Kenwood hit by worsening markets
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SHARES IN Kenwood Appliances slumped by 20 per cent yesterday as the kettles-to-hair curlers group warned it would make a loss due to deteriorating trading conditions in eastern Europe and South Africa, writes Andrew Verity.
The warning is the third in a year for the group, which is undergoing a big restructuring in an attempt to reverse a five-year slide in its share price.
Kenwood said the poor trading conditions, combined with the strength of sterling, meant it would make a pre-tax loss in the six months to 2 April, while the full-year figure should be "around break-even". No dividend will be recommended.
Profits were also affected by slower UK consumer spending, notably at Kenwood's biggest customer, GUS/Argos, and a string of asset write-downs and restructuring. In two years Kenwood has cut staff by half, leaving around 700 workers.
Colin Gordon, chief executive, said the trading environment strengthened the need to move away from Kenwood's old status as a vertically integrated manufacturer. Manufacturing is gradually being transferred to China.
The warning was the latest in a series of shocks that have left Kenwood vulnerable to a bid. Yesterday the share price fell to 76p, one-fifth of its level five years ago, valuing the company at pounds 45m.
Likely predators include Glen Dimplex, the private Irish company that makes Morphy Richards appliances, and Alba, the quoted electronic equipment maker. UK Active Value, the shareholder activist group, has a 17 per cent stake, and the company turned down an approach from Pifco last year.
The global trading conditions have also affected competitors in kitchen appliances. Operating profit at Morphy Richards this year was down 49 per cent.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments