Final Results

Ideal Shopping Direct PLC
27 July 2001


27 JULY 2001

FOR IMMEDIATE RELEASE

Ideal Shopping Direct PLC

Ideal Shopping Direct PLC, whose principal activity is the operation of the
Ideal World TV home shopping channel, announces its Preliminary Results for
the year ended 31 December 2000.

Key Points:

-     Turnover £16.4m (1999: £9.7m)

-     Loss before tax £6.0m (1999: profit £0.5m)

-     £6.9m raised via AIM placing in February 2000

-     Ideal World TV home shopping channel launched on 17 April 2000

-     Rapid growth of TV sales

-     Catastrophic fire on 6 March 2001

-     Business being re-established, insurance payments being received

-     Board proposing to raise £3 million additional working capital

-     Growth prospects for TV home shopping encouraging



Ideal Shopping Direct PLC ('Ideal Shopping Direct' or 'the Company')

Preliminary Results for the year ended 31 December 2000

CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT

Overview

The year ended 31 December 2000 was one of achievement.  The Company
successfully floated on AIM and subsequently launched Ideal World, our TV home
shopping channel.  However, following the year end a fire destroyed the
Company's TV studios, warehouse and offices.

Financial Review

The results for the year, despite better than forecast sales performance of
Ideal World, have been impacted by higher than anticipated start up costs
associated with the TV operation and a disappointing performance of the
catalogue business.  All start up costs have been written off in the year in
accordance with current accounting standards.

Turnover for the year amounted to  £16.4 million (1999: £9.7 million)
reflecting the significant impact of sales of Ideal World against a background
of broadly flat turnover in the traditional catalogue business. The loss
before tax was £5,970,000 (1999: profit of £451,000).  Loss per share amounted
to 30.4p (1999 earnings per share 2.1p)

As at 31 December 2000 cash balances stood at £3.8 million having benefited
from strong seasonal sales.  However since the year end, as anticipated, the
balance decreased, reflecting the lower level of sales following the
pre-Christmas seasonal peak.

A requirement for additional working capital has arisen as a result of higher
than anticipated losses for the year ended 31 December 2000, the inevitable
disruption caused by the fire and the need to fund the growth of the Ideal
World TV business.  Consequently, the Board is proposing to raise
approximately £3.0 million (net of expenses) through a placing of ordinary
shares.  Details of this fundraising have been circulated to shareholders
separately.  To demonstrate their commitment to the Company and at the request
of certain potential investors, the Executive Directors have agreed to
participate in the placing.  The Directors are of the opinion, after taking
into account the proposed share placing and the rescheduling of certain
creditor payments, that the Company has sufficient resources for its present
requirements.  The cash flow forecasts prepared by the Directors are, however,
critically dependent upon assumptions regarding the timing and extent of
insurance payments.  A further equity fundraising may be required in the event
that insurance payments do not occur as forecast.  There can be no certainty
regarding the availability of such equity funds in the future.   The
Directors, having taken advice, consider the proposals to be in the best
interests of creditors and shareholders.

AIM flotation and launch of Ideal World

2000 started with the heavy workload associated with the flotation of the
Company on  the Alternative Investment Market that took place in February 2000
raising £6.9 million (net of expenses) by way of a placing.  The proceeds of
the placing, taken together with other external finance, provided the funding
required to purchase land in Peterborough and build a fully equipped call
centre, warehouse, TV studio and administrative offices necessary to operate
our round-the-clock TV Home Shopping Channel, Ideal World, as well as our
traditional mail order catalogue business.

The immediate challenge after the flotation was to ensure that the Company was
in a position to commence TV transmission.  This involved the recruitment of
168 staff to install and operate a wide range of specialised TV equipment.  I
am pleased to report that on 17 April Ideal World was launched on time and
immediately began making sales.  TV sales have since grown rapidly, helped by
an expanded product offering.

The management team has been strengthened by the recruitment of personnel in
the areas of logistics, management information systems and finance.
Notwithstanding these new appointments, senior management were stretched in
establishing the TV shopping business and our traditional catalogue business
suffered as a result.  The Company is continuing to strengthen management in
key areas of the business.


