Interim Results

InterX PLC
7 March 2001

                                  INTERX PLC

                  Second Quarter ('Q2') and Interim Results

                  Three and Six months ended 2 February 2001



HIGHLIGHTS


  * Turnover for Q2 was £1.9 million (Q1: £2.0 million)

  * Provision for losses on existing contracts of £1.6 million

  * Operating loss, before amortisation of goodwill, for Q2 was £7.7 million
    (Q1: £5.4 million)

  * Amortisation of goodwill in Q2 was £10.2 million (Q1:£10.2 million)

  * Loss before tax for Q2 was £19.1 million (Q1: £14.2 million)

  * Loss per share in Q2, before amortisation of goodwill and (Q1 only)
    exceptional items, was 25.42p (Q1: 16.97p)

  * Loss per share in Q2 was 54.62p (Q1: 40.75p)

  * Provision for restructuring costs of £1.6 million in Q3

  * Cash at end of Q2 was £26.0 million (Q1: £34.4 million)

  * Results of strategic review to be delivered on 27 March 2001





Simon Barker, Chief Executive, commented:

'These results show why, in the last three weeks, the Board has taken the
actions that it has.

The fundamentals of the business remain strong - we have the technology, the
resources and the people to deliver a strategy that will return growth and
profitability in the medium and long term.'





                                    -ends-

For further information, please contact:

InterX plc

020 8817 4409

Simon Barker

Simon Miesegaes

Citigate Dewe Rogerson

020 7638 9571

Freida Davidson

Georgina Peiser





                                  INTERX PLC

                            Second Quarter Results

                      Three months ended 2 February 2001



                             Chairman's Statement



The Board today announces the Group's results for the three months ending 2
February 2001 ('Q2').

Although, the results are broadly in line with published milestones and
internal budgets, this has been achieved at the cost of putting on hold
internationalisation and other expansion plans. Further, the Board is not
satisfied with the rate of progress to date.

Key highlights are:


  * Turnover and Operating loss for Q2, before amortisation of goodwill,
    were £1.9 million and £7.7 million respectively (Q1: £2.0 million and £5.4
    million);

  * Provision for losses on existing contracts of £1.6 million has been
    made;

  * Loss on ordinary activities before tax for Q2 was £19.1 million (Q1: £
    14.2 million);

  * Loss per share in Q2, before amortisation of goodwill and (Q1 only)
    exceptional items, was 25.42p (Q1:16.97p);

  * Loss per share in Q2 was 54.62p (Q1: 40.75p);

  * Provision for restructuring costs of £1.6 million in Q3 is to be made;
    and

  * Cash at the end of Q2 was £26.0 million (Q1: £34.4 million).



The last three weeks, however, have been a period of considerable upheaval in
the business, not least with the resignation of its Chief Executive, on 14
February 2001, and the announcement, on 27 February 2001, of significant job
cuts.

I should like to thank all our employees for their resilience and support
through what has been a difficult and testing time.

Prospects

The continuing and ongoing investment by our customers proves that the quality
and value of our technology is not in doubt. The commitment of our employees
and their desire for success is a significant asset of the business. Together
with our considerable cash reserves, these assets will provide a platform for
future growth.

We announced, on 14 February 2001, that our new Chief Executive, Simon Barker,
is leading a strategic review of the business. The results of this review,
which will include proposals relating to the Company's Share Option Schemes,
will be announced on 27 March 2001.

Simon Barker was one of the original founders of Ideal Hardware in 1986, since
when he has been both Finance Director and Operations Director of the Group.
His experience and skills are wholly appropriate for this business.

I would like to assure our shareholders that the actions taken by the Board
have been necessary to secure the future success of the Group. The Board is
confident that Simon Barker will develop and deliver a strategy that will do
justice to our shareholders and employees and enable us amply to repay their
loyalty and trust.





Richard Jewson

7 March 2001





Operating Review

Sales

The period has witnessed a significant reduction in the level of investment by
companies in new e-business projects. This is a result of both the
reassessment of IT budgets within larger, more established businesses and the
failure of new e-businesses to secure sufficient funding.

Accordingly, sales opportunities have been reduced, sales lead times have been
extended and competitive pricing pressures have increased.

