Final Results

Kenwood Appliances PLC
4 July 2000

                    KENWOOD APPLIANCES PLC
                               
    Preliminary Results for the Year ended 31st March 2000

           Strong Second Half Performance at Kenwood

£ Million
                                 1999/2000    1998/99
Sales
from
continuing
business                             143.4      145.0

Gross
Margins*
                                     36.6%      35.6%
Operating
Profit*                                5.8        4.1

Profit
before
exceptionals
& tax                                  2.9        0.1

Exceptional
items -
operating                              0.3       (1.0)
- non-operating                       (4.3)      (8.9)

(Loss)
before Tax                           (1.1)       (9.8)

Net Borrowings                        24.0        29.2
                       
Earnings/
(Loss) per
Share
before exceptionals                  3.3p       (3.0)p
after exceptionals                  (3.0)p     (24.6)p

* before exceptional charges


David Nash, Chairman said today: -

'Profit before tax and exceptionals moved strongly ahead from
£0.1m to £2.9m fuelled by a particularly robust second half
sales performance in the UK, and in a number of export
markets. Profits before tax and exceptionals in the second
half were £3.1m compared to a loss of £0.8m in 1998/99. These
results were achieved despite the adverse impact of currency
movements and on a constant currency basis, full year PBT
would have been approximately £1.5m higher.

'The restructuring programme resulted in the Group's committed
cost base being reduced by £7.6m. The associated exceptional
charges were in line with previous forecasts at £4.0m.

'Tight cash controls resulted in net borrowings reducing by a
further £5.2m to £24.0m after spending £3.5m cash on
restructuring charges.'


Colin Gordon, Chief Executive said today: -

'The benefits from the programme to transform Kenwood from a
vertically integrated manufacturing company to an agile brand
led business are now beginning to show through.

In the year to 31st March 2000: -

-    67 new products were launched, the most successful being
     the Kenwood fryers and food processors and the Ariete
     steam gun;

-    Over 20% of sales were generated by new products;

-    These new products fuelled growth in our core markets
     with, for example,  Kenwood sales in the UK, our largest
     market, increasing by 13%;

-    Despite the further strengthening of sterling, gross
     margins improved 1.0% to 36.6% as more product was
     sourced from the Far East;

-    The programme to reduce UK manufacturing content was
     implemented successfully and the number of UK employees
     fell by almost half from 691 to 361;

-    The Group is now outsourcing both its international
     warehousing and 66% of manufacturing;

-    The long-standing arbitration proceedings arising from
     the acquisition of Ariete in 1994 were finally resolved.

'Since the year-end, the 12 acre site in Havant has been sold
for £5.4m with an agreement to lease back warehousing and
refurbished office space. Net proceeds are anticipated to be
£4.5m. In addition a freehold property in Florence, Italy has
been sold for £2.0m. These two disposals were slightly above
book value and the net proceeds will be used to reduce
borrowings.

'In the absence of unforeseen circumstances, the Board
anticipates continued progress as the restructuring programme
is completed. Sales momentum has continued in the first
quarter, although there is increased pressure on margins
arising from currency and retail price deflation. The final
outcome will, of course, be dependent upon the level of
sterling relative to the Euro and the US dollar.'

For further information contact:

Colin Gordon          Kenwood Appliances plc      0239 247 6000
Simon Rigby           Citigate Dewe Rogerson      020 7638 9571
Alex Brown            Citigate Dewe Rogerson      020 7638 9571
                               
                               
FINANCIAL RESULTS

Sales were £145.4m compared to £154.1m in the previous year.
After stripping out discontinued activities, sales were
£143.4m compared to £145.0m.

The first half had been difficult in a number of markets and
sales from continuing business declined by 9%. However, the
second half recovered strongly and sales were up by 6%
compared to the previous year. Sales growth was good in the
UK, the Far East and a number of export markets.

Continuing progress was made on gross margins, which increased
to 36.6% compared to 35.6% last year, as more product was
sourced from China. Tight controls resulted in distribution
and administration costs falling by 7.6% to £47.1m. Total
fixed costs including manufacturing fell by £7.6m.