Fire

On 6 March 2001 a catastrophic fire took place, which destroyed our offices,
warehouse and broadcasting studios and has caused massive disruption to both
the catalogue and TV businesses.  Our share quotation was immediately
suspended. The Company is fully insured and the insurers have accepted
liability.  Interim payments have been received but the timing and extent of
future payments remains uncertain. A further equity fundraising may be
required in the event that insurance payments do not occur as forecast.  There
can be no certainty regarding the availability of such equity funds in the
future.

Through the incredible efforts of our management team and workforce, I am
pleased to report that the businesses were re-established in a very short
period of time and although the trading performance for 2001 will be affected
by the disruption, subsequent sales have proved very encouraging and indicate
the loyal nature of our customer base.

Ideal World (Channel 638)

Our initial broadcasting via digital satellite was to a target market of three
million homes for four hours a day.  As training and experience levels within
broadcasting became established, we were able to expand the number of 'live'
hours from 4 to 16 by the end of July 2000, with the periods of live
transmission running from 9 a.m. to 1 a.m.  During the 'owl' hours, repeats of
the previous day's best shows were broadcast.

The Channel output is quintessentially British and focused on providing a wide
variety of products presented in an entertaining and appealing way, building
on three basic principles: family, friendship and fun.  The products sold in
the first few months were unusual and diverse, and included an Audi TT motor
vehicle and dinosaur fossils over 70 million years old.  We also helped launch
a pop group.  Many other more traditional products were sold too, ranging from
jewellery to specialist health and beauty products.

The sales performance of Ideal World, which was above our initial
expectations, demonstrated an audience acceptance and uptake of our style of
presentation and wide product offering. As the year progressed, month on month
growth of sales continued to reinforce the viability of our proposition and
firmly established Ideal World as a major player in the TV home shopping
arena.  By the year end we had acquired 120,000 new customers - in itself a
very laudable result but what is also very encouraging is that the average
order value is over £30 and our customer base is showing a propensity to
repeat purchase, which confirms that we have established a particular niche
for Ideal World.

Our own research shows that over 500,000 households regularly tune into Ideal
World to shop.  Already we have sold product to approximately 2.7% of digital
households with significant numbers of new customers buying for the first time
every day, but we continue to be faced with the challenge of identifying new
products to satisfy a growing demand.  We are reviewing the merchandising and
buying functions, and will further strengthen this important area of
management by the recruitment of additional staff with the skills to identify
and efficiently purchase appropriate merchandise to meet the growth
opportunities of the business.

During the year a number of new shopping channels were launched.  We believe
that the more channels there are, the more credibility the genre will gain and
the variety and choice on offer encourages more people to shop via TV for the
first time.  Further, once people have shopped and are happy with service,
price and quality, they quickly become repeat customers.

As digital TV penetration increases, we believe that this will promote a
culture of TV home shopping.  Live interactive TV is unlike the Internet - it
is proactive and the most pervasive and persuasive  method of selling a
diverse range of goods and services.

We intend to ensure that Ideal World maintains a significant and growing
presence in this dynamic and high growth market.  Consequently we are seeking
to widen our potential customer base by adding transmission networks,
including cable.  Approximately 20% of the UK market has already converted to
digital TV via satellite, cable or terrestrial.  The Government remains
committed to accelerating the rate of digital take up. It is predicted that a
shutdown of traditional analogue broadcasting will take place by 2005 or 2006.
The growth prospects for TV shopping are therefore encouraging.

Catalogue Business

As I mentioned in our interim statement published in September 2000, the
market for our catalogue business has proved to be difficult, with little
growth in sales (compared to 1999) and falling margins.  Distribution costs
for our catalogues increased, as there was greater demand in the 'insert'
market by 'dot.coms' turning to traditional routes to market.  This resulted
in a hardening of distribution rates by the media.  We rapidly expanded our
call centre and warehouse operations in the crucial period of September,
October and November, but because of higher than forecast TV sales, a number
of catalogue orders were lost due to a lack of capacity, which added to the
difficulties of the catalogue business.

