Interim Results - 6 Months to 1st October 1999

Kenwood Appliances PLC
1 December 1999

       Interim results: half year ended 1st October 1999
                               
                               
    Kenwood results in line with expectations plus further
                    progress on borrowings
                               

£m
                                6 mths to     6 mths to
                                  1.10.99       2.10.99

Sales
from
continuing
business                            63.1          69.2

Gross
Margins                             35.0%         36.5%

Operating
Profit                               1.1           3.2

(Loss)/
Profit
Before
Exceptionals
& tax                               (0.2)          0.9

Exceptional
items                               (3.1)         (0.1)

(Loss)
Profit
before tax                          (3.3)          0.8

Net
Borrowings                          30.5          39.7

(Loss)/
Earnings
per share
-    before
exceptionals                         (0.6p)         1.3p
-    after
exceptionals                         (7.3p)         1.1p


David Nash, Chairman said today: -

'Despite the strength of sterling, the Group traded in line
with expectations in the first half.

Tight control of capital expenditure and working capital, in
the period, resulted in a further £9.2m reduction in
borrowings, compared to September 1998, after spending £1.7m
on restructuring charges.  Net interest payable fell from
£2.3m to £1.4m.'


Colin Gordon, Chief Executive said today: -

'Whilst sales for continuing operations fell 9% from £69.2m to
£63.1m, due to sterling's impact on exports and a difficult
Italian market, we have seen considerable progress elsewhere
during this period. Sales in the rest of the world have
stabilised and in the UK Kenwood's new products have generated
an encouraging 9% growth in revenues in a market which grew by
less than 1%.'

'The decline in gross margins was almost wholly the result of
the continuing weakness of the Euro.'

'There was considerable progress with our strategy to
transform Kenwood into an agile brand led company with the
restructuring programme continuing on plan.  Fixed costs were
reduced by £2.7m and the number of employees fell from 2,346
to 1,821.'

'As always, the full year result will be dependent upon the
Christmas season. Despite the continuing strength of sterling,
trading in October and November has been encouraging, with
continuing growth in the UK, recovery in Asia and a positive
response to the new products launched in Italy. The Board
therefore anticipates, in the absence of unforeseen
circumstances, that the benefits from new products and cost
reductions will result in a profit before tax and exceptional
charges for the full year.'


For further information:

Colin Gordon
Tel: [phone] (today)
Chief Executive, Kenwood Appliances
Tel: [phone] (thereafter)

Simon Rigby, Alex Brown
Tel: [phone]
Citigate Dewe Rogerson


                    KENWOOD APPLIANCES PLC
       INTERIM RESULTS: HALF YEAR ENDED 1ST OCTOBER 1999


FINANCIAL RESULTS

Total sales in the half-year were £64.2m compared to £73.4m.
Sales from continuing operations were £63.1m compared to
£69.2m last year.  This represents a fall of 8.9% and is due
to sterling's impact on exports and a difficult Italian
market.

Gross margins fell from 36.5% to 35.0%, almost all of which is
accounted for by currency.

Distribution and administration costs were reduced by £1.7m to
£21.3m as the benefits from the restructuring programme are
being realised.

Net interest charges fell £0.9m to £1.4m.

The loss before tax and exceptionals was £0.2m compared to a
profit of £0.9m in 1998/9. This was in line with the position
anticipated by the Board in the preliminary announcement made
on the 1st July 1999.

Exceptional charges of £3.1m have been incurred principally to
cover the loss on disposal of the specialist engineering
business and the cost of the continuing restructuring
programme in the UK. These costs were in line with the
forecast made in July.

The loss after exceptionals and before tax was £3.3m compared
to a profit of £0.8m in 1998/99. At this stage the Directors
are not recommending an interim dividend.

Tight controls on capital expenditure and reduced working
capital resulted in borrowings reducing by £9.2m, in the past
twelve months, to £30.5m.

TRADING REVIEW

     UK

     Turnover of Kenwood products rose by 9% to £20.1m in a
     market which grew by less than 1%. Kenwood grew share in
     categories where its new product programme had a
     significant impact including deep fat fryers and kettles.
     Margins were also significantly better than last year.
     
     Italy

     Difficult market conditions in Italy had a
     disproportionate effect in certain niche categories,
     where Ariete is strongest. Consequently its domestic
     turnover fell 23% to 20.6 bn lire (£6.9m). This is being
     addressed in the second half by an aggressive programme
     of new product launches. Export sales were 6% lower at
     18.2 bn lire (£6.1m). Vapori exports to the USA and
     Australia were very encouraging.
     
     For Mizushi the strategy remains unchanged, namely to
     reduce borrowings whilst trading at breakeven. Turnover
     stabilised at 9.4bn lire (£3.2m). Working capital fell by
     67% to 5.5 bn lire (£1.8m) compared to 16.8 bn lire
     (£6.1m) at 2nd October 1998.
     
