M&E contractor TClarke has said it will close its offices in Bristol and Cardiff by the end of the year, after a “disappointing performance”.
The company said the businesses were not capable of delivering the “quality of opportunity or level of sustainable margins” that it required and will therefore be closed by the end of 2015.
The offices are expected to incur a pre-tax loss of £2.6m, including cash closure costs of £300,000.
Any existing contracts will be taken on by TClarke’s South-west division.
The announcement was made in an interim management statement for the period from 1 July 2015 to date.
Net debt stood at £6m at 31 October 2015, compared with £8.7m as of 30 June.
However, the group said it expected net debt to fall for the second half of the year.
The group’s order book at 30 September was 15 per cent higher year on year and maintained at the level of £320m reported in its interim results.
Of the current forward order book, £190m represented work secured for 2016 and £50m for 2017 and beyond.
The group said it could see “significant” improvement in the quality of its order book as it worked through the majority of contracts it was awarded during the downturn, adding that it was “increasingly confident” this will be reflected in a “material increase” in its operating margin during 2016 and 2017.
“The improving quality of our order book is a function of our strategies of focusing on those business units and regions with the greatest potential to impact our future performance, especially London; aligning ourselves with high-quality contractors; and bidding only on those contracts that offer appropriate returns,” the company said.
TClarke also announced PwC chartered accountant Mike Robson has been appointed as an independent non-executive director, joining the group on 18 November 2015.