Although the TV business was established on the back of the Company's existing
catalogue infrastructure, the size and nature of the venture was similar to a
start up. Management time over the year became stretched and the performance
of the catalogue division suffered in an already competitive market. Whilst we
believe the catalogue division is fundamentally profitable, we have recognised
that the amount of management resource required to return it to profitability
would be detrimental to the development of Ideal World TV, which we see as a
more cost-effective use of our resources.  Consequently the decision has been
taken by the Board to dispose of the catalogue division as soon as
practicable.

Staff

I am delighted with the professional and flexible approach that has been
demonstrated by our employees in very difficult circumstances, particularly
following the fire, and would like to thank all staff for their considerable
efforts, support and continued contribution to the business.

Peter Ridsdale had been Chairman of the Company prior to the flotation but in
view of his other very considerable commitments, he decided to step down as
Chairman and Director on 3 July 2001.  The Board has started the process of
identifying a successor.  In the meantime I will be acting as Chairman and
Chief Executive.  I would like to thank Peter for his valuable contribution to
the business.

Conclusion

The results of the Company's first year of trading as a TV home shopping
channel have been encouraging. Trading in the first half of 2001 has clearly
been significantly affected by the impact of the fire, though I am pleased by
the subsequent sales levels as the business is being re-established.  Whilst
it will inevitably take time to rebuild our premises, and fully re-establish
the business, I remain confident about the future prospects of Ideal Shopping
Direct.  I would like to take this opportunity to thank our shareholders and
suppliers for their support during the difficult period following the fire and
hope that the future proves to be rewarding.

Paul C Wright

Chairman and Chief Executive



CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2000

                                                         2000        1999
                                                         £'000       £'000

Turnover: continuing operations                               16,355      9,713

Cost of sales                                               (12,518)    (6,879)

Gross profit                                                   3,837      2,834

Distribution costs                                             (897)      (774)

Administration expenses                                      (8,720)    (1,640)

Net operating expenses                                       (9,617)    (2,414)

Operating (loss)/profit: continuing operations               (5,780)        420

Net interest                                                   (190)         31

(Loss)/profit on ordinary activities before taxation         (5,970)        451

Taxation                                                         146      (135)

(Loss)/profit for the financial year                         (5,824)        316

Dividends                                                          0      (100)

Retained (loss)/profit                                       (5,824)        216

Basic earnings per share                                     (30.4)p       2.1p

Diluted earnings per share                                   (30.4)p       2.1p



CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2000

                                              2000    2000    1999    1999
                                              £'000   £'000   £'000   £'000

Fixed assets
Intangible assets                                   0               5
Tangible assets                                 7,086           3,317

Total fixed assets                                      7,086           3,322

Current assets
Stocks                                          1,981             801
Debtors                                           525           1,295
Cash                                            3,851             881

                                                6,357           2,977

Creditors: amounts falling due within one     (7,287)         (2,744)
year


Net current (liabilities)/assets                        (930)             233

Total assets less current liabilities                   6,156           3,555

Creditors: amounts falling due                        (3,811)         (2,308)
after more than one year

Provisions for liabilities and charges                  (190)           (174)

                                                        2,155           1,073

Capital and reserves
Called up share capital                                   598             450
Share premium                                           6,758               0
Profit and loss account                               (5,201)             623

Shareholders' funds                                     2,155           1,073



CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2000

                                                                 2000   1999
                                                                 £'000  £'000

Net cash (outflow)/inflow from operating activities              (1,391) 33

Returns on investments and servicing of finance
Interest received                                                258    31
Interest paid                                                    (227)  0
Finance lease interest paid                                      (221)  0

Net cash (outflow)/inflow from returns on investments and        (190)  31
servicing of finance

Taxation                                                         0      0

Capital expenditure
Purchase of tangible fixed assets                                (1,803) (3,194)
Sale of tangible fixed assets                                    2      104

Net cash outflow from capital expenditure                        (1,801) (3,090)

Acquisitions and disposals
Cash from purchase of subsidiary undertaking                     0      1,040

Equity dividends paid                                            0      (150)

Financing
Issue of shares                                                  7,505  0
Expenses paid in connection with share issues                    (599)  0
Receipts from borrowings                                         171    2,394
Repayments of borrowings                                         (128)  0
Capital element of finance lease payments                        (591)  0

Net cash inflow from financing                                   6,358  2,394

Increase in cash                                                 2,976  258



Notes

1.     Basis of preparation

The financial information herein does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985.  The financial information
has been extracted from the Company's 2000 statutory financial statements.

