AN outsourcing firm, which employs thousands of workers in the North of England, could cut hundreds of jobs despite seeing it order book remain strong.

Mitie has revealed operating profits had increased to £122m, with pre-tax profits rising five per cent to £111m, for the year ending March 31, after further expansion in healthcare services.

However, the firm, which provides property and energy management, and employs more than 15,000 workers in the North of England, says its mechanical and electrical engineering contracts arm was hit hard by a slump of almost 40 per cent in the market for new private commercial buildings, with the division losing £3.1m in 2012.

Bosses, who are consulting with staff, said they can't reveal how many jobs might be lost, as they are consulting with staff, but said hundreds and not thousands of workers will be affected.

The announcement comes after Mitie revealed it has a number of contracts in place, including a £5m five-year deal to provide cleaning services to East Hull Primary Care Trust, and a five-year £20m contract to offer technical facilities management for car-maker Vauxhall.

Ruby McGregor-Smith CBE, Mitie Group chief executive, said: “We have had another good year with success in achieving growth driven by new and expanded contracts.

“While the economic environment remains challenging, we have re-shaped the business to focus on long-term facilities management opportunities, higher margin healthcare provision and energy consulting, which will support our growth hopes.

“We are positioned to build further on our long track record of sustainable profitable growth.”