LONDON (Reuters) - Kingfisher, Europe's second largest home improvement retailer, said on Wednesday it would exit Russia, Spain and Portugal so it can focus on markets where it has, or can reach, a market leading position.
The group, whose main businesses are B&Q and Screwfix in Britain and Castorama and Brico Depot in France, also reported a fall in underlying sales in its third quarter, with Castorama in France continuing to trade particularly poorly.
Kingfisher, which across Europe trails France's Groupe Adeo, is in the third of a five-year plan to boost annual profit by 500 million pounds ($640 million) from 2021.
"We are committed to our plan and to building a strong business for the long-term. As part of this commitment, we have taken the decision to exit Russia, Spain and Portugal," said Chief Executive Veronique Laury.
"This will allow us to apply our strategy with more focus and efficiency in our main markets."
Kingfisher's total sales rose 1.2 percent to 3.04 billion pounds in its third quarter to Oct. 31, while like-for-like sales fell 1.3 percent, reflecting a continued weak performance at Castorama France where like-for-like sales slumped 7.3 percent.
Kingfisher has a plan to improve Castorama's performance but warned "there is no quick fix".
B&Q UK & Ireland's like-for-like sales fell 2.9 percent, while Screwfix's sales on the same basis were up 4.1 percent.
Kingfisher's gross margin rose 40 basis points in the third quarter. For the full 2018-19 year it expects gross margin to grow in the UK, Poland and at Brico Depôt France.
But it said the margin outlook for Castorama France was more uncertain given difficult trading and the ongoing impact of recent national demonstrations.
($1 = 0.7811 pounds)
(Reporting by James Davey; editing by Kate Holton)
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