Within this environment the Company failed to conclude any of its major sales
prospects during Q2. It has, however, met its milestone commitment of three
new customers, through a combination of selling software to two of its
development and integration partners and securing consultancy services, in the
form of scoping agreements, to two other companies.



Services

The Group saw a significant increase in losses associated with the
implementation of projects. To date, InterX has had the principal
responsibility for all project deliverables, irrespective of the involvement
of an integration partner in a project. Accordingly, any errors made in
scoping or implementing the projects have been to the Group's account. Such
losses have been exacerbated by the significant detrimental impact of
competitive commercial pressures on pricing.



Employees

In expectation of significant growth, investment in recruitment and associated
expenditure continued during Q2. Staff levels increased by 20 to 176 (5
November 2000: 156). On 27 February 2001 the Company announced that it was
reducing its head count by some 25%. This, together with other initiatives, is
expected to reduce annualised staff-related costs by over 40%.

It is appropriate that we take this opportunity to express our regret to those
employees affected and to wish them well.





Financial Review



Profit and Loss Account

The Group's results to 5 August 2000 included the results of Ideal Hardware
and accordingly are not appropriate for comparative purposes. The results for
the three months ended 2 February 2001 ('Q2') are the Group's second set of
full quarterly results as a software business, and accordingly, it is
appropriate to compare these results with the results for the three months
ended 5 November 2000 ('Q1').

Product Licences

Product licence revenues in Q2 were £463,000 (Q1: £700,000) and can be
analysed as follows:


  * Q2 product licence revenue was derived from licence sales to Diligenti
    Limited ('Diligenti'), an associated company, Silicon.com, which is a
    related party under FRS8 criteria, and to another existing customer in
    respect of the resale of an Oracle licence. In relation to the revenue
    derived from the sale of a licence to Diligenti, adjustment has been made
    for that element of the cost in Diligenti's accounts which relates to
    InterX's shareholding of 34%.


        In relation to our customer milestones, licence sales were also made
        to two of our development partners; these revenues have been deferred
        on the basis that both sales are linked to the purchase of services
        from our development partners. Scoping agreements were signed with two
        other customers; and


  * Q1 product licence revenues were derived from two licence sales; one to
    ComputerWeekly.com Limited, an associated company, and the other to
    Totaljobs.com.


        In relation to our customer milestones, two additional customer wins
        were secured in the form of scoping agreements; of these, one was with
        Diligenti, an associated company.

Services

The gross loss on services in Q2 of £2.8 million (Q1: £629,000) includes a
provision of £1.6 million in respect of future losses which are expected to be
incurred on current customer contracts.

National Insurance on Share Options

The provision of £89,000, made in Q1 in respect of the Company's National
Insurance liability on unrealised gains on options issued under the Company's
Share Option Scheme, has been reversed in Q2 since this liability no longer
exists.

Amortisation of Goodwill

The charge of £10.2 million in both Q1 and Q2 is in respect of the
amortisation of goodwill, created upon the acquisition of Cromwell Media
Limited by InterX in April 2000. The Board has considered the carrying value
of goodwill at 2 February 2001 for impairment purposes and has concluded that
no write down is appropriate.

Associated Companies

The Company's share of losses of associated undertakings in Q2 was £1.8
million (Q1: £984,000). During Q2, Diligenti secured its second round of
funding resulting in a dilution in our shareholding in that Company.
Accordingly a disposal by InterX of 3.5% of our holding to 34% is deemed to
have taken place; the associated gain of £3.4 million has been shown in the
Group Statement of Total Recognised Gains and Losses.

Profit on Sale of Fixed Assets

The profit on the sale of fixed assets (an exceptional item) represents the
sale in Q1 of the properties occupied by Ideal Hardware to Bell Microproducts
Inc.

Interest Receivable

Interest receivable on our cash deposits was £653,000 in Q2 compared to £
485,000 in Q1, the increase reflecting primarily the receipts of the proceeds
from the sale of the properties for £16 million at the end of Q1.

Taxation

No credit has been taken in respect of the tax losses currently being
generated.



Balance Sheet

Goodwill reduced to £170.1 million at the end of Q2 from £180.3 million at the
end of Q1 reflecting the charge of £3.4 million per month calculated on the
basis of the goodwill being amortised over 5 years.

