Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

As all eyes fixed on one new female FTSE 100 boss at GlaxoSmithKline, another -- Veronique Laury -- was unveiling earnings at Kingfisher. The British home improvement chain reported first-half profit that beat estimates, thanks largely to the U.K. where builders and barbecues boosted sales.

Laury, CEO for almost two years, unveiled a pleasant surprise for investors; some elements of her five-year turnaround plan were delivered sooner and cheaper than expected. Net cash doubled to 898 million pounds ($1.2 billion), underlining the strength of Kingfisher's balance sheet.

But let's not get carried away. Laury's made a decent start. But much of her work is yet to come. The "One Kingfisher" transformation plan -- aiming for a 500 million pound profit increase in five years -- is in its infancy. Laury says the strategy will intensify over the next financial year, as Kingfisher tries to introduce more ranges common to its different store chains. Buying centrally can bring big savings.

Home Improvement Needed
Kingfisher's underlying pre-tax profit has flatlined over the past five years
Source: Company Data

For now, just 4 percent of products are sourced this way. That will rise to about 20 percent in the next financial year, Kingfisher promises. That means more clearance of old stock, and more pressure on Kingfisher's logistics capabilities and supply chain.

Laury might just pull it off, but previous efforts by Kingfisher managers to do similar have come to naught. Investors will remember a string of past initiatives, long on management buzzwords but short on progress.

And her task will be made more difficult by things outside her control. Kingfisher faces competition on its home turf from new rival Bunnings, which bought Homebase earlier this year. It's also being squeezed on price by British discount rivals such as Poundland and B&M, who want a slice of its gardening and home sales.

Meanwhile, Kingfisher could be vulnerable to Brexit fall-out. Big ticket items such as kitchens will be less popular if consumer confidence tumbles. Laury's focus on trade business could be vulnerable if housing and construction markets slow. And the French business remains a challenge.

Like other retailers, Kingfisher also faces higher sourcing costs next year, thanks to the slump in the pound. It pays for 15-20 percent of the products it buys directly in dollars. There are currency benefits too: it makes about half of its sales outside the U.K. Indeed, it had a 17 million pound benefit from foreign exchange in the first half. But sourcing is a risk, particularly in a price competitive market.

Brexit Hedge
With half of sales outside the U.K. Kingfisher has some protection against higher sourcing costs
Source: Bloomberg

Shares in Kingfisher have risen 14 percent since Laury unveiled her strategic blueprint in January. They've more than recovered from a post-Brexit hammering to trade on a forward price earnings ratio of 15.5 times, a healthy premium to rivals. Investors believe Laury will deliver. But her plan needs to hold together

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Andrea Felsted in London at

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