Interim Results

Kenwood Appliances PLC
24 November 2000



                            KENWOOD APPLIANCES PLC

                               24 November 2000

             Interim results: half year ended 30th September 2000


£m                                                 6 months to     6 months to

                                                       30.9.00         1.10.99

Sales from continuing business                            71.7            63.1

Gross margins*                                           33.4%           35.1%

Operating profit*                                          1.9             1.1

Profit/Loss before exceptionals & tax                      0.4           (0.2)

Exceptional items - operating                            (1.0)               -
- non operating                                          (1.6)           (3.1)

(Loss) before tax                                        (2.2)           (3.3)

Net Borrowings                                            25.4            30.5

(Loss)/Earnings per share
Before exceptionals                                     (1.2p)          (0.6p)
After exceptionals                                      (6.9p)          (7.3p)

* before exceptional charges

David Nash, Chairman said today: -

'This has been a challenging six months for Kenwood. As the Board noted in its
statement issued on 4th July, there has been increased pressure from currency
and retail price deflation'.

'Sales from continuing business rose by 13.6%, but gross margins fell by 1.7
percentage points to 33.4%. Profit before tax and exceptionals was £0.4m
compared to a loss of £0.2m in 1999/2000. This was achieved despite the
adverse impact of currency movements and on a constant currency basis PBT
would have been approximately £0.7m higher'.

'Borrowings were reduced by a further £5.1m to £25.4m compared to September
1999'.

'As announced on 22nd November and following changes in senior UK finance
personnel, including the appointment of a new Group Finance Director, a
thorough review of systems and accounting procedures in the UK has been
carried out. This has identified a number of accounting issues in respect of
the recording of stock, which have been investigated by the Group's auditors.
The Board has decided to take an exceptional charge of £1.0m to operating
profits for the period to 30th September 2000 in respect of the prior year
impact of these issues. This exceptional charge does not have a cash impact.



Colin Gordon, Chief Executive said today: -

'Sales on continuing businesses in the first half at £71.7m were £8.6m higher
than in 1999. Encouraging performances were recorded in the UK (+12.3%) and
Ariete (+30.3%). Most of the businesses report a significant improvement in
sales over last year as new product programmes continued to be rolled out'.

'Gross margins were impacted negatively by the weakness of the Euro and the
strength of the US Dollar and currency accounted for a 0.7% decline compared
to last year. The balance of the margin decline of 1.0 percentage point was a
combination of sales mix and deflationary pressures in key markets including
the UK'.

'The fundamental reorganisation of the Company and the transformation of
Kenwood into a brand led business has continued. The reshaping of our
manufacturing operations in the UK and the sale and lease back of the UK site
were completed and the Company achieved its stated objective of reducing its
total UK workforce to below 1400 employees compared with 2745 three years ago.
The exceptional charges in the half year, in connection with this
reorganisation, were £1.6m'.

'The Company continues to benefit from its new product programme. Nevertheless
the pressure on margins from currency movements and retail price deflation
continues. As always the full year result will be heavily dependent upon the
Christmas Season and the strength of Sterling relative to the US Dollar and
the Euro'.

For further information contact:

Colin Gordon          Kenwood Appliances plc          0239 247 6000

David Nolder          Citigate Dewe Rogerson          020 7638 9571

Alex Brown          Citigate Dewe Rogerson          020 7638 9571




                KENWOOD APPLIANCES PLC

            INTERIM RESULTS : HALF YEAR ENDING 30th SEPTEMBER 2000

FINANCIAL RESULTS

Total sales in the half-year were £71.9m compared to £64.2m. Sales from
continuing operations were £71.7m compared to £63.1m last year. This is an
increase of 13.6% and represents a continuation of the trends seen in the
second half of last financial year with good growth in the UK and a strong
performance in Ariete - the Group's Italian subsidiary.

Gross margins fell from 35.1% to 33.4%; this was a function of currency (0.7
percentage points), sales mix and intense competition causing retail prices to
fall in a number of key markets.

Distribution and administration costs before exceptional items increased by £
0.7m to £22.0m, but fell as a percentage of sales from 33.2% to 30.6%. Half of
the increase was attributable to additional expenditure on advertising and
promotions and the balance was from directly variable costs such as transport.

Despite lower borrowings, rising interest rates in the UK and Europe resulted
in net interest payable rising slightly from £1.4m to £1.5m.

Exceptional charges of £2.6m have been incurred. £1.0m was in operating
exceptional charges to address the prior year impact of a number of accounting
issues in relation to the recording of stock.

