David Backhouse, the company's new chairman, said the drop in profits was largely caused by the absence of a pounds 1m one-off income received last time from the refurbishment of properties it manages.
A further cause of the profits decline was the pounds 500,000 spent launching Healthsave, Johnson Fry's new initiative in private medical insurance.
Mr Backhouse said: "The group is engaged in a programme of investment in new products and services, some of which are unlikely to produce immediate profits. However the basic business is growing in strength and I am confident that our first year results will be exceeded in the second half of this year."
As a token of his confidence, Johnson Fry declared a 2p interim share dividend, compared with nothing at half-time last year. At the close, the share price was up 2p to 122.
Johnson Fry's results follow a restructuring of the group over the past few months, dividing its functions into three clear areas.
Until now, the company has been known for its launches ofspecialist financial products, particularly a range of Business Expansion Schemes which concentrated primarily on residential property.
Charles Fry, the company's chief executive, said the company had carried out a survey of how it had been perceived which revealed confusion about what the company did; Johnson Fry now wanted to be known as an asset management company. Mr Backhouse's appointment as chairman in May was a sign of this business realignment.
The largest division, in terms of assets under management, is housing management. The 22,000 properties Johnson Fry manages, worth pounds 900m, are the legacy of the BES boom of the 1980s. On the back of this, the company aims to develop in related areas, including building and design services, arrears counselling, checking gas systems and managing estates for local authorities.
Mr Fry said that the company was using its expertise not only to service its own property management division, but to service outside organisations - including councils and building societies.
Johnson Fry remains active in more traditional fund management, looking after some pounds 300m of funds, including a pounds 100m-plus private client portfolio.
Among the products now being marketed through independent financial advisers are some enterprise zone trusts, some personal equity plans, plus a stagging service in French privatisations and regular auctions in second-hand endowment policies.
However, the company has dramatically pruned its own IFA arm, cutting the number of its sales staff from almost 70 to barely 20 in the past 12 months.