The division, turns over around £40m and employs around 50 staff, carrying out building and repair work for local authorities, specifically for schools and regional frameworks.

It has a place on the SMART south east framework and is working on North Lincolnshire and Lambeth BSF programmes.

May Gurney issued a trading statement this morning saying that it had reorganised its business into two clear trading divisions: public sector services and regulated services.

The restructuring and redundancy programme is on-going with around £2.9m set aside for redundancy payments.

May Gurney chief executive, Philip Fellowes-Prynne, said: “We expect the coming financial year to be one of consolidation for May Gurney, as we focus on driving margins on our newly-won environmental services contracts and bedding-in our internal reorganisation to ensure that it achieves planned efficiencies.

“The performance within the facility services business, which represents 7% of the company’s group turnover, proved disappointing.

“This is a non-core division and the company is reviewing its options, to include closure.”

May Gurney said it was on track to deliver year-end results in line with growth expectations.

The second half was driven by higher than expected revenues from its local authority highways maintenance business and a good performance from its long-term utility services contracts in repair and maintenance and M&E.

This has been balanced by newly-won environmental services contracts which are achieving recycling rates above client expectations, but are taking longer to reach their expected margins.

A small number of under-performing projects in Scotland were discontinued.