Wolseley has said it will save more than £20m in tax by relocating to Switzerland

The building materials giant, which generates more than 80% of its earnings outside the UK, announced the move on Monday as it unveiled pre-tax losses that had narrowed from £766m to £328m in the year to the end of July.

Net debt at the end of the period was £346m, down from £959m a year earlier. Turnover slipped to £13.2bn from £14.4bn last year.

Kevin Cammack, an analyst at Cenkos Securities, said the results were “reasonably positive” but criticised what he described as “a litany of new exceptionals, more window dressing on debt, and a cautious to non-committal outlook statement”.

Charlie Campbell at Liberum Capital was more upbeat. “The outlook for its markets is not clear but … the company is confident of increasing profits through the year,” he said.

Wolseley, which has abandoned its aggressive expansion strategy, will create a holding company called New Wolseley, which will be incorporated in Jersey with its tax residence in Switzerland. The move will reduce the group’s tax rate from 34% to 28%.

John Whybrow, Wolseley’s chairman, is to retire at the firm’s next annual meeting and will be succeeded by Gareth Davis, a former chief executive of Imperial Tobacco.

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