Construction services firm NG Bailey saw sales plummet from a historic 600m to 464m and predicted volumes would stay flat for at least the next two years.
The Ilkley-based company however swung back into the black with an "excellent" pre-tax profit of 19.9m, against a loss of 10.8m in 2009. This was helped by the handing over of several large-scale projects and improved fortunes in its investment portfolio.
Nimble Thompson, chairman of NG Bailey, said: "Although the results are extremely pleasing, this level of profit is unlikely to be repeated in the near future and indeed we approach the market with caution, as the recession continues to bite."
In the year ending February 2010, the group completed the BBC's Media City at Salford Quays, a flagship PFI hospital project in Merseyside and several commercial developments in central London.
NG Bailey's investment portfolio benefited from improvements in global financial markets and contributed a 6.7m profit to the balance sheet as opposed to a 6.7m loss the previous year.
The group also took the decision to close its final salary pension scheme, despite substantially reducing its liability from more than 20m to less than 4m.
Mr Thompson said: "The long-term volatility of the scheme presented us with too big a risk to the business and our employees to allow it to continue."
NG Bailey slashed its workforce by seven per cent over the year. The period also saw the departure of chief executive Mark Andrews, which was announced last October in a short statement. The company has since appointed David Hurcomb, a former Carillion director, as its new CEO.
Mr Thompson said: "The end of the year saw a change of leadership and I would like to take this opportunity to thank Mark Andrews for his contribution. We gained much from his vision, enthusiasm and development of our Life in Building strategy."
He added that Mr Hurcomb's "wealth of relevant experience... will benefit the group immensely".
Chris Newton, the acting CEO who will revert to chief financial officer next month, warned that the construction industry faces turbulent times ahead.
"Much work still needs to be done to achieve the kind of order book we would wish for in the years to come, but our position in the marketplace gives us the perfect opportunity to rise to the challenge," he said.
Paul Cogan, the acting CFO, said last year's financial performance was affected by a significant reduction in private sector spending, which was offset in part by some growth in the public sector, although competition for these contracts has been intense.
In contrast, public sector spending, as the coalition government has outlined, is now in line for major cutbacks.
Mr Cogan said: "We are fortunate that our core businesses have secured more than 80 per cent of their turnover for 2010-11 and while this puts NG Bailey in a strong position, the existence of fewer large projects and continued downwards pressure on gross margins will inevitably have an adverse impact on our profitability in the coming year."
KEEPING IT IN THE FAMILY
Noel Grimshaw Bailey founded the company in 1921. Eighty-nine years later, NG Bailey is perhaps the biggest family-owned company in Yorkshire.
The group of specialist mechanical, electrical, ICT, maintenance and building management companies is still owned by the Bailey family and Martin, Edward and Cal Bailey are directors on the board.
Cal Bailey, grandson of NG Bailey and the group's sustainability director, said: "Speaking on behalf of the family I would say that we are delighted with the results, but continue to operate with an air of caution, in what is a challenging environment.
"I'd also like to thank our (3,300] employees for their commitment and dedication to our business."