Kingfisher wary on France as profit edges higher

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Kingfisher, Europe’s largest home improvement retailer, beat forecasts with a 0.3 percent rise in annual profit, though it said it remained cautious on the outlook for France, its most profitable market.
The firm, which trades as B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, said on Wednesday it made an underlying pretax profit of 686 million pounds ($972 million) in the year to Jan. 31.
That compares with analysts’ average forecast of 667 million pounds and 684 million pounds made in the 2014-15 year.
Group sales rose 3.8 percent on a constant currency basis to 10.3 billion pounds, with sales in France up 1.2 percent and sales in the UK and Ireland up 5.6 percent.
“In the short term, the fundamentals of the UK economic backdrop remain positive, although we remain cautious on the outlook for France,” Chief Financial Officer Karen Witts said.
“The outlook for the wider global economy remains uncertain, and the impact of the outcome of the UK EU referendum is unknown.”
In January, Chief Executive Véronique Laury announced a strategy to boost annual profit by 500 million pounds from 2021 that will cost 800 million pounds over five years to deliver.
She said the firm would return 600 million pounds to shareholders over the next three years through share buybacks.
Her plans include improving its e-commerce capabilities and improving efficiency.
Shares in Kingfisher have risen by 7 percent over the last three months but are down 6 percent year on year. They closed at 352.5 pence on Tuesday, valuing the business at about 8 billion pounds.
Kingfisher’s sales in the year ended January 31, 2016 were around £10.3 billion with adjusted pre-tax profits of £686 million.
It operates over 1,100 stores and growing omni-channel operations across 10 countries in Europe, Russia and Turkey and employs 74,000 people and nearly six million customers shop in the stores and through websites every week.

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