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In its annual results, announced on Tuesday, the group said pre-tax profit had fallen from 拢634m to 拢145m in the year ending 31 July 2007. It said its British and Irish divisions had experienced tougher trading than the rest of Europe. Operating profit across the region fell 1.2% from 拢433m to 拢428m, although turnover was up by 13% from 拢7.6bn to 拢8.5bn.

The company is heavily exposed to the US housebuilding market and its fortunes have been severely affected by the American downturn.

Turnover, however, rose 2% overall from 拢16.2bn to 拢16.5bn owing to 鈥渁ggressive cost cutting鈥� over the year. During that time, Wolseley restructured its business to achieve savings of 拢47m, but at the expense of 270 branches and 7,100 jobs. Since the year end, it has reduced its 74,000 headcount by a further 600.

Wolseley said: 鈥淭he group will continue to focus on the cost reduction and cash maximisation actions that are appropriate in difficult markets. We will achieve increased productivity and efficiency, with further restructuring being undertaken鈥�.

The group said there were no plans to raise equity or renegotiate its banking covenants, although they were options if market conditions deteriorated dramatically.