The US housing market crash has wiped off nearly a third of group profit for building materials group Wolseley in the last five months of 2007.

Shares in the support services group fell 10% in early trade on Monday after warning that market conditions were 'likely to deteriorate further'. It is facing weaker consumer confidence, credit restrictions and a weak US dollar.

The company, whose activities include plumbing and heating products, earns more than half of its estimated £16 billion sales in North America. In the five month trading period, US profits fell by 40%.

In the UK, revenue increased 3% and profit up by 1%. Gains were also seen in Switzerland, the Netherlands and the Nordic region, although these were offset by lower profits in France, Austria and Italy.

Chip Hornsby, Group Chief Executive of Wolseley, said: 'We have acted decisively and rapidly in response to the challenging market conditions to take cost out of the Group and will continue to do so.

'We remain committed to our strategy and are confident that with our size, scale, financial strength and operating efficiencies, we will emerge from this slowdown as a stronger Group with an excellent platform for future growth.'

Wolseley has seen its share price more than halve since mid 2007. 'Bad conditions in the US were to be expected, but a materially weaker situation in Europe (partially through management actions) and sign that the second half will be worse is unlikely to inspire confidence,' said Numis analyst Howard Seymour.

The stockbroker has cut its full-year earnings forecast for Wolseley from £820 million to £500 million, on the expectation that the second half will see a 35% decline in pre-tax profit.