RNS Number:2801S
Kensington Group PLC
20 November 2003

20 November 2003



Kensington on Track to Deliver Further Profitable Growth in 2003



The following is an update on trading ahead of the close period for the year
ending 30 November 2003.



The Directors are pleased to report that Kensington's profit growth is on track
to meet their expectations for the year ending 30 November 2003.  During the
year we have seen strong new business growth and continued investment in the
business creating the potential for enhanced earnings in future years.



In the first eleven months to 31 October 2003, Kensington has continued to grow
new business volumes whilst maintaining the credit quality and performance of
its mortgage portfolio.


*         Completions for the eleven months to 31 October 2003 were over
#1,800m, up over 100% on the same period in 2002, and we expect that total new
business completions will be around #2bn for 2003, above our original
expectations;


*         Mortgage redemptions have been stable and the mortgage book has
continued to grow successfully.  The mortgage book now stands above #3bn
(compared with #1.8bn at the end of October 2002)  with an average gross product
margin of 3.79% over LIBOR



*         The Mortgage Lender ("TML"), acquired in September 2002, is performing
well.  In the first eleven months of the year, TML introduced over #500m of
mortgage business to Kensington Mortgage Company at good margins and low
loan-to-value ratios.  In line with our expectations, and as a result of the
immediate write off of TML's new business origination costs, the impact of TML
should be broadly neutral for 2003 but will be significantly earnings enhancing
from 2004;



*         Kensington's new business pipeline stands at over #420m, 50% higher
than the position at the end of October 2002;



*         The risk profile of new business remains conservative and average new
business loan-to-value ratios have remained prudent at around 78%;



*         The performance of the loan portfolio has continued to be strong with
arrears and loan losses remaining low and below the levels experienced in 2002;



*         During the second half of 2003 our securitisation programme continued
successfully and we issued #1,450m of bonds via two transactions, RMS 15 and RMS
16.  We were delighted to receive further rating upgrades on previous bond
issues.   Subordinated bonds from the first twelve securitisations have now been
upgraded;



*         We have completed our first whole loan sale with #60m of loans being
acquired by West Bromwich Mortgage Company Limited, a wholly owned subsidiary of
West Bromwich Building Society.  We expect to complete further portfolio sales
in 2004 as a complementary diversification to our funding through
securitisation.


We continue to pursue opportunities to enhance shareholder value and since the
1H 2003 results announcement Kensington has bought-back 685,000 of its shares
for cancellation.



The directors remain confident about the future for Kensington.  UK employment
remains high and interest rates, whilst trending upwards, remain at historically
low levels.  Supported by the evidence of recent new business demand,
Kensington's directors expect that monetary tightening will have a less material
impact in Kensington's immature, growing and specialist market than in the
traditional UK consumer credit industry.  Furthermore, Kensington's consistent
and prudent underwriting policy (having maintained strict income multiples and
loan to value ratios despite a 350bp decline in interest rates over the last 5
years) has ensured that its mortgages will remain affordable and a high
repayment priority for its customers.



Having strengthened our leadership position in 2003, we will continue to focus
on delivering disciplined growth through prudent, specialist risk management.



The 2003 preliminary results will be announced on 27 January 2004.


ENDS.



ENQUIRIES:

John Maltby - Chief Executive
Kensington Group plc  - 020 7297 7800

Geoffrey Pelham-Lane
Financial Dynamics  - 020 7269 7194



NOTES TO EDITORS



Kensington Group plc, "Kensington" is a leader in the UK specialist residential
mortgage market.  Kensington provides mortgages to borrowers who do not conform
to the underwriting criteria of traditional suppliers of mortgages in the UK
such as the self-employed, contractors, older borrowers, temporary employees and
those with an adverse credit history.






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