The materials giant reports revenue growth of 15% as it cuts costs in response to weak US market

The weakening American housing market has hit sales and profits of Wolseley’s US Building Materials business.

In a trading statement the materials supplier reported that it had implemented a significant programme of cost reduction in America in response to the slowing house market, which Wolseley said was worse than expected.

Elsewhere the group reported trading broadly in line with expectations. Revenue increased by more than 15% in the three months to 31 October 2006 including 5% of organic growth, while trading profit was up by around 9%

The group said it had benefited from improving markets in the UK and France as well as high organic growth in the US Plumbing and Heating business.

In the UK the group said that it had achieved double-digit revenue growth though margins were slightly lower as a result of slightly more aggressive price competition. The group believed that there would be a gradual improvement in the UK RMI and housing markets.