Losses at Styles & Wood have almost doubled to £1.81m for the year ending 31 December 2009.
The fit-out firm posted a pre-tax loss of £950,000 during 2008.
It blamed “a number of its retail customers dramatically reducing their capital expenditure programmes due to uncertain retail and economic conditions.”
Styles & Wood also suffered a 43% drop in turnover to £139m, compared to £243m in the previous year.
Staff numbers have dropped from 421 in 2007 to just 263 by the end of 2009.
However, the firm's underlying profit rose to £700,000 (2008: £200,000), and gross margin increased to 6.4% (2008: 4.3%).
Styles & Wood's balance sheet has improved after rasing £12.2m of new equity raised through a placing and open offer, and agreement of a new £10.9m banking facility.
The firm finished the year with net cash of £8.4m, compared to a £17m debt at the end of 2008.
Styles & Wood group chief executive Ivan McKeever said: “2009 was an extremely challenging year for the construction industry as a whole and inevitably the unprecedented market conditions had a significant impact on the Group’s revenue.
However, despite this fall in revenue we are pleased to report an improved underlying profit before tax. Following a major refinancing exercise we are pleased to have exited 2009 with a strong balance sheet and a much more efficient business, as reflected by the improved gross margin.”
He added: “”We believe that 2010 will be equally challenging, with tough market conditions persisting throughout the year, but we are confident that the business is well positioned to benefit both in these challenging conditions and in the upturn.”