Tangible assets increased from £3.8 million in Q1 to £5.5 million in Q2
reflecting primarily the development of our offices at Brentford.

Investments increased to £5.1 million in Q2 from £3.9 million in Q1 reflecting
the following:


  * our share of losses of £1.8 million in respect of our associated
    companies; and

  * our share of the increase in the net assets of Diligenti following its
    successful second round funding exercise; this gain is shown in the
    Statement of Total Recognised Gains and Losses.

Our total share of losses from our associated companies, excluding the
recognised gain, in the full six months was £2.8 million.

Included within Current Assets in Q2 is £13.3 million (Q1: £9.9 million), in
respect of funds provided to our associated company, Diligenti, in accordance
with the loan facility agreement. Also included is the net deferred
consideration from the sale of Ideal Hardware of £1.3 million (Q1: £1.3
million) and £5.4 million (Q1: £5.4 million) in respect of the deposit
provided in connection with the lease we have taken on our premises in
Brentford.



Cash Flow

At the end of Q2 and Q1, cash amounted to £26.0 million and £34.4 million
respectively. The principal movements in Q2 were:


  * a £4.3 million outflow in respect of trading activities ; and

  * a £3.4 million outflow in respect of the Diligenti loan facility.





Restructuring Provision

The costs associated with the restructuring of the Company, including the cost
of redundancies and the anticipated termination payment to Philip Crawford,
are expected to be approximately £1.6 million; these will be charged to the
profit and loss account in Q3.





INTERX PLC

Group Profit and Loss Account

for the three month period ended 2 February 2001
               Notes    13 weeks    13 weeks     26 weeks    27 weeks     Year
                         ended 2     ended 5      ended 2     ended 5  ended 5
                        February    November     February    February   August
                            2001        2000         2001        2000     2000
                     (unaudited) (unaudited)  (unaudited) (unaudited) (audited)
                           £'000       £'000        £'000       £'000    £'000
Turnover
Product                      463         700        1,163           -      400
licences
Services                   1,434       1,301        2,735           -    1,417
Other -                        -           -            -     200,546  401,328
discontinued
operations
                     ----------- -----------  ----------- ----------- ----------
                 2         1,897       2,001        3,898     200,546  403,145
Cost of sales
Product                     (65)           -         (65)           -        -
licences
Services                 (4,206)     (1,930)      (6,136)           -      (25)
Other -                        -           -            -   (185,785) (372,425)
discontinued
operations
                     ----------- -----------  ----------- ------------- --------
                         (4,271)     (1,930)      (6,201)   (185,785) (372,450)
                     ----------- -----------  ----------- ------------- --------
Gross profit
Product                      398         700        1,098           -      400
licences
Services                 (2,772)       (629)      (3,401)           -    1,392
Other                          -           -            -      14,761   28,903
                     ----------- -----------  ----------- ------------- --------
                 2       (2,374)          71      (2,303)      14,761   30,695
                     ----------- -----------  ----------- ------------- --------
Other                          -           -            -         994    1,430
operating
income
                     ----------- -----------  ----------- ------------- --------
Overheads
- Research and             (873)       (647)      (1,520)           -        -
development
- Sales and              (1,401)     (1,197)      (2,598)
marketing
- General,               (3,175)     (3,566)      (6,741)    (14,691) (36,188)
administrative
and
distribution
costs
- National       3            89        (89)            -           -        -
insurance on
share options
- Ideal          3             -           -            -           -    (467)
restructuring
- Purchase of    3             -           -            -           -    (603)
domain name
- IT Network     3             -           -            -           -  (1,359)
write off of
website
- Amortisation          (10,207)    (10,207)     (20,414)           - (13,609)
of goodwill
                     ------------ ------------ ------------ ------------ -------
                        (15,567)    (15,706)     (21,273)    (13,609) (52,226)
                     ------------ ------------ ------------ ------------ -------
Operating                (7,734)     (5,428)     (13,162)       1,064  (6,492)
(loss)/profit
before
amortisation
of goodwill
Amortisation            (10,207)    (10,207)     (20,414)           - (13,609)
of goodwill
                     ------------ ------------ ------------ ------------ -------
Operating        2      (17,941)    (15,635)     (33,576)       1,064 (20,101)
(loss)/profit
Share of                 (1,805)       (984)      (2,789)       (185)    (445)
results of
associated
undertakings
Profit on sale   4             -       1,905        1,905           -        -
of fixed
assets
Profit on sale   4             -           -            -           -      400
of subsidiary
undertaking
                     ------------ ------------ ------------ ------------ -------
(Loss)/profit           (19,746)    (14,714)     (34,460)         879  (20,146)
on ordinary
activities
before
interest
Interest                     653         485        1,138           -      759
receivable
Interest                     (2)         (1)          (3)       (428)   (1,233)
payable
                     ------------ ------------ ------------ ------------ -------
(Loss)/profit           (19,095)    (14,230)     (33,325)         451  (20,620)
on ordinary
activities
before
taxation
Tax on (loss)/   5             -           -            -       (184)      153
profit on
ordinary
activities
                     ------------ ------------ ------------ ------------ -------
(Deficit)/       7      (19,095)    (14,230)     (33,325)         267  (20,467)
profit for the
period
                     ------------ ------------ ------------ ------------ -------



