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Building supplies company Wolseley warned today that some of its markets had still not hit the bottom as first-quarter profits slumped by half.

The firm expects commercial and industrial markets to “continue to deteriorate further in the short term” despite signs of stabilisation in its housing and maintenance business.

The London-listed firm said pre-tax profits from continuing businesses fell 50 per cent to £75 million in the three months to October 31st on a constant currency basis.

Wolseley also incurred a further £10 million in restructuring costs across the group — which saw another 500 job losses on top of the 10,000 shed during the previous year. The cuts fell mainly in the US.

In the UK and Ireland, revenues slid by around 13 per cent although profits rose 17 per cent due to the impact of earlier cost-cutting actions.

Wolseley owns Brooks, Heat Merchants, Tubs Tiles and Electric Merchants and operates about 100 stores across Ireland.

The company noted “increasing signs” of steadying residential and maintenance work while commercial and industrial markets are declining at a lower rate amid a fierce battle for work.

“Trading profit in the commercial and industrial division continues to be affected by aggressive price competition and competitive tendering,” the group said.

The firm said revenues were down 20 per cent during the three months with margins squeezed by the tough market conditions.

Elsewhere US revenues slid 24 per cent at constant currency with Canadian markets also suffering. In Europe, its Nordic operations posted a 19 per cent revenue fall, with France down 17 per cent.

Seymour Pierce analyst Kevin Lapwood said of the firm’s fall in profit: “This is in-line with our expectations and there is little sign of the situation improving.”

Wolseley posted a pre-tax loss of £766 million for the year to July 31st after more than £1 billion in write-downs and restructuring costs.

Shares in the company fell 2 per cent as chief executive Ian Meakins said: “The overall trading environment continues to be extremely tough.”