David McLean, the Flintshire-based contractor and developer, blamed two blighted contract jobs in Liverpool for its £4.9m loss in the year to July 2007.
McLean reported turnover of £253.6m, from £277.4m in 2006, when profits were £5.1m.
The biggest loss was due to the collapse into administration of the residential conversion by Albany Assets of the Albany Building on Old Hall Street.
Frank Reil, group managing director of McLean, said the liquidation, which came about acrimoniously with both parties taking each other to court, cost the latter in excess of its total losses for the year, £4.9m, but Reil refused to say exactly how much the hit was worth.
McLean was also forced to close down a residential site for Iliad Group for six months at Elysian Fields, in the Ropewalks area of Liverpool city centre, after a fatal accident in January 2007 when a crane collapsed on a Polish worker.
Reil said the Health & Safety Executive was not pursuing David McLean over the death and that all the proper safety systems had been in place. He added that a coroner's report had still not been published.
Despite conceding that all three areas of the group's activities – contract, development and housebuilding – were suffering due to the financial turmoil rocking the market, the business would return to profitability this year.
"We are expecting to make a profit this financial year but we have had to suffer some pain at the same time." Reil added.
The main profit maker in the group is the homes division, which is most active in the North West, but also builds in West Midlands, South West and South Wales.
Several developments had been put on hold including the residential towers at the south of Kings Dock next to the Arena and Convention Centre Liverpool.
The firm cut 100 staff from its workforce last year, bringing the total to less than 500, and made a further 50 cuts in January 2008. Reil said no further job losses were imminent but the market would dictate staff levels.
Reil said a decision was due by July from the Government on the public inquiry held into the controversial redevelopment of the Garden Festival site in Liverpool with joint venture partner Langtree. Environmental campaigners have argued that the scale of development – residential on the car park and former entrance hall but otherwise largely parkland – is too great for the overgown site.
The accounts also revealed that the highest paid director took a pay cut of more than half his salary from over £1m to £475,000.