     Overseas Subsidiaries
     
     All of the overseas subsidiaries showed an improvement in
     contribution with the exception of Poland and South
     Africa.  The closure of the Polish sales company is
     planned for the fourth quarter and new product launches
     are anticipated to address the issues in South Africa.
     The Asian businesses of Malaysia, Singapore and Hong Kong
     saw strong growth.
     
     Export Markets - Kenwood Distributors
     
     Sales continue to be difficult to many export markets and
     as a result turnover fell 19% to £10.2m.
     
     
     Manufacturing and Sourcing

     The changes in Havant manufacturing are nearing
     completion. In the half year production of food
     processors and deep fat fryers commenced in China. The
     only activity still to be transferred from the UK is the
     production of motors which is currently being piloted in
     the Company's Chinese factory. Manufacturing headcount in
     the UK fell by 286 to 244 during the six months.
     
     The proportion of third party manufacture rose to 65%
     from 61% in line with the strategic refocusing of the
     business.
     
     Kenwood Transformation Programme

     Significant progress has been made in executing the
     programme to transform Kenwood into an agile brand led
     business. A number of further steps have been taken In
     the last six months: -
     * The specialist engineering business on the Isle of
       Wight was sold for £1.1m;
     * The European distribution of Kenwood product was
       outsourced to UPS World-wide Logistics;
     * Total headcount fell to 1,821 compared to 2,346 in
       September 1998 and of this total the Group employed 399
       personnel in the UK compared to 843 a year ago.
       
     
FUTURE PROSPECTS

As always, the full year result will be dependent upon the
Christmas season. Despite the continuing strength of sterling,
trading in October and November has been encouraging with
continuing growth in the UK, recovery in Asia and a positive
response to the new products launched in Italy. The Board
therefore anticipates, in the absence of unforeseen
circumstances, that the benefits from new products and cost
reductions will result in a profit before tax and exceptional
charges for the full year.


Consolidated Profit & Loss Account


                    Un-     Un-     Un-     Un- Audited
                audited audited audited audited   yr to
                 6 mths  6 mths  6 mths  6 mths 2 April
                  1 Oct   1 Oct   1 Oct   2 Oct    1999
                   1999    1999    1999    1998
                 £000's  £000's  £000's  £000's  £000's
                 Before
                 Excep-   Excep   Total
                 tional  tional
Turnover:
Continuing
operations       63,061       -  63,061  69,236 145,016

Discontinuing
operations        1,111       -   1,111   4,126   9,105
                   ----    ----    ----    ----    ----
                 64,172       -  64,172  73,362 154,121
Cost
of
sales          (41,691)       -(41,691)(46,569)(101,077)
                   ----    ----    ----    ----    ----
Gross
profit           22,481       -  22,481  26,793  53,044

Distribution
costs          (15,081)       -(15,081)(15,340)(35,721)

Administrative
expenses        (6,234)       - (6,234) (7,686)(14,248)
                   ----    ----    ----    ----    ----
                (21,315)       -(21,315)(23,026)(49,969)
                   ----    ----    ----    ----    ----
                  1,166       -   1,166   3,767   3,075
Other
operating
expenditure        (51)       -    (51)   (578)      59

Operating
profit:

Continuing
operations        1,233       -   1,233   3,299   3,689

Discontinued
operations        (118)       -   (118)   (110)   (555)

                  1,115       -   1,115   3,189   3,134

Exceptional
items:
Continuing
fundamental
reorganisation        - (1,589) (1,589)   (105) (8,884)

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

Bank
Interest
receivable          192       -     192      37     704

Interest
payable         (1,545)       - (1,545) (2,308) (4,708)
                   ----    ----    ----    ----    ----
                (1,353)       - (1,353) (2,271) (4,004)
                   ----    ----    ----    ----    ----
(Loss)/
profit on
ordinary
activities
before
taxation          (238) (3,072) (3,310)     813 (9,754)

Tax on
Ordinary
activities         (37)       -    (37)   (317) (1,519)
                   ----    ----    ----    ----    ----
(Loss)/
profit
attributable
to
members of
the
parent
company           (275) (3,072) (3,347)     496(11,273)

Earnings
per share            -0.6p   -6.7p   -7.3p    1.1p  -24.6p

Fully
diluted
earnings
per share            -0.6p   -6.7p   -7.3p    1.1p  -24.6p


Balance sheet

                      Unaudited   Unaudited     Audited
                          1 Oct       2 Oct       2 Apr
                           1999        1998        1999
                         £000's      £000's      £000's

Fixed
assets
Tangible
Fixed
assets                   23,182      36,261      27,467

