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* Thierry Garnier starts as CEO on Sept. 25
* Will have "free hand" on strategy
* Kingfisher in fourth year of five year plan
* First half underlying pretax profit down 6.4%
* Shares down 2.7% at 0942 GMT, FTSE 100's biggest faller
(Recasts, adds detail, chairman comments, shares)
By James Davey
LONDON, Sept 18 (Reuters) - Britain's Kingfisher
will give its new chief executive free rein to pursue whatever
strategy he decides, even a possible break-up of the home
improvement retailer, which has struggled to lift its earnings.
Carrefour veteran Thierry Garnier is due to succeed
Véronique Laury as CEO of Kingfisher, whose main businesses are
B&Q and Screwfix in Britain and Castorama and Brico Depot in
France, on Sept. 25.
"There’s no handcuffs on Thierry's arrival into the company,
he’ll take his own independent view of all moving parts of the
business," chairman Andy Cosslett told reporters when asked
about the possibility of breaking up the group.
Kingfisher is in the fourth year of a five-year programme
that was designed to boost earnings. However, profits reversed
in 2018-19 and the group said in March it would part company
with Laury, who has been its CEO since 2014.
Although Cosslett said the board was not "iron clad" on
Kingfisher's current structure, it believed "that the current
composition of the group" gave it the scale it needed.
Kingfisher, which trades from more than 1,300 stores in 10
countries across Europe, including Poland and Romania, said in
November last year that it would pull out of Russia, Spain and
Portugal.
A 6.4% fall in first half profit at Kingfisher underlined
the task Garnier faces, particularly in France, where
like-for-like sales fell 4.4%, and at B&Q, where they were down
3.2%.
Laury's strategy, costing 800 million pounds over five
years, involves unifying product ranges across brands, boosting
e-commerce and seeking efficiency savings.
VULNERABLE
Kingfisher shares were down 2.7% at 0943 GMT, extending
losses for the year to 26% which some analysts believe makes it
vulnerable to a possible private equity bid.
"We’re not happy where the share price is but we think
through our own efforts we can get that moving quite quickly
once we start delivering better performance through execution,”
Cosslett said.
Kingfisher said it made an underlying pretax profit of 353
million pounds in the six months to July 31.
While ahead of analysts' average forecast of 342 million
pounds, it was down from 377 million pounds made in the same
period last year.
Total sales fell 0.9% on a constant currency basis to 6
billion pounds. Like-for-like sales were down 1.8%, with growth
in Screwfix, Poland and Romania offset by B&Q and France.
Kingfisher said its outlook by geography remained mixed,
highlighting continued uncertainty around UK consumer demand
ahead of Britain's planned European Union exit.
"For bigger ticket items I think there’s a great deal of
uncertainty and anxiety about what the future immediately
holds," said the chairman.
Kingfisher maintained its forecast for a flat gross margin
for the full 2019-20 year.
Prior to Wednesday's update analysts were on average
forecasting a 2019-20 underlying pretax profit of 658 million
pounds, down from 693 million pounds made in 2018-19.
(Reporting by James Davey
Editing by Shri Navaratnam, Kate Holton and Alexander Smith)
