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Kingfisher Slices Dividend, Restructures China Arm

Kingfisher, Europe's biggest home-improvements retailer, reported lower annual profit as expected on Thursday and said it was slashing its full-year dividend by nearly a third.

Kingfisher, which owns UK market leader B&Q and France's Castorama, made an adjusted pretax profit of 386 million pounds ($770.9 million) in the year to Feb. 2, down from 396.6 million the year before, on retail sales up 7.9 percent at 9.4 billion.

The retailer had been expected to report profits of 387.6 million pounds, according to the average forecast of 26 analysts given to Reuters Estimates, and within a 375 to 413 million range.

Kingfisher also said it was restructuring its poorly performing Chinese B&Q business, resulting in an exceptional charge of 22 million pounds in fiscal 2008 and a further 11 million expected the year after.

The full-year dividend was cut to 7.25 pence from 10.65p last year, with the final payout slashed by 50 percent to 3.4p. It said a similar reduction was expected in the first half of the current year.

"The last year has been challenging for international retailers with increased global economic uncertainty impacting consumer confidence, particularly here in the UK," Chairman Peter Jackson said in a statement.

UK home-improvement retailers have been battling a slowdown in consumer spending, with shoppers hit by higher bills and a weakening housing market.

Last month, Kingfisher said profits would be in line with market forecasts as it reported lower fourth-quarter sales at B&Q that were partly offset by a strong performance from Castorama in France and Poland.

Shares in Kingfisher, which have underperformed the UK general retailers' index by around 18 percent in the past 12 months, closed 3.5 percent lower.