Latest results show that the building business fell deeper into the red last year running up losses of £7m after a £1.6m loss the year before.
Pressure on margins at the business saw group profits fall by nearly a quarter to £15.3m on turnover marginally down at £1bn.
The tightening market saw average group operating margins fall to just 1% from 2.2% in 2011.
During the year the business streamlined its operations from eight to five divisions, with building simplified from four regions to just north and south.
John Stanion, chief executive, said the move away from the small projects would allow the firm to concentrate on larger, more complex jobs with better margins.
“By concentrating more time and resources on fewer bids, we aim to increase the average value of the projects we undertake,” said Stanion.
He said operating margins were hit hardest in the south as a result of tough competition, supply chain insolvencies and long lead times.
In the north west and north east where Vinci had previously focused on health and education projects, the firm is developing its relationships with private sector clients.
The Taylor Woodrow civil engineering business performed well with rail work remaining a mainstay of the business.
Stanion said the firm would also chase several opportunities associated with the development of port facilities this year and beyond.
Taylor Woodrow also re-entered the highways sector with the start of the Bexhill-Hastings bypass and hopes to secure further road contracts in future.
Despite the fall in profits Stanion saw his pay and benefits package rise 9% to £520,000.
- Building: Turnover £599m, loss £6.6m
- Civil engineering: Turnover £242m, profit £11.7m
- Facilities: Turnover 245m, profits £7m