The privately-owned firm said stagnant economic activity was having an effect on construction and healthcare markets and it expects conditions to remain “in their current depressed state” for the foreseeable future.
But the group said it was well placed to trade through the difficulties and take advantage of opportunities that may present themselves.
James Walker started out as a family-run timber trader in Inverness in 1863 and grew across the UK before diversifying into property and healthcare in recent decades.
In accounts for the year to 31 March, 2011, the Bo’ness-based company said turnover had dropped to £118.8m, down from £125.3m in the previous 12 months.
It said it had undertaken “significant re-organisation and rationalisation” of its operations and was continuing to review the business.
Group staff costs fell from £24.1m to £15.7m, although the average number of employees dropped by just six to 602.
In their report, the company’s directors said the principal risks it faced were from the wider economy and the danger of creditors not paying. But they said the financial strength of the healthcare business protected the group, while monitoring of creditors and credit insurance kept risks to a minimum.