Plumbing giant Wolseley has seen a sharp fall in half yearly trading profits in the wake of "increasingly difficult trading conditions".
Group trading profits fell to £300m for the six months to 31 January 2008, down from £390m in the same period a year earlier - representing a 23% drop.
Wolseley relies heavily on sales in the US and predicts further deterioration in the housing market there.
The company blamed its profit fall on rising stocks of unsold goods.
The firm said it would focus on increasing cash flow, reducing costs and growing market share.
"The board expects business conditions in a number of the group's markets to become more challenging," it said.
"The US housing market is likely to deteriorate further and put additional pressure on the repair, maintenance and improvement market."
But it said recent operational improvements in the UK were starting to deliver benefits, with underlying improvements in the UK in trading profit "despite a slowing market".
Wolseley has already cut 3,000 jobs in the US recently and the company's chief executive has warned of further cost cuts, given the slowdown.
Shares in the firm ended the day down 9.2% at 483p.
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