Building and engineering products firm Alumasc has admitted the MG Rover collapse had been painful and hit its annual results.
The company said write offs from its lost work with the Longbridge carmaker had knocked £1 million off its profits in the year to June.
The company reported fullyear pretax profits before goodwill of £ 8.4 million, compared with £8.7 million the previous year.
Reported pretax profits fell to £743,000 from £8.9 million, following losses on the exit from two non-core businesses Bissell and Copal.
Total sales rose to £ 121 . 6 million from £115.3 million.
Chief executive Paul Hooper admitted the year had been challenging, but said the firm was realigning itself increasingly in the building products sector and moving into the niche manufacturing sector.
The company's building products operations increased trading profits by 24 per cent to £6.2 million on sales up 20 per cent at £48.7 million. Sales were boosted by the acquisitions of Roof-Pro and Timloc.
Mr Hooper said: "The year has been challenging, but we have had a continuation of the diversification of the business.
"Now two thirds of our profits come from the building products, which is quite a transformation from five years ago when it was about a third."
At the industrial products operation, trading profits were 35 per cent higher at £300,000 on sales of £38.7 million, up ten per cent.
But Alumasc's precision components business saw its trading profit cut by 27 per cent to £2.2 million with sales down nine per cent to £27.5 million, due to loss of business from Rover's engine making division Powertrain.
Mr Hooper said: "The collapse of MG Rover was not a surprise, but it still affected us. Powertrain was a big customer for us. We lost about £1.5million in sales, and have had to write down £1 million from our profits because of tooling and lost stock."
Rising raw material and energy costs also affected the precision engineering business, together adding an extra £750,000 to its costs during the year, said Mr Hooper.
Alumasc, which is based in Kettering, also made a number of disposals during the year.
It sold Bissel, its spring pin manufacturing operation in Halesowen in January while it was currently considering offers for its Copel Castings factory in Handsworth.
Both moves were part of Alumasc's move away from commodities, which were facing increased competition from the Far East.
It was now moving into more niche markets and value in the automotive sector, including working with Aston Martin and JCB on its new diesel engine.
Mr Hooper said: "We have got good engineering knowledge and have decided it would not be in our best interests to become involved in long production rungs. Plus some of the diesel manufacturers perhaps did not get the attention from the suppliers they deserved in the past."
Other Midland holdings include Brock Metal at Norton Canes, which manufactures zinc and aluminium alloys.
Mr Hooper said the factory, which employs 65, was profitable but was suffering from competition and energy costs.