The fit-out and property services company posted a decrease in its pre-tax losses to £1.2m, from £2m in 2013.
In its interim results for the six month period ending 30 June 2014, the group announced a turnover of £33.6m, down from £40.4m in the same period in 2013.
However Styles & Wood remained confident about results in the future, attributing the gradual narrowing of its losses to "a changing business mix and management focus on margin improvement".
The group said that workload was heavily weighted towards the second half of the year, so predicted a recovery in revenues greater than that seen in previous years for the fourth quarter.
Styles & Wood's order book for the first half of 2014 was £57.2m, compared to £50m in 2013. The company cited significant project wins such as the £5m refit of the Royal Northern College of Music in Manchester, and the £9m refurbishment of Lancaster University Library, as evidence that its diversification strategy was proving successful.
Styles & Wood has been retained as the programme and delivery manager for an ATM rebrand roll out for a high street bank, and said that it has seen an increase in demand from food retailers with pipeline projects for Lidl, Waitrose and Tesco.
Tony Lenehan, chief executive of Styles & Wood, said: "There are increasing levels of activity and confidence in the sectors in which we operate which have begun to translate into a number of significant contract wins, as well as a growing order book as we move into the second half.
"Our improved performance endorses management's strategy of diversifying the group's product mix to focus on the needs of our clients. We now have an improving pipeline of new business opportunities and are able to differentiate our refurbishment and fit out offers through the integration of other service lines including space planning and management systems.
"We have identified a number of growth opportunities across key sectors and believe the Group is now right sized and well positioned to take advantage of the growing confidence in our core markets."
Styles 7 Wood has offices in Manchester and Lancaster, alongside London and Nottingham.
Shares in Styles & Wood were up by 4p to 91.5p this morning.