While 1H results were in-line with expectations, we felt there was a concerning shortfall in UK profits versus our expectations, made up for by better French and Polish profits. UK retail profits fell 41% YoY, against tough comps and a return to a more normalised promotional environment, with France flat, benefiting from ‘fixing’ its supply chain operational issue. Poland profits were up 57% (+66% at const FX) with a strong recovery from COVID post last year’s closure and market share gains as Polish consumers boycott Leroy Merlin given its stance on its Russian stores. Management’s FY23 PBT guidance range was refined to £730m-£770m (prev £770m), which considers the potential for a more uncertain macroeconomic environment into year end. Management stated that performance YTD is currently consistent with FY23 PBT of c.£770m. On a 3-year basis versus pre-pandemic levels, Q3 LFL sales (to 17th September) were +15.2%, versus +16.6% in 1H (adjusting for calendar impact, Q2 3 year LFL +17.4%: Q1 +14.8%). We cut FY24E PBT by 12.7% reflecting a more cautious view on consumer demand in the UK and higher investment in establishing Screwfix France, partially offset by higher Polish profits. FY24E EPS fall by 9% as we also adjusted for the UK Government’s announcement that it is maintaining the Corporation Tax rate at 19% rather than raising it to 25%. We are now assuming 22% for FY24/FY25E, though it will depend on the mix of profits (tax rate: 19% UK; 26% France; 19% Poland). Valuation (CY23E PE 8.7x) is not that demanding. Kingfisher is in a robust financial position, given its strong balance sheet, to ride out short term economic pressures. However, we believe the shares are unlikely to perform until investors are prepared to look through the inflationary pressures and higher interest rates ahead. Our TP falls to 240p (prev 260p), reflecting the downgrade. HOLD.