Last checked at 
* FY underlying pretax profit 744 mln stg, up 4.1 pct
* Forecasts were in 738 mln-748 mln range
* To return 200 mln stg to shareholders in 2014-15 year
* Sells Hornbach stake for 195 mln stg
* Shares up 5.7 pct, hit highest in 14 years (Recasts, adds CEO, analyst comment, shares)
By James Davey
LONDON, March 25 (Reuters) - Kingfisher, Europe'sNo. 1 home improvement retailer, set out plans for amulti-million pound programme of extra rewards for shareholders,underscoring the strength of its recent performance and helpinglift its shares to a 14-year high.
The group, which runs market leader B&Q in Britain andtrades as Castorama and Brico Depot in France, has offset weakdemand in many markets with a scheme tagged "creating theleader", designed to improve profitability by measures such asbuying more goods centrally and directly from places like China.
In the first return of capital to investors in its 32-yearhistory, Kingfisher said it plans a multi-year programmestarting with a 200 million pounds handout in its currentfinancial year through January 2015.
"When we say multi-year, it's more than one and less thanfive," Chief Executive Ian Cheshire told reporters. He said themechanism of return could vary between share buybacks, specialdividends and the issue of different class shares. An overalltarget for the programme had not been set.
The company, which said it was well placed to benefit from apick-up in consumer spending as Europe's economies return togrowth, ended its financial year with net cash of 238 millionpounds, even before taking account of the 195 million raisedfrom the disposal of its 21.2 percent stake in Germany'sHornbach, also announced on Tuesday.
Kingfisher said that after a tough first quarter, tradingconditions improved through the year, with the exception of apersistent weak economic backdrop in France, its most profitablemarket. It won market share in France, the UK and Poland.
The group, No.3 in the world by sales behind U.S. groupsLowe's and Home Depot, met forecasts with a 4.1percent rise in yearly profit before tax and one-off items to744 million pounds ($1.2 billion). Analyst forecasts had been ina range of between 738 million and 748 million.
BIG MARKET
In addition to the Hornbach disposal, the group also set outa batch of other international measures, including a search fora local strategic partner for its lossmaking B&Q China business,aiming to replicate a partner approach it adopted in Turkey.
It said it would target expansion in Germany through itsScrewfix business. It plans to open four outlets in Germany inthe current year and will offer full next-day national delivery.
"If you take the fact that we've got over 350 (Screwfixoutlets) in the UK and Germany is at least twice the size,you've got a very big market," said Cheshire.
Combined with an entry into Portugal with two Brico Dépôtstores, the combined investment impact on 2014-15 profit wouldbe a net charge of around 10 million pounds.
B&Q China, which trades from 39 stores, made a loss of 6million pounds in 2013-14. "We believe there is a long-term homeimprovement market in China which is going to be very big," saidthe CEO, adding that potential local partners had alreadyexpressed interest.
Cheshire said the group's view of how fast it will developin Russia, which contributes 5 percent of group sales, would beinfluenced by further economic sanctions, trade and currencyissues, but added: "The long-term prognosis for the Russianretail sector still remains very strong."
Kingfisher shares, up 41 percent over the last year, were up5.7 percent at 430p by 1018 GMT, valuing the business at 10.2billion pounds. The stock rose as high as 436.8p, its highestsince late 2000.
Total group sales rose 3.5 percent on a constant currencybasis to 11.1 billion pounds. Sales at stores open over a yearrose 0.7 percent.
The company said it would pay a year-end dividend of 6.78pper share, taking its full-year total to 9.9p, up 4.7 percent. ($1 = 0.6065 British Pounds) (Editing by Paul Sandle and David Holmes)
