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Plumbing and building supplies group Wolseley reported first-half pre-tax profit down 72% to £233 million due to losses at its US building materials business Stock.

Stock reported a loss of £44 million compared to £42 million profit last time, arising from the continuing slowdown in US new residential construction. Wolseley shares were off 33.3p, or 6%, at 499 pence in early trade on Monday.

Wolseley said the results reflect increasingly difficult trading conditions across many businesses and the continuing action to 'significantly' reduce its cost base and maximise cash flow.

'The first six months have been very challenging,' said chief executive Chip Hornsby. 'Conditions have continued to weaken since our January update and are increasingly difficult, particularly in the US.'

The chief executive said Stock had suffered due to the slowdown in the new residential market but Ferguson, its US plumbing and heating business, had performed well and the US non-residential sector remained resilient.

Group revenue was up 2% at £8 billion, while trading margin fell from 5% to 3.7%, primarily due to the loss recorded by Stock.

Wolseley noted that a variety of management actions have been taken to adjust the group's cost base in response to the deteriorating market conditions. The company has reduced headcount, which represents around 60% of its cost base, by 10,000 over the last 18 months.

Of the job losses, 4,000 were lost in the last six months, leading to expected annualised savings of £64 million. Interim dividend, which is expected to be around a third of the full-year dividend, was up 3.7% to 11.25 pence, while underlying EPS was down 31.1% to 26.69 pence.