(Fixes typographical error in fifth paragraph)
* Cautious about impact of Brexit, French elections
* Says UK trade holding up, France underperforming
* 2016-17 profit up 8.3 pct, ahead of forecasts
* Says five-year plan on track
* Shares fall up to 6 pct
By James Davey
LONDON, March 22 Home improvement retailer
Kingfisher warned that the effect of the Brexit vote and
potential disruption from the French election could hit trade in
its two main markets, sending its shares sharply lower on
The firm said that while demand in Britain, where it trades
as B&Q and Screwfix, was holding up, it continued to
underperform in France, where it operates as Castorama and Brico
"Looking forward, the EU referendum has created uncertainty
for the UK economic outlook and we remain cautious on the
outlook for France, especially in light of the forthcoming
presidential elections," said CEO Véronique Laury in the
company's annual earnings statement.
France will elect a new president in a two-stage contest to
be held in April and May.
Laury's caution pushed Kingfisher shares almost 6 percent
lower, the worst performer on the FTSE 100 index, even though
the company beat forecasts for 2016-17 profit and said a five
year plan to restructure the business was on track after its
"We remain sellers on the basis of the challenges posed by
the static nature of the UK and French markets, likely impacts
of channel switch on market leaders as digital evolves and the
sheer scale of the business risk here," said Haitong analyst
Kingfisher's finance chief Karen Witts said that despite
fears of a UK consumer slowdown after last June's Brexit vote,
the firm had not yet seen any significant change in behaviour,
pointing to lead indicators such as the number of tradesmen
buying "big ticket" power tools and work wear at Screwfix.
"That’s all holding up very well," she told reporters.
However, chief executive Laury said the firm had to do more
to make its French businesses more competitive.
Last year she detailed a strategy to boost Kingfisher's
annual profit by 500 million pounds ($623 million) from 2021
that will cost 800 million pounds over five years to deliver.
The plan involves unifying product ranges across the
business, improving e-commerce capabilities and driving
Laury was relaxed about the prospect of increased
competition in the UK from rival Homebase, now owned by
"It doesn’t change our plan at all...It’s stimulating to
have a strong competitor in front of you," she said.
Kingfisher also wants to return 600 million pounds to
shareholders over three years through share buybacks. So far 200
million pounds has been returned.
The firm reported a 8.3 percent rise in adjusted pretax
profit to 743 million pounds in the year to Jan. 31, partly
helped by favourable currency movements.
Total adjusted sales were up 1.7 percent on a constant
currency basis to 11.2 billion pounds, with the UK & Ireland up
2.4 percent but France down 1.4 percent.
Kingfisher also said on Wednesday that Chairman Daniel
Bernard will step down in June after eight years in the role and
be succeeded by Andy Cosslett, who joins as a non-executive
director next month.
Cosslett is a former executive of Unilever, Cadbury
Schweppes and InterContinental Hotels.
($1 = 0.8024 pounds)
(Editing by Kate Holton/Keith Weir)