BUZZ-Kingfisher: HSBC cuts to 'reduce', sees challenges in France

** Brokerage HSBC downgrades Kingfisher Plc to "reduce" from "hold" and cuts PT to 180p from 240p

** Says progress on transformation not enough to stop downgrades amid challenging markets and poor execution in France

** France looks structurally challenged by larger peer Leroy Merlin

** "with UK and French housing markets expected to remain subdued for the foreseeable future, and execution issues in France impacting Co's French subsidiary Castroma, we see little reason for an improvement in earnings momentum near term" says HSBC

** Castorama is increasingly structurally challenged and brokerage expects Leroy Merlin to remain a competitive headwind in France longer term

** Weakness in Castorama France and losses in Russia and Romania pulled FY pretax profit to fall 13 pct to 693 mln pounds ($914.83 mln)

** HSBC says co has seen a lot of management changes in a span of six months which is leading to increased uncertainty in execution plans and strategies ($1 = 0.7575 pounds) (aniruddha.c.thomsonreuters.com@reuters.net)