Styles & Wood boss Tony Lenehan said the firm was hit by intense competition and the 8% reduction in construction activity.
The group’s revenues by comparison held steady at £40m, with about half coming from the banking sector.
Restructuring costs of around £200,000 and a loss on its joint venture in Dubai contributed to the poor performance.
But Lenehan said Styles & Wood was now on course to return to profit in the second half of the year after significant investment in diversifying and reorganising the management structure.
“We have seen some improvement in our market over the last two months. Our current order book position for 2013 delivery is in line with the same point in 2012.
“While order intake slowed in the first half of the year, recent conversion levels are now consistent with prior year and the volume of opportunities is increasing.”
The fit-out firm saw a fourfold increase in revenue from the commercial sector with delivery of four major refurbishment projects for commercial landlords.
Several refurbishment projects for Lidl have led to two further awards and a new build store to be started this year.
Lenehan added that strategic investment in the firm’s renewables business delivered a position on a framework with Freetricity Plc for the installation of solar panels on private residential dwellings.