Profit before exceptionals and tax increased strongly from
£0.1m to £2.9m. In the second half profits before tax and
exceptionals were £3.1m compared to a loss of £0.8m in
1998/99.

In line with other UK exporters, the Group was hampered by the
strength of Sterling, and at constant exchange rates PBT would
have been approximately £1.5m higher.

Exceptional charges of £4.0m were booked, which was in line
with previous forecasts and, as a result, the loss after
exceptionals was £1.1m compared to a loss of £9.8m in 1998/99.
Earnings per share before exceptionals were 3.3p (loss 3.0p in
1998/99). After exceptionals losses per share were 5.4p (24.6p
in 1998/99).

Net borrowings were reduced by £5.2m to £24.0m. Despite
spending £3.5m on exceptional charges, £3.4m of cash was
generated.

The net interest charge fell from £4.0m to £3.0m. Pre-
exceptional interest cover was 2.0 times (1.0 times in
1998/99).

The Board is not recommending a dividend payment for the year
1999/2000.

TRADING REPORT

UK

Building upon a successful first half, sales of Kenwood
products rose by 13% to £41.6m. The market grew 8% and Kenwood
gained share overall.  Particularly strong performances were
recorded on deep fryers, kettles and food processors - one in
every two food processors sold in the UK last Christmas was
branded Kenwood. Margins were higher and as a result
profitability increased significantly. Kenwood is strongly
positioned as the clear brand leader in food preparation with
a market share over twice that of its nearest competitor.

Italy

Ariete achieved record profits, despite difficult conditions
in the Italian market where a number of the categories in
which Ariete is strong showed significant declines. After a
first half decline of 16%, sales in the second half were up
12% against the previous year. The strongest performance was
recorded in the export markets, which grew 26% to 47.2bn lire
(£15.4m). For the full year, sales were marginally ahead at
112.2bn lire (£36.5m). Ariete's second half sales growth was
generated by the continuing success of its new product
development programme which contributed 34% of the total sales
and the Vapori steam cleaning gun sold 146,000 units in the
first six months following its launch. Mizushi, the air
conditioning business, had a good season and as a result its
working capital declined by 13.3bn lire (£4.1m).

Overseas Subsidiaries

In Europe, turnover fell by £4.5m to £25.0m (-15%) as the
Group focused on more profitable products and sales channels.
Consequently profits increased in France and losses were
reduced in Germany. The loss making Polish sales subsidiary
was closed at the end of March 2000. Ireland, which had been
reorganised at the end of the last financial year, showed
improved sales and significantly enhanced profitability.

In the rest of the world, all the Kenwood sales companies
showed progress. Sales in aggregate were up 16% at £11.9m.
After a difficult start, the strength of the new product
programme delivered a significant profit improvement in South
Africa and the Asian subsidiaries - Malaysia, Singapore and
Hong Kong - all reported profits that were sharply higher.

Third Party Distributors

After a difficult first half in which sales declined by 21% to
£9.5m, there was a significant recovery in the second half
resulting in a sales increase of 24%. For the full year,
therefore, sales were in line with those achieved in 1998/99.
There were strong performances from a number of markets
including Greece, Belgium and the Middle East, but overall
this sector of business was impacted by the high sterling
exchange rate.

Manufacturing and Sourcing

The transformation of the Group's manufacturing facilities was
largely completed in the year. The final products were
successfully transferred to China leaving the UK to focus on
the manufacture of the Kenwood Chef and of water filter
cartridges. The number of employees in UK manufacturing fell
by two thirds to 174.

In China, from where the Group is now sourcing over half its
products, the strategic alliance with Allan International has
been developed following their acquisition of the majority of
the UK manufacturing plant and machinery.

In Italy there has been a further consolidation of
manufacturing activity following the merger of the Mizushi and
Ariete production facilities. As a result it was possible to
reduce the labour force by 17%.


