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ISA International (ISA)

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Thursday 28 September, 2000

ISA International

Interim Results

ISA International PLC
28 September 2000


                     ISA INTERNATIONAL plc
 'the international distributor of electronic office supplies'
                               
     Interim Results for the six months ended 30 June 2000
                               
                               
CHAIRMAN'S STATEMENT

So  far,  this year has seen the Group successfully achieve  a
number of its strategic goals:

*   European logistics re-established as a core competence
*   UK logistics capacity doubled to meet increased volumes
*   Implementation of a Pan European  e-commerce platform
*   Further specialist appointments to our executive team
*   Implementation of a Pan European purchasing programme

Trading   performance  in  the  UK,  Ireland  and  Scandinavia
continued  strongly with profit contribution some  43%  higher
than  the same period last year. Against this, trading  losses
continue  in  Continental  Europe as  the  significant  issues
affecting these businesses in 1999 continued.

Financial Results

Total Group turnover for the six months ended 30 June 2000 was
£145.0m  (1999 continuing operations: £149.0m).  Although  the
loss  before taxation was £(1.4)m (1999 continuing operations:
profit of £1.6m) the profit before non-recurring items,  share
of  associates  and  tax improved to  £0.1m  from  a  loss  of
£(0.7)m in the second half of 1999.

Non-recurring  items  amounting  to  £1.6m  were  incurred  in
Continental  Europe,  largely due  to  difficulties  with  the
operation  of  our  outsourced logistics system  resulting  in
stock losses and customer claims; and duplicate costs as we re-
established our own distribution facility near Dusseldorf. Our
share   of  non-recurring  items  charged  by  our  associate,
Kingfield  Heath,  amounted to £0.5m  as  they  continued  the
integration of their branch network.

Tax  losses incurred in Continental Europe cannot be used this
year  and this contributed to a net tax charge for the  Group.
Net debt at 30 June stood at £29.0m, producing a gearing ratio
of 120.8%.

Dividend

The Board does not propose a dividend for the six months ended
30  June 2000. The dividend policy of the Group remains  under
review  and  the  Board intends to return to  the  payment  of
dividends as soon as appropriate.

Operational Review

The  market for electronic office supplies continues  to  grow
rapidly,  at about 15-20% per annum in our trading  locations.
Although  turnover  increased in the UK  and  Scandinavia,  it
decreased  in  Continental Europe where  service  difficulties
have  stifled  sales initiatives. Resolving these difficulties
and  implementing long-term solutions has taken a  significant
amount  of management attention, which has held back the  rate
of recovery in margins.

After a detailed review of our customer service needs, we have
re-established  in-house logistics facilities in  Germany  and
France.   These   changes  are  expected  to   improve   stock
availability, service flexibility, next day delivery  coverage
and consequently overall customer satisfaction.

We  now  have  in  place a platform to support our  e-commerce
strategy,  supplied  by  Interworld, a leading  US  e-commerce
solutions  provider. The platform is live in Scandinavia,  the
UK, and Germany, and is shortly to be launched in France. Take
up  has  been  good as customers recognise the opportunity  to
reduce  the  cost  of  procurement whilst  at  the  same  time
improving  controls, efficiency and the quality of  management
information.

As  part of our e-commerce strategy, in the UK we have started
managing  fulfilment contracts for a number of  retail  groups
and  trade  customers  utilising the additional  capacity  and
increase in productivity from our expanded Bradford warehouse.
We  have identified similar opportunities in Europe using  our
newly  commissioned  15,000 sq. m distribution  facility  near
Dusseldorf.

Operational synergies in our associate, Kingfield  Heath,  are
gradually being realised and trading contribution is ahead  of
last year on a like-for-like basis.

Post Balance Sheet Event

The  Company  terminated the logistics service  contract  with
PFSweb  Europe B.V. on 22 September 2000. An early termination
fee, expected to be £1.2m, is payable over the next six months
and will be provided for in the second half.

The Board and Management

I  am  delighted to announce that with immediate effect, Bruce
Robinson  will  assume  the  role of  Group  Chief  Executive,
leaving  me free to concentrate on the strategic direction  of
the Group.