INTERX PLC

Group Profit and Loss Account

for the three month period ended 2 February 2001
                   13 weeks      13 weeks      26 weeks      27 weeks     Year
                    ended 2       ended 5       ended 2       ended 5  ended 5
              February 2001 November 2000 February 2001 February 2000   August
                (unaudited)   (unaudited)   (unaudited)   (unaudited)     2000
                                                                      (audited)
(Loss)/            (54.62p)      (40.75p)      (95.37p)         1.26p (79.69p)
earnings per
share (basic
and fully
diluted)
Less :
exceptional
items and
amortisation
of goodwill
(net of
taxation)
Amortisation         29.20p        29.23p        58.43p             -   52.99p
of goodwill
Ideal                     -             -             -             -    1.82p
restructuring
costs
Purchase of               -             -             -             -    2.35p
domain name
IT Network                -             -             -             -    5.29p
write off of
website
Profit on                 -       (5.45p)       (5.45p)             -        -
disposal of
fixed assets
Profit on                 -             -             -             -  (1.56p)
sale of
discontinued
operations
                  ---------     ---------     ---------     --------- --------
(Loss)/            (25.42p)      (16.97p)      (42.39p)         1.26p (18.80p)
earnings per
share before
exceptional
items and
amortisation
of goodwill
                  ---------     ---------     ---------     --------- --------
Group
Statement of
Total
Recognised
Gains and
Losses
for the three
month period
ended 2
February 2001
                      £'000         £'000         £'000         £'000    £'000
                  ---------     ---------     ---------     --------- --------
(Deficit)/         (19,095)      (14,230)      (33,325)           267 (20,467)
profit for
the period
Deemed                3,422             -         3,422             -        -
disposal of
part of
interest in
associated
undertaking
                  ---------     ---------     ---------     --------- --------
Total              (15,673)      (14,230)      (29,903)           267 (20,467)
recognised
gains and
losses during
the period
                  ---------     ---------     ---------     --------- --------

The turnover and operating loss for the period arose from continuing
operations.

The results for the 27 weeks ended 5 February 2000 and year ended 5 August
2000 include results from the distribution business that was sold on 3 August
2000.





