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.

“These developments further strengthen our position in the facilities management outsourcing market as well as the fast growing healthcare and energy markets, and leave us in a strong position as we enter the new financial year.”

Results for the year to March 31 2013 show revenue up 8.4% at £1,980m and pre-tax profit up £5.4% to £111m.

Chief executive Ruby McGregor-Smith said: “Whilst the economic environment remains challenging, we have reshaped the business to focus on long-term facilities management opportunities, as well as higher margin healthcare provision and energy consulting, all of which will support our growth aspirations.

“We expect outsourcing opportunities will continue to grow, with a trend towards more clients seeking to access integrated services. We are positioned to build further on our long track record of sustainable profitable growth.”