Wates Group finance chief Philip Wainwright said the M&E business had slipped into a loss last year after a strategic decision to move away from higher-risk markets.
This saw turnover also slip 7% year to £198m and average head count fall by 10% to 813 staff.
Wainwright said: “While this did lead to a turnover reduction in 2018 it also largely protected the business from the considerable market turmoil that was seen in the year.”
Since Wates bought the M&E contractor business from Shepherd Group in October 2015, SES has only recorded a profit once in 2017 when it made £1.3m.
Wainwright added that SES ended the year with a cash balance of £5.7m down from £12.8m in 2017.
But he predicted that the order book of £274m would see considerable growth and a return to profit in 2019.
To strengthen the balance sheet, in March this year, directors approved the recapitalisation of the firm by £6m, to be carried out by cash injection or cancellation of intercompany debt at Wates.
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