Investments               1,927       1,927       1,927
                           ----        ----        ----
                         25,109      38,188      29,394
                           ----        ----        ----
Current
assets
Stocks                   24,270      31,860      21,698
Debtors                  40,384      48,416      40,658

Cash at
bank and
in hand                   7,509      12,898       9,670
                           ----        ----        ----
                         72,163      93,174      72,026
                           ----        ----        ----
Creditors :
Amounts
falling
due
within
1 year
Borrowings             (37,764)    (51,991)    (38,284)
Trade and
Other
creditors              (38,981)    (43,760)    (38,205)
                           ----        ----        ----
Net
Current
liabilities             (4,582)     (2,577)     (4,463)
                           ----        ----        ----
Total
Assets
Less
Current
liabilities              20,527      35,611      24,931

Creditors :
Amounts
falling
due
after
more
than 1 year               (287)       (645)       (602)

Provision
for
liabilities
and charges               (712)       (119)     (1,005)
                           ----        ----        ----
                         19,528      34,847      23,324
                           ----        ----        ----
Capital
& 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
& loss
account                (12,339)       2,980     (8,543)
                           ----        ----        ----
                         19,528      34,847      23,324
                           ----        ----        ----

Group Statement of Cash Flows

                      Unaudited   Unaudited     Audited
                          1 Oct       2 Oct       2 Apr
                           1999        1998        1999
                         £000's      £000's      £000's

Operating
profit                    1,115       3,189       3,134

Depreciation              2,767       3,565       7,207

Loss/
(profit)
on disposal
of fixed
assets                        -         133           -

(Increase)/
decrease
in stock                (3,624)       1,126      10,455

(Increase)/
decrease
in debtors                (665)     (1,675)       2,574

Increase/
(decrease)
in creditors              1,197     (1,890)     (4,596)
                           ----        ----        ----
                            790       4,448      18,774
Cash
outflow
from
exceptional
items                   (1,656)     (1,203)     (2,777)
                           ----        ----        ----
Net
cash
(outflow)/
inflow
from
operating
activities                (866)       3,245      15,997

Returns
on
investments
& servicing
of finance              (1,353)     (2,315)     (4,004)

Taxation                   (37)       (644)       (763)

Capital
expenditure               (218)     (2,525)     (4,666)

Acquisitions
& disposals                 990       (244)           -

Financing
-    loans
repaid                  (9,118)     (3,736)    (21,402)
                           ----        ----        ----
(Decrease)
in cash
in the
period                 (10,602)     (6,219)    (14,838)
                           ----        ----        ----
Reconciliation
to net
debt:
(Decrease)
in cash
in the
period                 (10,602)     (6,219)    (14,838)

Cash
outflow
from
decrease
in debt
and lease
financing                 9,118       3,736      21,402
                           ----        ----        ----
Change in
net debt
resulting
from cash
flows                   (1,484)     (2,483)       6,564

Translation
difference                  158     (1,799)       (324)
                           ----        ----        ----
Movement
in net
debt in
the period              (1,326)     (4,282)       6,240

Opening
net
debt                   (29,216)    (35,456)    (35,456)
                           ----        ----        ----
Closing
net
debt                   (30,542)    (39,738)    (29,216)
                           ----        ----        ----


Turnover & Segmental Analysis

                      Unaudited   Unaudited     Audited
                          1 Oct       2 Oct       2 Apr
                           1999        1998        1999
                         £000's      £000's      £000's

Turnover
by
destination:

Sales
to
third
parties
UK                       20,298      20,889      40,939

Continental
Europe                   28,651      36,725      80,563

Rest
of the
world                    15,223      15,748      32,619
                           ----        ----        ----
                         64,172      73,362     154,121
                           ----        ----        ----
Turnover
by origin:

Total
sales
UK                       33,611      35,348      71,039

Continental
Europe                   29,931      37,864      82,842

Rest of
the
world                    17,734      19,302      37,714
                           ----        ----        ----
                         81,276      92,514     191,595
                           ----        ----        ----
Inter-
segment
sales

UK                        6,105       6,506      14,056

Continental
Europe                    3,406       4,176       8,386

Rest of
the world                 7,593       8,470      15,032
                           ----        ----        ----
                         17,104      19,152      37,474
                           ----        ----        ----

Sales to
third
parties

UK                       27,506      28,842      56,983

Continental
Europe                   26,525      33,688      74,456

Rest of
the world                10,141      10,832      22,682
                           ----        ----        ----
                         64,172      73,362     154,121
                           ----        ----        ----


Notes


1.   The interim financial statements are unaudited and do not
   constitute full accounts within the meaning of the Companies
   Act 1985.  Figures for the financial year to 2nd April 1999
   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 1999
   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