In 1998 a fundamental restructuring programme was announced which was forecast
to cost £15.1m and to take three years. This programme, which is due to be
completed this financial year is now forecast to cost £15.4m largely because
the redundancy programme has been more extensive than at first planned and has
included a restructuring of the Italian operations, which will result in
further savings.

In the six months to 30th September, £1.6m of exceptional charges were
incurred as part of this restructuring programme. The largest element was a
redundancy charge of £0.9m as the programme to downsize UK manufacturing was
completed.

It is anticipated that a further £0.7m of fundamental restructuring charges
will be incurred in the second half.

The cash impact of the fundamental reorganisation was £1.7m but the operating
exceptional charge had no cash effect.

The loss after exceptionals and before tax was £2.2m compared to a loss of £
3.3m last year. The Directors are not recommending an interim dividend.

Compared to September 1999, borrowings were reduced by £5.1m to £25.4m.



TRADING REVIEW

UK

The sales momentum generated in the second half of 1999/2000 continued, with
turnover of Kenwood products rising by 12.3% to £22.3m in a market which grew
7.5% over last year. As a result Kenwood grew overall share from 10.5% to
11.8%. Kenwood gained share in food processors, blenders, hand mixers and
kettles. Deflationary pressures continued with retail prices falling in a
number of key categories such as kettles and toasters.

Italy

Ariete showed a strong performance despite a soft domestic market, which
declined by 2.4%. Sales in Italy increased by 30%. The performance in export
sales was even stronger with an 80% increase to 34bn lire (£10.8m). The
strongest export markets were the USA and Australia where the Vapori steam
cleaning products have been particularly successful.

Overseas Subsidiaries

All of the overseas subsidiaries showed an improvement in sales with the
exception of Austria. After a difficult period and despite the weakness of the
Rand, South Africa produced a good recovery in the first half. Strong growth
continued in the Asian businesses of Malaysia, Singapore and Hong Kong.

Export Markets - Kenwood Distributors

A positive performance was achieved in this area with sales rising by 23.3% to
£11.5M. Particularly strong performances were recorded in the Middle East and
Greece and the new strategy adopted in the USA is beginning to show benefits.

Manufacturing and Sourcing

The programme to reshape the Group's UK manufacturing operations was completed
in the half year. There are now 120 UK employees in manufacturing and
distribution compared to 244 at the end of September 1999 and 902 three years
ago. In the half year the Group closed down its UK motor winding business and
transferred this activity to its plant in China.





Kenwood Transformation Programme

Significant progress has been made in executing the programme to transform
Kenwood into a brand led business. A number of further steps have been taken
in the last six months: -

  * The 12-acre site at Havant was sold for £5.4m and a leaseback negotiated
    for that proportion of the space required for Kenwood's revised
    operations. The programme to redevelop this into modern offices and
    assembly plant for the Kenwood Chef has commenced.
  * Total headcount fell to 1,382 compared to 1,821 in September 1999 and of
    this total the Group employed 285 personnel in the UK compared to 399 a
    year ago.
  * The new product programme continued to drive sales growth with more than
    20% of sales being generated by products launched in the last eighteen
    months.

FUTURE PROSPECTS

'The Company continues to benefit from its new product programme. Nevertheless
the pressure on margins from currency movements and retail price deflation
continues. As always the full year result will be heavily dependent upon the
Christmas Season and the strength of Sterling relative to the US Dollar and
the Euro'.


Group Statement of

Cash Flows
                                               Unaudited  Unaudited     Audited
                                               30th Sept    1st Oct  31st March
                                                    2000       1999        2000
                                                  £000's     £000's      £000's

Operating profit                                     896      1,115       6,115
Depreciation                                       2,795      2,767       5,853
Loss/(profit) on disposal of fixed assets              -          -           -
(Increase)/decrease in stock                         213    (3,624)     (6,002)
(Increase)/decrease in debtors                   (3,018)      (665)       (950)
Increase/(decrease) in creditors                   (172)      1,197       5,475
                                                     714        790      10,491
Cash inflow/(outflow) from exceptional items       5,733    (1,656)     (3,454)
Net cash (outflow)/inflow from
Operating activities                               6,447      (866)       7,037
Returns on investments and
Servicing of finance                             (1,097)    (1,353)     (2,987)
Taxation                                           (765)       (37)       (716)
Capital expenditure - net                        (1,693)      (218)       (930)
Acquisitions and disposals                       (4,681)       990         990
Financing - loans repaid                         (4,500)    (9,118)     (1,521)
(Decrease) in cash in the period                 (6,289)   (10,602)       1,873
Reconciliation to net debt:
(Decrease) in cash in the period                 (6,289)   (10,602)       1,873
Cash outflow from decrease
In debt and lease financing                        4,500      9,118       1,521
Change in net debt resulting from cash flows     (1,789)    (1,484)       3,394
Translation difference                              415        158        1,815
Movement in net debt in the period               (1,374)    (1,326)       5,209
Opening net debt                                (24,007)   (29,216)    (29,216)
Closing net debt                                (25,381)   (30,542)    (24,007)


