About 136 staff have been told their job is at risk at boiler installation company Swale Heating as the company tries to cut heavy losses.

All office-based staff at its Sittingbourne headquarters have entered a consultation process on redundancies.

It comes after its latest accounts show it made an operating loss of £896,000 in the year to the end of March 2016, compared to an operating profit of £352,000 in 2015.

The firm, one of the UK’s largest independent heating contractors, was unclear yesterday when asked on the exact number of job losses expected but said the consultation would not extend to engineering staff.

The company has confirmed this morning it expects to make 30 people redundant after the consultation.

Its latest accounts show it reduced its headcount to about 425 people last year, down from about 470 the year before, cutting its wage bill by 9% to £12.4 million.

Most of these cuts came from its number of service engineers, which fell from 245 to 216.

Head of HR David Bellis said: “Specific individual positions that will go are not yet known.

“We’re consulting fully with staff and will consider employee suggestions that might reduce the number of redundancies.

“Our aim is to keep the overall impact on staff to a minimum and maintain the high standard of service that we offer our customers.”

Swale Heating said the consultation had been launched as the business focuses more on private customers rather than contract work with housing associations.

In its latest accounts, chairman and founder Ian Pierson – who launched the firm in 1972 at the age of 22 – said the firm had carried out a review “to identify any loss-making contracts within the affordable housing sector”.

Revenues slipped 8% to £45.7 million, while gross profit was down 23% to £5.3 million.

This gave it pre-tax and pre-interest losses of £823,000 after making a profit of £349,000 a year earlier, a decline of 335%.

Only the sale of £1.1 million of assets saved it from an overall pre-tax loss, making a surplus of £96,000.

In his report, Mr Pierson said: “Challenging market conditions, the withdrawal from loss making contracts and the impact of the organisational restructure have seen a fall in the turnover and gross profit margin.

“Considerable effort is being made to review and reduce overhead levels and to improve service productivity in order to boost net profit in future years.”

He added: “The directors consider the forthcoming year will be another year of challenging trading conditions.

“Their aim is to continue to implement management policies which have been introduced in recent years and continue to pursue growth and market share whilst maintaining margins.”

The firm has taken on a number of large housing association contracts in recent years, operating throughout London and the home counties, East Anglia and the Midlands.

In 2014 it announced a six-year extension to a contract to service about 22,000 homes in south London and Kent for Affinity Sutton.

“This move is in response to the ending of two housing association contracts, neither of which generated significant profits..." - David Mathieson, Swale Heating

A year earlier it won a share of a £400 million contract to carry out repairs and maintenance work for the housing association the Hyde Group, which has 12,000 homes across Kent, Surrey, Sussex, Northamptonshire, Norfolk and Peterborough.

Earlier this month, the firm announced it has been appointed by energy supplier SSE to support the expansion of its emergency home services operation in parts of Swale’s coverage area.

Managing director David Mathieson added: “This move is in response to the ending of two housing association contracts, neither of which generated significant profits.

“The ending of these two contracts, with the subsequent reduction in unprofitable workload, will allow us to grow profit and to provide a better service to our customers.

“Despite the operating loss reported in the KM for last year, the overall business remained profitable and is in a strong and well-funded position, with no debt or overdraft.

“The change we are going through is a one-off event which will structure our business correctly for the future following the end of these two contracts.”

An earlier version of this story stated 180 staff had been told their jobs were at risk. This was based on figures taken from Swale Heating's most recent accounts. The KM Group notified a spokesperson for the firm of these figures and reported them in good faith. It actually has 136 full and part-time office-based staff under consultation. We are happy to correct this error.