DAVID McLean's contracting arm is on course to return to the black after a reorganisation by new managing director Mike Wickham slashed the trading deficit in 2006.
Provisional results for the year to June 2006 show losses narrowing to just £400,000 from £2 million in the previous year after turning over £136 million - up from £92.2 million.
Mr Wickham said: 'What we're looking to see this year is a push back into profit on the main contracting side.'
McLean made a £1.4 million profit on retail work in 2006 and £200,000 on its £7 million-turnover small works arm but took a £2 million hit on main contracting, which turned over £69 million.
These losses - the first at the division since 1972 - were due to work for student accommodation providers Domain and Unite and a £15 million high-rise housing scheme for developer Albany Assets.
A legal case is being pursued against Albany but Mr Wickham, who replaced Ken Dalton last October after he left by mutual consent, stressed this was a one-off and said he was steering the main contracting business to a more general approach.
He added: 'We became very focused on just two areas of work - student accommodation and high-rise residential.
'A year ago we discovered the need to write down on these losses and realised we needed a greater focus on customer care and getting the job finished.'
In addition to these changes, Mr Wickham has produced annual savings of £1.3 million by merging backroom teams.
No jobs were lost.
This financial year McLean's main contracting operation is expected to turn over £80 million, with a £70 million workload predicted at the retail operation and turnover flat at the small works business.