Consolidated Profit &

Loss Account
                                       Unaudited              Unaudited Audited

                                                               6 months Year to
                                                                     to
                                 6 months to 30th September         1st    31st
                                                                October   March
                                            2000
                                                                   1999    2000
                                     £000's      £000's  £000's  £000's  £000's
                                                       
                           Before
                                exceptional Exceptional  Total    Total   Total
Turnover:
Continuing operations                71,650        -   71,650   63,061 143,359
Discontinuing operations                239        -      239    1,111   2,021
                                     71,889        -   71,899   64,172 145,380
Cost of sales                      (47,913)    (1,278)(49,191) (41,691)(92,203)
Gross profit                        23,976     (1,278) 22,698   22,481  53,177
Distribution costs                 (15,957)       230 (15,727) (15,081)(34,568)
Administrative expenses             (6,075)        29  (6,046)  (6,234)(12,223)
                                   (22,032)       259 (21,773) (21,315)(46,791)
                                     1,944     (1,019)    925    1,166   6,386
Other operating expenditure            (29)         -     (29)     (51)   (271)
Operating profit:
Continuing operations                1,915     (1,019)     896   1,233   6,413
Discontinued operations                  -          -        -    (118)   (298)
                                     1,915     (1,019)     896   1,115   6,115
Exceptional items:
Continuing - fundamental                 -     (1,608)  (1,608) (1,589) (2,765)
reorganisation
Discontinued -                           -          -        -  (1,483) (1,483)

Loss on sale of operation
Bank interest receivable               107          -      107     192     282
Interest payable                    (1,583)         -   (1,583) (1,545) (3,269)
                                    (1,476)         -   (1,476) (1,353) (2,987)
(Loss) on ordinary activities          439     (2,627)  (2,188) (3,310) (1,120)

before taxation
Tax on ordinary activities            (991)         -     (991)    (37) (1,366)
(Loss) attributable to members        (552)    (2,627)  (3,179) (3,347) (2,486)
Of the parent company
Earnings per share                   -1.2p       -5.7p -6.9p     -7.3p   -5.4p
Adjusted earnings per share *                          -1.2p     -0.6p    3.3p
Fully diluted earnings per           -1.2p       -5.7p -6.9p     -7.3p   -5.4p
share

Adjusted earnings per share is presented in order to reflect underlying
activity.




Balance Sheet
                                             Unaudited    Unaudited     Audited
                                        30th September  1st October  31st March
                                                  2000         1999        2000
                                                £000's       £000's      £000's
Fixed assets
Tangible fixed assets                           13,207       23,182      20,588
Investments                                      1,927        1,927       1,927
                                                15,134       25,109      22,515
Current assets
Stocks                                          25,510       24,270      25,760
Debtors                                         39,815       40,384      36,839
Cash at bank and in hand                         6,717        7,509      10,773
                                                72,042       72,163      73,372
Creditors : amounts falling due
within one year
Borrowings                                    (31,725)     (37,764)    (33,580)
Trade and other creditors                     (38,131)     (38,981)    (38,970)
Net current assets / (liabilities)               2,186      (4,582)         822
Total assets less current liabilities           17,320       20,527      23,337
Creditors : amounts falling due
after more than one year                         (373)        (287)     (3,635)
Provision for liabilities and charges            (315)        (712)       (506)
                                                16,632       19,528      19,196
Capital and reserves
Called up share capital                          4,586        4,586       4,586
Share premium                                   25,101       25,101      25,101
Special reserve                                  2,180        2,180       2,180
Profit and loss account                        (15,235)    (12,339)    (12,671)
                                                16,632       19,528      19,196



Notes:


 1. The interim financial statements are unaudited and do not constitute full
    accounts within the meaning of the Companies Act 1995. Figures for the
    financial year to 31st March 2000 have been extracted from the financial
    statements which have been delivered to the Registrar of Companies on
    which the Auditors have given an unqualified report.

 2. The financial statements have been prepared on the basis of the accounting
    policies set out in the Group's 2000 statutory accounts.

 3. A copy of the announcement will be sent to shareholders, additional copies
    can be obtained from the Company Secretary, Kenwood Appliances Plc, New
    Lane, Havant, Hants, PO9 2NH.