ISA INTERNATIONAL PLC 20 October 1999 ISA INTERNATIONAL plc ('ISA' or 'the Group') PROGRESS REPORT ISA's interim results statement on 3 September indicated that the results for the full year would be adversely affected by costs relating to the consolidation of our European operations as well as the costs of integration of John Heath & Co Ltd ('Heath') with the Kaye Office Supplies Ltd group ('Kaye'). The Board is now in a better position to quantify these non-recurring charges. The non-recurring costs will be approximately £3.8m, relating to senior management and operational rationalisation, and the Group's share of the costs of integrating Heath with Kaye. During the current year the Group has refined its management structure, which now operates on a Regional rather than individual country basis. The Board believes that this more focused structure will enable tighter control and faster response times to business issues than has previously been the case. However, there has been some temporary disruption to sales volumes in Continental Europe, due to the depth of the senior management reorganisation in France and as an anticipated consequence of the move to outsourced warehousing and logistics in Germany. The Board are encouraged by the current level of gross margin being achieved and anticipate that the improved margins in the continuing Group from the 1st half will be maintained. Underlying performance for the Group as a whole in the 2nd half of the year is expected to be ahead of the level achieved in the 1st half. For further information, please contact: ISA International plc David Heap, Chairman and Chief Executive 0181 614 7814 Mike Murphy, Finance Director 01274 306 787 Square Mile Communications 0171 601 1000 Susan Ellis or Louise Robson