLC

Dharmesh Doshi Tel: +44 207 399 2020

Pelham PR

Alex Walters / Hugh Barker Tel : +44 203 159 4399 

Notes to Editors

The Future Development of the Property and Facilities Management Market in India

Over the last decade, the Indian Property and Facilities Management market has seen considerable growth following the continuing influx of a large number of multinational corporations that are seeking a higher quality, cost efficient services. Market drivers include those such as, the recent relaxation of FDI regulations; hotel supply and demand; financial products and insurance for a new generation of wealthy Indians; a growing middle class with new aspirations; and increased privatisation of infrastructure projects and increased manufacturing outsourcing/off-shoring. 

Rising labour and infrastructure costs mean that India cannot continue to compete on price beyond the next three to five years. Across all market sectors, the evolving market in India needs property and facilities management companies that can self-perform their services to unlock value throughout the supply chain. 

The Directors believe that by vertically integrating with the supply chain for services such as transport management, critical environment management and maintenance, a truly-integrated property and facilities management service provider can significantly influence core business productivity and reduce risk. All of the major property and facility management companies in the market today are still, predominantly servicing customers in the first-tier cities and have little presence in the emerging cities. More businesses across a variety of sectors are now looking at the second and third tier cities to maximise growth potential and to be able to reduce the labour costs associated with location in the major cities. 

The Directors believe that there is a need for service providers with a true pan-India presence to help these organisations to scale their operations and introduce operating efficiencies. It has been estimated by the Directors that the developed facilities management market sector in India today is around 150 million sq ft and the undeveloped sector is estimated at 1 billion sq ft. Based on these figures, the market opportunity in India today has been estimated at $6 billion over the next three years (these figures, however, do not include properties under development or planned).