KENWOOD RESTRUCTURING PROGRAMME

In 1997 a strategy was initiated to transform Kenwood from a
vertically integrated, predominantly UK manufacturing company,
into an agile brand led business. The target date for the
completion of this programme was identified as December 2000.
The Board indicated that profits would improve by £4m per year
in the first full year following the completion of the
programme.

In the year to the 31st March 2000, and particularly in the
second half, those benefits have started to materialise.

Revitalised Products

New products are the lifeblood of this business. In the year,
there were 54 new products launched under the Kenwood brand.
The most successful of these included our patented dishwasher
safe fryer and the updated food processors. A comprehensive
range of chromium finished products has also been successfully
launched.

In the core categories, the number of Kenwood Chefs sold
increased by 4%.

Ariete has a consistent track record of innovation; last year
13 new products were launched including the Vapori steam gun
which has sold 146,000 units since it was introduced in
September 1999. Sales of ironing systems and coffee makers in
Italy were encouraging with Ariete enjoying third and fourth
positions respectively in the market in these two important
categories.

Cost Reduction Programmes

Since the start of the Kenwood restructuring programme the
Group has reduced its workforce by over 40 % to 1626. In the
year to 31st March 2000, headcount was reduced by 329 and with
the closure of the UK motor winding facility during July, the
Group is a long way to delivering its target employment level
of approximately 260 staff in the UK.

In total, the fixed cost base of the Group was further reduced
by £7.6m.

Reductions in Borrowings

Borrowings fell by a further £5.2m to £24.0m having peaked at
over £50m in 1996/97.  Interest charges fell by £1.0m to
£3.0m. Interest cover is now 2.0 times compared to 1.0 times
in the last financial year.

Since the year end there have been two developments which will
impact borrowings in the current year: -

-    Two property sales have been finalised.  On 30 June the
     12 acre site in Havant in the UK was sold for £5.4m.  A
     lease back arrangement has been agreed for part of the
     site which will be comprehensively refurbished to provide
     new offices, distribution and manufacturing facilities in
     line with the current scope of the UK Group's operations.
     Net proceeds will be £4.5m.  Also in June, the former
     Ariete site in Calenzano, Florence was sold for 6.1bn
     lire (£2.0m).  The Italian operations have been
     consolidated on to the Mizushi site in Prato, Florence.
     These sales were achieved at slightly above book value
     and the proceeds will be used to reduce borrowings.
-    The litigation on the purchase price of Ariete was
     resolved resulting in a settlement of £4.5m to the
     Vendor.

Restructuring Costs

In July 1999 the Board forecast that restructuring charges of
£4.0m would be incurred in 1999/2000, with a further £1.1m in
2000/01.

Exceptional charges of £4.0m were incurred in 1999/2000 of
which £2.6m were cash items largely representing redundancy
payments. For the current year the bulk of the exceptionals
will again be for redundancies which have already been
announced.

Future Prospects

In the absence of unforeseen circumstances, the Board
anticipates continued progress as the restructuring programme
is completed. Sales momentum has continued in the first
quarter, although there is increased pressure on margins
arising from currency and retail price deflation. The final
outcome will, of course, be dependent upon the level of
sterling relative to the Euro and the US dollar.


Group Profit & Loss Account
                                                      
                               Year to                Year to
                               31 March 2000            2 Apr
                                                         1999
                         Before
                        Except-   Except-
                          ional     ional     Total     Total
                           £000      £000      £000      £000

Turnover:
Continuing
operations              143,359         -   143,359   145,016

Discontinued
operations                2,021         -     2,021     9,105
                           ----      ----      ----      ----
                        145,380         -   145,380   154,121

Cost
of sales               (92,203)         -  (92,203) (100,206)
                           ----      ----      ----      ----
Gross profit             53,177         -    53,177    53,915

Distribution
costs                  (34,568)         -  (34,568)  (37,181)

Administrative
expenses               (12,490)       267  (12,223)  (13,766)
                           ----      ----      ----      ----
                       (47,058)       267  (46,791)  (50,947)
                           ----      ----      ----      ----
                          6,119       267     6,386     2,968
Other
operating
expenditure               (271)         -     (271)       166

