Glen Dimplex, the electrical products group controlled by Mr Martin Naughton, has increased its stake in the British group Kenwood to more than 10 per cent, according to a disclosure to the London Stock Exchange.

Glen Dimplex has been increasing its stake steadily in Kenwood over the past two years and many in the market believe its ultimate aim is a takeover.

Kenwood is only now emerging from a prolonged slump after a major rationalisation programme, multimillion pound losses and a £1 million sterling (€1.6 million) hit following problems with its stock control system. The company is still a heavy loss-maker although losses in the first half of this year fell from £3.3 million sterling to £2.2 million sterling.

At the time of the results, Kenwood said it was beginning to see the benefits of the three-year recovery programme.

Kenwood shares are currently trading at 69p sterling, valuing the company at £31.6 million sterling.