We  have  further  strengthened our executive management  team
with  the following appointments: Tony Price as Group Director
of  MIS (February), Nad Philips as Managing Director of France
(June),  Carl  Tybring-Gjedde as Managing Director  of  Norway
(August)  and  Mario  Koenraadt as Director  of  Pan  European
Purchasing  (September). All bring a wealth of  experience  to
the Group.

Prospects

In  the  short term we still have to complete the recovery  of
our  European business and this is our primary focus. However,
in  the  medium  term  we  see a much  stronger  picture.  The
combination  of  a  powerful,  customer  focused   sales   and
marketing  organisation  supported  by  robust  logistics  and
market leading e-commerce platforms leaves ISA well placed  to
meet future opportunities.

David Heap                                   28 September 2000
Chairman


For further information, please contact:

ISA International plc                             01274 892007
David Heap, Chairman
Bruce Robinson, Group Chief Executive
Mike Murphy, Group Finance Director

Square Mile Communications                       020 7601 1000
Louise Robson/Georgina Briscoe


ISA INTERNATIONAL plc
Group Profit and Loss Account

                                                    
                        Unaudited                   Unaudited        
                      6 months to                 6 months to        
                     30 June 2000                30 June 1999 
                                  Continuing     Discontinued       Total
                             £000       £000             £000        £000
                                                      
Turnover                  144,966    148,954           55,958     204,912
                                                   
Cost of sales 
- normal                 (120,598)  (123,807)         (41,523)   (165,330)
Cost of sales 
- non recurring              (491)         -                -           -
                 -------------------------------------------------------------
Gross profit               23,877     25,147           14,435      39,582
                                                      
Overheads                 (23,415)   (22,905)         (13,070)    (35,975)
Amortisation of goodwill        -          -             (221)       (221)
Non recurring items        (1,103)         -                -           -
                 -------------------------------------------------------------
Operating(loss)/profit       (641)     2,242            1,144       3,386
Share of associates           
- normal                      991          -                -           -
- non recurring              (515)         -                -           -
Amortisation of goodwill     (391)         -                -           -
                 -------------------------------------------------------------
(Loss)/profit before 
 interest and tax            (556)     2,242            1,144       3,386
                                                      
Net interest                 (834)      (678)            (640)     (1,318)

                 -------------------------------------------------------------
(Loss)/profit before  
 taxation                  (1,390)     1,564              504       2,068
                                   -----------------------------
Tax                          (698)                                   (682)
                                                                --------------
(Loss)/profit after 
 taxation                  (2,088)                                  1,386
Dividends                       -                                       -
                      
                         ===========                            ==============
Transfer (from)/to    
reserves                   (2,088)                                  1,386     
                         ===========                            ==============
                                                
(Losses)/earnings per                           
 ordinary share
Basic                      (3.7)p                                    2.6p
Before non-recurring items (0.3)p                                    2.6p
Fully diluted              (3.6)p                                    2.4p
                                                

ISA INTERNATIONAL plc 
Group Profit and Loss Account (continued)

                   
                                          
                                                     Audited   
                                                12 months to   
                                            31 December 1999
                               Continuing       Discontinued       Total
                                     £000               £000        £000
                                       
Turnover                          288,027             83,573     371,600
                                    
Cost of sales 
-  normal                        (239,206)           (62,215)   (301,421)
Cost of sales 
- non recurring                    (1,532)                 -      (1,532)
                        ------------------------------------------------------
                                       
Gross profit                       47,289             21,358      68,647
                                       
Overheads                         (46,604)           (17,430)    (64,034)
Amortisation of goodwill                -               (329)       (329)
Non recurring items                (2,701)            (1,267)     (3,968)
Operating(loss)/profit             (2,016)             2,332         316
Share of associates           
- normal                              546                  -         546
- non recurring                    (1,366)                 -      (1,366)
Amortisation of goodwill             (197)                 -        (197)
                         -----------------------------------------------------
                                       
(Loss)/profit before                         
 interest and tax                  (3,033)             2,332        (701)

Net interest                       (1,291)              (912)     (2,203)
                         -----------------------------------------------------
(Loss)/profit before taxation      (4,324)             1,420      (2,904)
                                 -------------------------------
Tax                                                                 (987)
                                                                 -------------
(Loss)/profit after taxation                                      (3,891)
Dividends                                                              -
      
                                                                 =============
                            
Transfer (from)/to reserves                                       (3,891)
                                                                 =============
(Losses)/earnings per ordinary share                     
Basic                                                              (7.3)p
Before non- recurring items                                          4.1p
Fully diluted                                                      (6.6)p
                                       


