Pifco undaunted by Kenwood rebuffs

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The Independent Online
PIFCO HOLDINGS, the Russell Hobbs kettles and Carmen hair curlers company, revealed yesterday that it is still interested in buying Kenwood Appliances though it has not yet made another approach. Pifco made several approaches to Kenwood last year but was rebuffed.

The Pifco chairman, Michael Webber, said he remained convinced of the industrial and commercial logic of bringing the companies together and did not rule out an eventual deal.

"There's been consolidation at the retail end so we believe that the manufacturers should also consolidate," he said. "We are looking for acquisitions. It's been a stated policy."

His comments came as Pifco reported an upbeat set of results along with plans to enfranchise its A shares, and as Kenwood issued a profits warning which said trading remained poor.

Under the terms of the share enfranchisement, Pifco's ordinary shareholders receive a bonus issue of 1 for 12 to make up for the dilutive effects. The news pushed Pifco shares up 13.5p to 203p. Pifco profits rose by 23 per cent to pounds 4.2m in the year to April and its cash pile increased from pounds 3.4m to pounds 10.9m.

The company's buoyant statement was in stark contrast to Kenwood's, which said that first-half profits are likely to be "materially below last year". Chairman David Nash said that since the company's annual meeting in June trading conditions had remained "soft" in export markets and that July was a weak month in the UK. He said any shortfall in the full year would depend on trading in the peak September month.

Kenwood reported profits of pounds 2.2m in the first half last year and a pounds 11.4m loss in the full year after heavy exceptional costs.

The shares stayed at 110p, supported by the possibility of a Pifco bid. Kenwood is valued at pounds 50m.

Mr Webber said Pifco was not under pressure to make an acquisition. The company is also looking to secure a European partner to take Pifco's flat element (Optec) technology into new applications such as vending machines and electric showers.

Pifco's main growth source last year was Russell Hobbs, its premium housewares brand, with sales of Millennium kettles continuing to grow. Its other brands - Tower, Carmen, Mountain Breeze, Pifco and Salton - all progressed. Trading margins improved to 8 per cent from 7.1 per cent

Pifco has just launched a trade catalogue of over 40 new products.

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