Outsourcing giant Mitie is quitting the M&E contracting market.
The withdrawal is costing the company £22.1m in closure costs of its M&E division which had a turnover of £140m.
Redundancy costs are believed to account for £10m.
Mitie confirmed today: “We are exiting our cyclical mechanical and electrical engineering contracting businesses, which generated margins well below the group average.”
The firm stopped bidding for major one-off M&E contracts last year and has now decided to abandon the market completely to concentrate resources on higher-return sectors.
The division made a trading loss of £3.1m on turnover of £139.9m last year.
Mitie said: “We are focused on markets where we see potential for growth and which meet our margin targets.
“To this end, we have taken the decision to further reduce our exposure to cyclical markets, in particular our mechanical and electrical engineering contracting businesses, which we are exiting."