 INTERX PLC

Group Balance Sheet

At 2 February 2001
                                                   At 2         At 5       At 5
                                               February     November     August
                                                   2001         2000       2000
                                     Notes  (unaudited)  (unaudited)  (audited)
                                                  £'000        £'000      £'000
Fixed Assets
Goodwill                                        170,112      180,319    190,526
Intangible assets                                   126          183        212
Tangible assets                                   5,471        3,854     15,965
Investments                                       5,097        3,152      4,136
                                              ---------    ---------  ---------
                                                180,806      187,508    210,839
Current Assets
Trade debtors                                     1,986        2,867      1,574
Loan to associated undertaking                   13,256        9,856          -
Other debtors                                     9,783        8,941      7,772
Cash at bank, in hand and term                   25,997       34,398     34,504
deposits
                                              ---------    ---------  ---------
                                                 51,022       56,062     43,850
Creditors: amounts falling due                  (13,075)     (11,050)    (8,323)
within one year
                                              ---------    ---------  ---------
Net Current Assets                               37,947       45,012     35,527
                                              ---------    ---------  ---------
Total assets less current                       218,753      232,520    246,366
liabilities
Creditors: amounts falling due after                (48)        (152)       (68)
more than one year
Provisions for liabilities and                   (1,930)            -          -
charges
                                              ---------    ---------  ---------
                                                216,775      232,368    246,298
                                              ---------    ---------  ---------
Capital and Reserves
Called up share capital                           1,750        1,748      1,742
Share premium account                            55,757       55,679     55,385
Capital redemption reserve                           31           31         31
Other reserves                                  198,066      198,066    198,066
Profit and loss account                        (38,829)     (23,156)    (8,926)
                                              ---------    ---------  ---------
Equity Shareholders' Funds             7        216,775      232,368    246,298
                                              ---------    ---------  ---------





INTERX PLC

Group Cashflow Statement

for the three month period ended 2 February 2001
             Notes  13 weeks ended  13 weeks ended  26 weeks ended     Year
                   2 February 2001 5 November 2000 2 February 2001  ended 5
                       (unaudited)     (unaudited)     (unaudited)   August
                                                                       2000
                                                                   (audited)
                             £'000           £'000           £'000    £'000
Net cash       8           (4,364)         (5,467)         (9,831) (34,742)
outflow from
operating
activities
                         ---------       ---------       --------- --------
Returns on
investments
and
servicing of
finance
Interest                       588             474           1,062      759
received
Interest                       (2)             (1)             (3)  (1,378)
paid
                         ---------       ---------       --------- --------
Net cash                       586             473           1,059    (619)
inflow/
(outflow)
from returns
on
investments
and
servicing of
finance
                         ---------       ---------       --------- --------
Taxation                         -               -               -    (468)
                         ---------       ---------       --------- --------
Capital
expenditure
and
financial
investment
Purchase of                      -               -               -     (81)
intangible
fixed assets
Purchase of                (1,534)         (1,551)         (3,085)  (3,668)
tangible
fixed assets
Sale of                        245          16,000          16,245       39
tangible
fixed assets
Loan to                    (3,400)         (9,856)        (13,256)        -
associated
undertaking
Purchase of                      -               -               -    (663)
trade
investment
Sale of                          -               -               -      663
trade
investment
                         ---------       ---------       --------- --------
Net cash                   (4,689)           4,593            (96)  (3,710)
(outflow)/
inflow from
capital
expenditure
                         ---------       ---------       --------- --------
Acquisitions
and
disposals
Purchase of                      -               -               -  (2,832)
subsidiary
undertaking
Net cash                         -               -               -      384
acquired
with
subsidiary
undertaking
Disposal of                      -               -               -   11,597
subsidiary
undertaking
Net                              -               -               -   19,935
overdraft
sold with
subsidiary
undertaking
Investment                       -               -               -  (6,634)
in
associated
undertakings
                         ---------       ---------       --------- --------
Net cash                         -               -               -   22,450
inflow from
disposals
and
acquisitions
                         ---------       ---------       --------- --------
Equity                           -               -               -  (1,695)
dividends
paid
                         ---------       ---------       --------- --------
Net cash                   (8,467)           (401)         (8,868) (18,784)
outflow
before
management
of liqud
resources
and
financing
                         ---------       ---------       --------- --------
Management
of liquid
resources
Cash placed               (20,008)               -        (20,008)        -
on term
deposits
                         ---------       ---------       --------- --------
Financing
Repayment of                     -               -               -  (7,861)
loans
Issue of                        80             300             380   52,953
ordinary
share
capital
Capital                       (14)             (5)            (19)     (45)
element of
finance
lease rental
payments
                         ---------       ---------       --------- --------
Net cash                        66             295             361   45,047
inflow from
financing
                         ---------       ---------       --------- --------
(Decrease)/               (28,409)           (106)        (28,515)   26,263
increase in
cash in the
period
                         ---------       ---------       --------- --------





Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash in the period     (28,409)   (106) (28,515)  26,263
Net cash outflow from decrease in debt             14       5      19     7,906
Net cash outflow from increase in liquid       20,008       -  20,008       -
resources
                                          --------- --------- --------- --------
Change in net funds resulting from cash       (8,387)   (101) (8,488)   34,169
flows
New finance leases                                  -       -       -    (250)
Finance leases acquired with subsidiary             -       -       -    (136)
undertaking
Finance leases sold with subsidiary                 -       -       -     238
undertaking
Arrangement fee amortisation                        -       -       -     (67)
                                         --------- --------- --------- ---------
Movement in net funds in the period           (8,387)   (101) (8,488)  33,954
Net funds at start of period                9  34,300  34,401  34,401     447
                                         --------- --------- --------- ---------
Net funds at end of period                  9  25,913  34,300  25,913  34,401
                                         --------- --------- --------- ---------




INTERX PLC

For the three month period ended 2 February 2001

Notes
1.  Basis of preparation
    The comparative figures for the year ended 5 August 2000 have been
    extracted from the Group's statutory accounts to that date; these received
    an unqualified audit report, did not contain a statement under section 237
    (2) or 237(3) of the Companies Act 1985 and have been filed with the
    Registrar of Companies. This preliminary statement, which is unaudited and
    does not constitute statutory accounts, has been prepared on the basis of
    the accounting policies laid down in those statutory accounts.

2   Segmental information
    The Group has no material operations other than those in the UK. Turnover,
    gross and operating profit for the three month period ended 2 February
    2001 related to the Technology business of product licences and associated
    services, with no material turnover to overseas customers.The turnover and
    operating loss for InterX Technology Limited for the year ended 5 August
    2000 were £3.2m (1999:£2.2m) and £1.7m (1999; profit:£152,000)
    respectively. Turnover and gross profit for the 27 weeks ended 5 February
    2000 and the year ended 5 August 2000 were as follows:



                  27 weeks ended 5 February 2000 (unaudited)
                               Electronic  Parent Technology Distribution Total
                                  Product Company
                             Intelligence
                                    £'000   £'000      £'000       £'000   £'000
 Turnover                             500       -          -     200,046 200,546
                             -------- --------   --------     -------- --------
 Gross profit                         218       -          -       14,543 14,761
                             -------- --------   --------     -------- --------
 Operating (loss)/profit          (2,023)   (770)          -        3,857 1,064
 before exceptional items
 and amortisation of
 goodwill
                             -------- --------   --------     -------- --------
 Operating (loss)/profit          (2,023)   (770)          -        3,857 1,064
 after exceptional items and
 amortisation of goodwill
                              -------- --------   --------     -------- --------





                      Year ended 5 August 2000 (audited)
                              Electronic  Parent Technology Distribution Total
                                 Product Company
                            Intelligence
                                   £'000   £'000      £'000        £'000 £'000
Turnover                           1,280       -      1,817      400,048 403,145
                                -------- --------   --------     -------- ------
Gross profit                         720       -      1,792       28,183 30,695
                                -------- --------   --------     -------- ------
Operating (loss)/profit          (4,494) (2,737)    (1,132)        4,300 (4,063)
before exceptional items
and amortisation of
goodwill
                                -------- --------   --------     -------- ------
Operating (loss)/profit          (5,853) (3,340)   (14,741)       3,833 (20,101)
after exceptional items
and amortisation of
goodwill
                                -------- --------   --------     -------- ------



Turnover and gross profit by destination were as follows:

                  27 weeks ended 5 February 2000 (unaudited)
                                     UK              Europe               Total
                                  £'000               £'000               £'000
Turnover                        178,127              22,419             200,546
                              ---------           ---------           ---------
Gross profit                     13,933                 828              14,761
                              ---------           ---------           ---------
Margin                             7.8%                3.7%                7.4%



                      Year ended 5 August 2000 (audited)
                                     UK              Europe               Total
                                  £'000               £'000               £'000
Turnover                        356,673              46,472             403,145
                              ---------           ---------           ---------
Gross profit                     29,154               1,541              30,695
                              ---------           ---------           ---------
Margin                             8.2%                3.3%                7.6%


3.  Exceptional items reported before operating loss
    The National Insurance credit on share options in the quarter ended 2
    February 2001 reverses the provision required at 5 November 2000 to cover
    National Insurance on the excess of the market value over the exercise
    price of share options granted and this provision was released in the
    second quarter.
    The Ideal Hardware restructuring costs in the year ended 5 August 2000
    arose from redundancy programmes which were implemented.
    The purchase of the interx.com domain name in the year ended 5 August 2000
    was charged to the profit and loss account.
    In the year ended 5 August 2000 the IT Network costs relate to the
    impairment of the website development, previously capitalised.