ISA INTERNATIONAL plc
Summarised Group Balance Sheet

                                                                  
                                             Unaudited               Audited
                                       30 June      30 June      31 December
                                          2000         1999             1999
                                          £000         £000             £000
Fixed assets                                                      
      Goodwill                          15,046        8,358           15,437
      Tangible assets                    5,859       10,975            4,706
      Investments                        3,598            -            3,262
                                    -----------   ------------    ------------
                                        24,503       19,333           23,405
                                    -----------   ------------    ------------
                              
Current Assets
      Stocks                            19,180       27,269           18,873
      Debtors due within one year       47,494       67,784           45,968
      Cash at bank and in hand             435        2,431            1,860
                                    -----------   ------------    ------------
                                        67,109       97,484           66,701
Creditors due within one year          (66,993)     (68,868)         (63,382)
                                    -----------   ------------    ------------
Net current assets                         116       28,616            3,319
                                    -----------   ------------    ------------
                                                                  
Total assets less current liabilities   24,619       47,949           26,724  
                         
Creditors due after more than one year    (545)     (17,192)            (618) 
Deferred taxation                          (46)        (387)             (37)
                                    ============  ============    ============
Net assets                              24,028       30,370           26,069
                                    ============  ============    ============
Capital and reserves                                                          
Share capital and share 
  premium account                        7,680        3,694            3,694  
Shares to be issued                          -        3,976            3,976
Reserves                                16,348       22,700           18,399
                                    ============  ============    ============
                                        24,028       30,370           26,069
                                    ============  ============    ============
                              
                                                                            
Reconciliation in Movements in Shareholders' Funds                            
                                     
                                           Unaudited                Audited
                                   6 months to  6 months to    12 months to
                                       30 June      30 June     31 December
                                          2000         1999            1999
                                          £000         £000            £000
                                                                   
Retained(loss)/profit 
  for the period                        (2,088)       1,386          (3,891)
New share capital issued                    10            -               -
Unrealised gain on disposal
  of investments                             -            -             815
Translation differences on foreign
  currency net investments                  37          (41)            120
                                     -----------   ------------    -----------
Net (deduction from)/addition
  to shareholders' funds                (2,041)       1,345          (2,956)
Opening shareholders' funds             26,069       29,025          29,025
                                     ===========   ============    ===========
Closing shareholders' funds             24,028       30,370          26,069
                                     ===========   ============    ===========
                            

ISA INTERNATIONAL plc
Summarised Group Cash Flow Statement

                                                                  
                                           Unaudited                Audited
                                   6 months to  6 months to    12 months to
                                       30 June      30 June     31 December
                                          2000         1999            1999
                                          £000         £000            £000
Net cash (outflow)/inflow from                                     
 operating activities
Operating (loss)/ profit                  (641)       3,386             316
Depreciation                               803        1,972           3,701
Increase in working capital             (4,341)        (976)         (1,845)
                                    ------------    ----------    ----------- 
                                        (4,179)       4,382           2,172
                                    ------------    ----------    ----------- 
                             
Returns on investments and 
servicing of finance                      (809)      (1,746)         (2,645)
                                    ------------    ----------    -----------
                                                                   
Taxation received/(paid)                   340         (459)         (1,349)
                                    -----------     ----------    ----------- 
                             
Capital expenditure and 
  financial investment
Purchase of tangible fixed assets       (2,222)      (1,345)         (2,245)
Sale of tangible fixed assets              212        1,255           1,716
                                    -----------     ----------     ----------
                                        (2,010)         (90)           (529)
                                    -----------     ----------     ---------- 
                             
Acquisitions and disposals                                         
Purchase of subsidiary undertakings          -          (68)            (99)
Net cash transferred with subsidiary  
  undertakings                               -            -          (2,142)
Pre-sale dividend received                   -            -           2,500
Repayment of intra-group debt                -            -          16,500
Investment in associates                   (24)           -            (648)
                                    ------------     ----------    ----------
                                           (24)         (68)         16,111
                                    -----------      ----------    ---------- 
                             
Equity dividends paid                        -            -               -
                                    -----------      ----------    ---------- 
                             
Net cash (outflow)/ inflow 
  before financing                      (6,682)       2,019          13,760
                                    -----------      ----------    ----------
                                                                   
