Information  X 
Enter a valid email address

ISA International (ISA)

  Print      Mail a friend       Annual reports

Tuesday 22 January, 2002

ISA International

Trading Update & Disposals

ISA International PLC
22 January 2002

                      ISA International plc
                     ('ISA' or 'the Group')
                   Trading Update & Disposals
Following  the end of the Group's financial year, the  board  of
ISA today makes the following trading statement.

We are pleased with the continuing progress made by the Group in
what  has  been a very challenging year. In September 2001,  ISA
entered  into  a  strategic  alliance  with,  and  received   an
investment   of   £8.0   million  from  Daisytek   International
Corporation,  a Nasdaq listed US based wholesale distributor  of
computer  and office supplies. The strategic alliance  addressed
both  the  financial  needs of ISA and its requirement  to  have
strong   global  partnerships  with  vendors  and   to   service
customers.  Good  progress has already been made  in  developing
these areas.

In October 2001, we reorganised our German operation and reduced
Central functions eliminating combined annualised costs of about
£1.5  million. Costs associated with these changes are estimated
at  £0.5 million and will be shown as non-recurring items within
our 2001 results.

Our  new 114,000 sq.ft. state-of-the-art UK distribution  centre
in Wakefield was opened earlier this month. This facility, which
we  have  named the Europort NDC, more than doubles the size  of
the  previous  facility  and we are already  seeing  significant
benefits  in  terms of cost, efficiency and improved  levels  of
customer service. Certain one off costs, including asset  write-
offs  and provisions for future expenditure, arose in connection
with this move. These are estimated at £1.0 million and will  be
recognised in the 2001 results.

The  Group  has enjoyed strong sales growth in 2001 compared  to
the previous year. Group turnover is expected to be in excess of
£350  million  for the year ended 31 December 2001,  20%  higher
than  the  previous  year  and well ahead  of  estimated  market
growth.   Following   the  investment   by   Daisytek,   trading
performance in Q4 2001 was significantly better than in Q3, with
the  UK  and Scandinavia showing excellent results. In addition,
France  and  Germany have seen a significant  reduction  in  the
levels of losses in Q4.

Our associate Kingfield Heath is trading in line with
expectations, with its centralised warehouse, Arrow   now
operational.  The  costs  of the planned branch  rationalisation
programme will continue into 2002.

The  Board  has  reviewed Group activities and identified  areas
where  resources, both management time and cash, could  be  more
effectively re-deployed.

On  17  January 2002 we exchanged contracts for the disposal  of
our  Austrian subsidiary, Supplies Team EDV-Zubehor Handel  GmbH
('ST  Austria') which distributes consumable office supplies  in
Austria.  Total  cash consideration of Euros 2.3  million  (£1.4
million)  has  been  received today. After settling  intra-group
balances, the net cash consideration of Euros 1.2 million  (£0.7
million)  will be applied to reduce Group indebtedness.  In  the
year  ended  31 December 2000, ST Austria had turnover  of  £6.8
million  and  a loss before tax of less than £0.1  million.  Net
assets of ST Austria at 31 December 2000 were £0.6 million.  Our
Austrian  business had a minor share of a small and  low  growth
market  and therefore was unlikely to provide the Group with  an
adequate level of return in the medium term.

We  exchanged conditional contracts in late December  2001,  for
the  sale of our 32% holding in EXY Group Limited ('EXY'), whose
principal   trading   activities  consist  of   the   recycling,
manufacture  and  distribution of  consumable  office  products.
Total  consideration will be £0.8 million, of which £0.4 million
will be received in cash on completion, with the balance in  the
form  of  non-voting redeemable 7% preference shares, redeemable
in  equal tranches on 30 April and 31 August 2002. Completion of
this  disposal is expected by 28 January 2002. The proceeds will
be  applied to reduce Group indebtedness. In the year  ended  31
December  2000,  EXY  contributed £0.1 million  to  the  Group's
consolidated  profit  before  tax.  At  31  December  2000,  the
carrying  value  of  the  Group's investment  in  EXY  was  £0.5

At  the end of last year, we announced the resignation of  David
Heap as Chairman and Director of the Group for personal reasons.
We   are   making  progress  towards  recruiting  high   calibre
candidates  to join the board, including the vacant position  of

The  investment  by Daisytek not only provided  cash,  but  also
released   management  to  complete  a  number  of   significant
projects. The changes made in Q4 carried some one-off costs  but
the  benefits to overall business performance are long term  and
sustainable. Following stronger trading in Q4, we are optimistic
about the Group's prospects for 2002.

ISA International Plc                               01274 306787
Bruce Robinson, Chief Executive Officer
Mike Murphy, Chief Financial Officer

Weber Shandwick Square Mile                         020 7950 2800
Louise Robson / Susanne Walker

                      This information is provided by RNS
            The company news service from the London Stock Exchange


a d v e r t i s e m e n t