KEN Kendrick Resources Plc

RNS No 3948j
KENWOOD APPLIANCES PLC
7 June 1999


       Kenwood accelerates restructuring programme

Kenwood Appliances PLC announces today two further moves
marking the near completion of a radical strategy to
restructure Kenwood from a vertically integrated,
predominantly UK, manufacturing company into an agile
brand led business.

These moves are part of a three year programme which has
already seen Kenwood move out of metal stamping, die
casting, plastic moulding and printing in the UK in order
to drive down the cost base to more competitive levels.


     Move to low cost manufacturing
     
     The Company's remaining UK production is to be
     transferred to high quality, low cost operations in
     China with the exception of the flagship Kenwood
     Chef and water filter business. These are being
     retained in the UK for marketing and technological
     reasons. This move will result in the closure and
     sale of the 12 acre manufacturing site in Havant,
     Hampshire with the loss of 260 jobs.  The Group is
     planning to relocate its remaining UK production and
     head office to new, smaller premises in the area.

     These moves will be completed by the end of 2000 and
     will reduce product costs and release the value of
     the Havant site.
     
     Restructuring charges are forecast to be #10.7
     million of which #7.0 million is in respect of asset
     writedowns.  The net cash proceeds of the disposal
     of the Havant site, which are expected to exceed
     #4.5 million, will be used to reduce borrowings.

     Sale of Freshwater Business
     
     The Group also announces the sale of its specialist
     turned parts engineering business to the management
     team for a cash consideration of #1.1 million.   The
     business is based in Freshwater on the Isle of Wight
     and employs 137 people. In the year to 2nd April
     1999, it had sales of #5.3 million and produced a
     small loss. Approximately 60% of sales are to
     customers outside the Kenwood Group.
     
     The book loss on the disposal, resulting from asset
     write downs, will be #2.3 million.  The cash
     proceeds will be used to reduce borrowings.
     
     Financial implications
     
     These developments, together with the sale of the
     Company's UK plastic moulding machinery announced in
     February 1999, will be completed by December 2000.
     Together, they will progressively benefit profits
     over the next two years and are  projected to add
     approximately #4 million per annum to profits before
     tax in the financial year commencing April 2001.
     
     In the trading statement issued on the 24 March
     1999, the Kenwood Board indicated that there would
     be significant exceptional charges relating to UK
     and international restructuring. The UK element of
     this will result in exceptional charges of
     approximately #14 million largely resulting from non-
     cash asset write-downs. #8.8 million will be charged
     in the year ended 2 April 1999, of which #7.8
     million will be non cash asset write downs,
     principally addressing the value of UK properties.
     The balance of #1.0 million is largely in respect of
     redundancy costs.
     
Colin Gordon, Chief Executive said today: "With three
quarters of our sales overseas, UK manufacturing is no
longer a competitive option for us on most of our product
lines.  I deeply regret the loss of jobs but in order to
safeguard the long-term competitiveness and success of
Kenwood there is no alternative.

"I am pleased that we have been able to agree terms with
the management team at Freshwater in a transaction that
offers both good value for our shareholders and
continuing employment to the workforce.

"These moves represent the most important step in the
restructuring of the company and mark one of the final
phases in the transformation of Kenwood from a vertically
integrated manufacturing business into an agile brand led
company."


Contact:

Simon Rigby  Citigate Dewe Rogerson     -    01705 392294
Alex Brown, Citigate Dewe Rogerson      -    0171 282 2837
Colin Gordon Kenwood                    -    01705 476000

END

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