Banking clients RBS, Lloyds, HSBC and Barclays all pushed planned work back into the next financial year while food retailers cancelled work leading to a drop in order books and pressure on profits and margins.
ISG revealed its half year results to December 31 2011 which show pre-tax profit down to £1.8m from £4.5m last time on turnover steady at £623m.
Growth in international markets helped to off-set problems in the UK and ISG now generates 27% of operating profits from overseas.
Chief executive David Lawther said: “Our market leadership in the corporate office fit out, food retail and retail fit out sectors continues to deliver repeat business and a reliable order book, which will enable us to benefit from any upturn particularly in the UK.
“The slowdown in the UK retail sector has affected our short term expectations of our retail business.”
Operating profits in the UK construction division during the period fell to £100,000 from £2m on turnover down to £227m from £237m as an ongoing contract row in the south west dragged-down results.