Financing                                                          
Issue of ordinary share capital             10           -                -
Repayment of amounts borrowed                -           -          (16,500)
Capital element of hire 
  purchase payments                       (163)       (330)            (489)
                                    -----------     -----------    ----------
                                          (153)       (330)          (16,989)
                                    -----------     -----------    ---------- 
                                    ===========     ===========    ==========
(Decrease)/increase in cash 
  in the period                         (6,835)      1,689            (3,229)
                                    ===========     ===========    ===========
                                                                   
                                                                   
                                                                   
Analysis of movement in net debt                                   
Balance at beginning of period        (22,351)     (36,432)          (36,432)
(Decrease)/ increase in cash 
  in the period                        (6,835)       1,689            (3,229)
Cash  outflow from movement in debt       163          330            16,989
Loans/hire purchase contracts         
  disposed of with subsidiaries             -            -                10
New hire purchase contracts                 -          (14)              (36)
Effect of foreign exchange rate changes    (3)         (10)              347
                                    ===========     ===========    ===========
Balance at end of period              (29,026)     (34,437)          (22,351)
                                    ===========     ===========    ===========
                              
   
    ISA INTERNATIONAL plc
    NOTES TO THE FINANCIAL INFORMATION
                                                                            
1.  The  interim financial information has been prepared on the basis of  the
    accounting policies set out in the 1999 statutory accounts.
                                                                            
2.  The non-recurring items consist of the following:

                            6 months to                            
                                30 June                             
                                   2000       12 months to 31 December 1999
                                         Continuing    Discontinued    Total  
                                   £000        £000            £000     £000
                                                                     
Cost of sales                                                     
Stock losses and customer claims    491       1,532               -    1,532
                                ----------------------------------------------
Overheads                                                         
Board and senior management 
  settlements                       210       1,305             120    1,425
Property and location 
  rationalisation                   893         838             151      989
Exceptional bad debts                 -           -             996      996
Accelerated IT depreciation           -         558               -      558
                                ----------------------------------------------
                                  1,103       2,701           1,267    3,968
                                ----------------------------------------------
Total before share of associates  1,594       4,233           1,267    5,500
                                ----------------------------------------------
Share of associates                 515       1,366               -    1,366
                                ----------------------------------------------
                                  2,109       5,599           1,267    6,866
                                ----------------------------------------------
                                           
3. The  taxation  charge  is  calculated by  applying  the  Directors'  best
   estimate  of  the  annual effective tax rate to the loss/profit  for  the
   period.  The  net charge in 2000 arises as losses incurred in Continental
   Europe cannot be used in this period.
                                                                            
4. The  calculation of loss per ordinary share is based on  the  loss  after
   taxation  of £2,088,000 (1999: profit of £1,386,000) and on 56.7  million
   (1999:  53.2  million) ordinary shares being the weighted average  number
   of  shares  in issue during the period. The calculation of fully  diluted
   earnings  per  ordinary share includes the impact of 5.54 million  shares
   issued  on 9 March 2000 under the terms of the acquisition of John  Heath
   (Holdings)  Ltd  in  1998,  in  addition  to  the  dilutive   effect   of
   outstanding share options.
                                                                            
5. A  statement  of  total recognised gains and losses is  not  included  as
   there  have been no material movements other than those reported  in  the
   Profit  &  Loss  Account  and  the  translation  differences  on  foreign
   currency  net  investments shown in the Reconciliation  of  Movements  in
   Shareholders' Funds.
                                                                            
6. There have been no discontinued activities in the 6 months to 30 June
   2000.
                                                                            
7. The   preceding  financial  information  does  not  constitute  statutory
   accounts  as  defined  in  Section 240 of the  Companies  Act  1985.  The
   financial  information for the year to 31 December 1999 is based  on  the
   statutory  accounts  for  that  year.  These  accounts,  upon  which  the
   auditors  issued  an unqualified opinion, and which did not  contain  any
   statement  under  237(2)  or (3) of the Companies  Act  1985,  have  been
   delivered to the Registrar of Companies.
    
8. Copies  of the Interim Report will be sent to shareholders and will  also
   be  available  from  the  Company's Head  Office  at  66-70  Vicar  Lane,
   Bradford BD1 5AG
   

                                                                                
  

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