As set out in the Chairman and Chief Executive's Statement, on 6 March 2001 a
fire substantially destroyed the Company's TV studio, offices and warehouse
premises from which the Company traded.  The Company's insurers have accepted
liability and a number of interim payments have been received.  The balance of
the claim is currently being assessed.  Following the fire and the resulting
disruption to the business the Directors have prepared cash flow information
for the period ending 31 December 2002 and consider that the Company will
continue to operate within its available resources in that period.
Fundamental assumptions contained within these forecasts include the timing
and extent of payments from the Company's insurers (particularly in relation
to the Business Interruption policy), assumed funds from the proposed placing
of shares and the proposed rescheduling of certain creditor payments.  As a
consequence of these uncertainties a further raising of equity may be required
in the event that insurance payments do not occur as forecast.  There can be
no certainty regarding the availability of such equity funds in future.
Whilst the Directors are presently uncertain as to the outcome of these
matters, they believe that it is appropriate for the financial statements to
be prepared on the going concern basis.  If the assumptions outlined above are
not achieved then the consolidated profit and loss account and balance sheets
would be materially different.

The audit report on the financial statements for the year ended 31 December
2000 draws attention to the basis of preparation of those financial statements
as outlined above, but it is not qualified in this respect.

2.     Earnings per share

The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year as adjusted for the subdivision of shares
on 8 February 2000, whereby each of the issued and un-issued shares of £1 each
in the capital of the Company were subdivided into 33 ordinary shares of 3p
each and 1 deferred share of 1p each.  'A' ordinary shares have been included
in this calculation as they were converted into ordinary shares of £1 each on
21 January 2000.

The calculation of diluted earnings per share is based on the basic earnings
per share adjusted to allow for the issue of shares on the assumed conversion
of dilutive options.

Reconciliation of the earnings and weighted average number of shares used in
the calculations are set out below:
                                              2000 Weighted average
                                                   number of shares
                                Earnings                              Per share
                                                                         amount
                                £'000                  000's              pence

Earnings attributable to        (5,824)               19,133             (30.4)
ordinary shareholders

Anti-dilutive effect of
securities:
Options                         0                     24                  0

Diluted earnings per share      (5,824)               19,157             (30.4)


                                              1999 Weighted average
                                                   number of shares
                                Earnings                              Per share
                                                                         amount

                                £'000                000's            pence

Earnings attributable to        316                  14,778           2.1
ordinary shareholders

Dilutive effect of securities:
Options                         0                    430              0

Diluted earnings per share      316                  15,208           2.1



3.     Reconciliation of movements in shareholders' funds
                                                                 2000      1999
                                                                £'000     £'000

(Loss)/profit for the financial year                    (5,824)       316
Dividends                                               0             (100)

                                                        (5,824)       216
Issue of shares in the year                             6,906         200

Net increase in shareholders' funds                     1,082         416
Shareholders' funds at 1 January 2000                   1,073         657

Shareholders' funds at 31 December 2000                 2,155         1,073

Attributable to:
Equity shareholders                                     2,155         1,073



4.     Net cash (outflow)/inflow from operating activities
                                                                  2000     1999
                                                                 £'000    £'000

Operating (loss)/profit                                     (5,780)    420
Depreciation                                                592        36
Amortisation                                                5          1
Profit on sale of fixed assets                              (1)        (24)
Increase in stocks                                          (1,180)    (128)
Decrease/(increase) in debtors                              770        (218)
Increase/(decrease) in creditors                            4,203      (54)

Net cash (outflow)/inflow from operating activities         (1,391)    33



5.     Dividend

The directors do not recommend the payment of a dividend.

6.     Other information

Copies of the annual report and accounts have been sent to shareholders.

Due to difficulties as a result of the fire as detailed above, the publication
of the annual report and accounts was delayed.

Contact:

GRANT THORNTON

Gerry Beaney (Nominated Adviser)   020 7383 5100