The costs of a restructuring dragged pre-tax profits at Personal Group, down 55.1 per cent to 3.7m pounds, but the benefits are expected to flow during the coming year.
The employee benefits and insurance company said 2013 was a "transformational year" as it invested in a new management team to drive growth.
Last year marked the second year in the implementation of the group's strategic plan to overhaul the business which is now complete.
Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 11% to £8.8m, reflecting higher investment in the field sales organisation and claims costs which were ahead of historic levels.
Claims costs climbed to £5.8m from £4.2m in 2012, largely as a result of the increased core Hospital Cash plan business.
Basic earnings per share fell 65.3% to 7p, despite a 4.5% jump in revenues to £28.4m driven by the Employee Benefits unit, which achieved organic growth of 6.8%.
The introduction of iPads for presentations in the fourth quarter of the previous year helped to improve efficiency and effectiveness of sales.
Earlier this month the firm acquired Lets Connect IT Solutions Limited, a provider of home technology salary sacrificing, for £12m.
The group won a number of significant contracts last year including with Network Rail, 2Sisters. Last week it secured a contract with Four Season's Healthcare.
"We did what we said we were going to do. Results were expected and we had some very big wins so we are feeling very positive about the business and its growth prospects," Finance Director John Barber told Digital Look/Sharecast.
He added that he expects to see the benefits of the restructuring come through in fiscal year 2014.
The group raised its 2013 dividend by 4.5% to 18.6p per share.
Cenkos gave the group a 'buy' rating, saying earnings exceeded its expectations.
"The combination of increasing conversion rates and a growing market through customer wins presents a strong future growth profile for the Group. Earnings are forecast to grow 17.6% in full year 2015," Cenkos said.
Lighting manufacturer Photonstar reported lower annual losses, but gross margins fell and costs rose.
Photonstar, which combines LED lights, sensors and controls in intelligent lighting for commercial and architectural uses, said it had a particularly strong second half after a difficult first six months of the year.
In the first half, the group faced challenges including a change of finance chief, continued development and improvement of its ChromaWhite colour-tuneable light technology and generally low activity in the European building industry.
However, it said things improved in the second half and it started this financial year in a much stronger financial position.
"The group looks forward to further growth as the case for LED lighting continues to strengthen, reinforced by further regulation in the market," it said.
Full-year revenues increased by 8% to £9.4m against a year ago and annual adjusted pre-tax earnings before interest, depreciation and amortisation improved to a loss of £100,000 in 2013 from a loss of £300,000 in 2012. The group's pre-tax loss for the year was £0.73m versus a loss of £0.84m in 2012.
However, gross margins slightly reduced to 38.3% from 39.5% in 2012 and non-cash costs such as depreciation, amortisation and share-based payments included in administrative expenses increased from £510,000 in 2012 to £590,000 in 2013, representing increased investment.
The company said 2014 first quarter trading matched budgets and topped the first quarter of 2013.
It expects growth to come particularly in lighting fixtures as partnerships with electronic control specialists result in more projects and as export growth rises.
Chief Executive James McKenzie said: "The group enters 2014 as a much stronger business, with a stable management team in place, reduced costs and the cash flow to support further growth."