Facilities management group Mitie has delivered a further profit warning and has moved away from the care business.

Along with reporting a slide into losses in the first half and cutting its dividend, Mitie said that the second half of the year should see an improvement. However, the full year turnout is still expected to fall short of expectations.

The FTSE 250 listed firm has made the call to exit the domiciliary healthcare market, placed the company under strategic review and written off all healthcare goodwill and intangibles, as the division reels from downward pressure on rates and a reduction in care volumes.

The firm had warned two months ago that performance in the six months up to September 30 was being hit by changing market conditions, with firms throughout the UK adjusting to economic uncertainty and increasing labour costs by making short term reductions in higher margin project work and discretionary spending.

Although revenue went down by just 2.6% to £1.09 billion, the change in mix and lower discretionary spend saw margins squeezed and operating profits fell by 39% to £35.4 million, while the write-offs in healthcare saw Mitie plunge into a £100.4 million pre-tax loss compared to a £45 million profit a year ago.

This reflected £128.1 million of charges, including impairments and writing off of healthcare goodwill and acquisition-related intangible of £117.2 million and restructuring costs of £6 million.

Chief Executive Ruby McGregor-Smith, who will step down next month after 10 years at the helm, commented: “The first half of this year has been difficult but we are not alone in facing significant macroeconomic challenges.

“The steps we have taken to counter these impacts include the restructuring of both frontline and support functions across FM and the decision to withdraw from the domiciliary care market.”

As the previous year’s earnings per share revered into a 29.5p loss, the interim dividend was cut to 4p from 5.4p last year.