Operating
profit:
Continuing
operations                6,146       267     6,413     3,680

Discontinued
operations                (298)         -     (298)     (546)

                          5,848       267     6,115     3,134
Exceptional
items:
Continuing -
fundamental
reorganisation                -   (2,765)   (2,765)   (8,884)

Discontinued -
loss on
sale of
operation                     -   (1,483)   (1,483)         -

Bank
interest
receivable                  282         -       282       704

Interest
payable                 (3,269)         -   (3,269)   (4,708)
                           ----      ----      ----      ----
                        (2,987)         -   (2,987)   (4,004)
                           ----      ----      ----      ----
(Loss)/
Profit on
ordinary
activities
before
taxation                  2,861   (3,981)   (1,120)   (9,754)

Tax on
ordinary
activities              (1,366)         -   (1,366)   (1,519)
                           ----      ----      ----      ----

(Loss)/
Profit
attributable
to members
of the
parent
company                   1,495   (3,981)   (2,486)  (11,273)

Earnings /
(loss) per
share                      3.3p             (5.4)p    (24.6)p

Adjusted
earnings /
(loss) per
share                                                  (3.0)p

Fully
diluted
earnings /
(loss) per
share                      3.3p             (5.4)p    (24.6)p



Group Balance Sheet


                                   31 March         2 April
                                       2000            1999
                                       £000            £000
Fixed
assets
Tangible
fixed
assets                               20,588          27,467

Investments                           1,927           1,927
                                       ----            ----
                                     22,515          29,394
                                       ----            ----
Current
assets
Stocks                               25,760          21,698

Debtors                              36,839          40,658

Cash at
bank and
in hand                              10,773           9,670
                                       ----            ----
                                     73,372          72,026
                                       ----            ----
Creditors:
amounts
falling due
within
one year                           (72,550)        (76,489)
                                       ----            ----
Net current
assets /
(liabilities)                           822         (4,463)
                                       ----            ----
Total assets
less current
liabilities                          23,337          24,931

Creditors:
amounts
falling due
after more
than one year                       (3,635)           (602)

Provision
for liabilities
and charges                           (506)         (1,005)
                                       ----            ----
                                     19,196          23,324
                                     ======          ======
Capital
& reserves
Called up
share capital                         4,586           4,586

Share
premium                              25,101          25,101

Special
reserve                               2,180           2,180

Profit
and loss
account                            (12,671)         (8,543)
                                       ----            ----
                                     19,196          23,324
                                     ======          ======

Group Statement of Cash Flows

                                    Audited         Audited
                                   31 March         2 April
                                       2000            1999
                                       £000            £000
Net cash
inflow from
operating
activities                            7,037          15,997

Returns
on investments
and servicing
of finance                          (2,987)         (4,004)

Taxation                              (716)           (763)

Capital
expenditure
- net                                 (930)         (4,666)

Acquisitions
& disposals                             990               -

Financing -
loans repaid                        (1,521)        (21,402)
                                       ----            ----
Increase /
(Decrease)
in cash
in the
period                                1,873        (14,838)
                                       ----            ----
Reconciliation
to net debt:
Increase /
(Decrease)
in cash
in the period                         1,873        (14,838)

Cash outflow
from decrease
in debt and
lease financing                       1,521          21,402
                                       ----            ----
Change in
net debt
resulting
from cash
flows                                 3,394           6,564

Translation
difference                            1,815           (324)
                                       ----            ----
Movement in
net debt
in the period                         5,209           6,240

Opening
net debt                           (29,216)        (35,456)
                                       ----            ----
Closing
net debt                           (24,007)        (29,216)
                                       ----            ----


The above accounts do not constitute full accounts within the
meaning of the Companies Act.  Full accounts for the year to
31st March 2000, which have not yet been delivered to the
Registrar of Companies, will be sent to shareholders.

The auditors have issued an unqualified audit report.

Copies of this announcement are available to members of the
public at the Company's registered office.  New Lane Havant
Hants PO9 2NH.