4.  Profit on sale of subsidiary undertaking/profit on disposal of fixed
    assets
    The profit on sale of subsidiary undertaking relates to the disposal of
    the group's interest in the ordinary share capital of Ideal Hardware
    Limited ('Ideal').
    The profit on disposal of fixed assets relates to the disposal of two
    properties occupied by Ideal to the owners of Ideal.


5.  Taxation
    The taxation (charge)/credit for the period has been calculated at an
    estimated tax rate of 31%.

6.  (Loss)/earnings per share
    The basic and fully diluted (loss)/earnings per share for the period is
    based on the (loss)/profit attributable to the weighted average of
    34,959,473 (5 November 2000 : 34,924,226; 5 February 2000 : 21,227,188; 5
    August 2000 : 25,682,338) ordinary shares in issue during the period.

7.  Share capital and reserves
    Movements in share capital and reserves were as follows:

                             Share   Share    Capital    Other    Profit Total
                           capital premium redemption reserves  and loss
                                              reserve            account
                              £'000   £'000      £'000   £'000     £'000 £'000
At 6 August 2000             1,742  55,385         31  198,066  (8,926) 246,298
Issues of shares                 6     294          -       -         -     300
Deficit for the period           -       -          -       -  (14,230) (14,230)
                            -------- --------   -------- --------  -------- ----
At 5 November 2000           1,748  55,679         31  198,066  (23,156) 232,368
Issues of shares                 2      78          -       -        -       80
Deficit for the period          -       -          -        -  (19,095) (19,095)
Gain from deemed disposal       -       -          -        -     3,422   3,422
of part of interest in
associated undertaking
                            -------- --------   -------- --------  -------- ----
At 2 February 2001          1,750  55,757         31  198,066  (38,829) 216,775
                            -------- --------   -------- --------  -------- ----






8.  Reconciliation of operating loss to net cash flow from operating
    activities:
                    13 weeks ended  13 weeks ended  26 weeks ended Year ended 5
                   2 February 2001 5 November 2000 2 February 2001  August 2000
                       (unaudited)     (unaudited)     (unaudited)    (audited)
                              £'000          £'000           £'000        £'000
Operating loss             (17,941)       (15,635)        (33,576)     (20,101)
Depreciation                    318            420             738        3,063
charges
Amortisation of              10,207         10,207          20,414       13,609
goodwill
Amortisation of                  19             29              48           23
intangible fixed
assets
Amount written off                -              -               -        1,359
web development
Elimination of                  102              -             102            -
share of sale to
associated
undertaking
Loss on disposal                 90              -              90          163
of fixed assets
Increase in stock                 -              -               -     (17,060)
Decrease/                       107        (2,450)         (2,343)     (36,103)
(increase) in
debtors
Increase in                   2,734          1,962           4,696       20,305
creditors
                           --------       --------        --------     --------
Net cash outflow            (4,364)        (5,467)         (9,831)     (34,742)
from operating
activities
                           --------       --------        --------     --------

9.      Analysis of net funds
                   At 6 August  Cash At 5 November 2000  Cash     At 2 February
                2000 (audited)  flow        (unaudited)  flow  2001 (unaudited)

                         £'000 £'000              £'000 £'000             £'000
Cash at bank            34,504 (106)             34,398 (28,409)           5,989
and in hand
Term deposits                -     -                  - 20,008            20,008
                        34,504 (106)             34,398 (8,401)           25,997
                      -------- --------           -------- --------     --------
Finance leases           (103)     5               (98)    14              (84)
                      -------- --------           -------- --------     --------
Total net               34,401 (101)             34,300 (8,387)           25,913
funds
                      -------- --------           -------- --------     --------


A copy of this report is being sent to all shareholders. Copies are available
to the public on request from the Company's registered office, at 27 Great West
Road, Brentford, Middlesex TW8 9AS.