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J2C PLC (JTK)

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Friday 29 June, 2001

J2C PLC

Interim Results/Cap Reduction

J2C PLC
29 June 2001

                                                             29 JUNE 2001

                     J2C plc ('J2C' or 'the Company')

                    Proposed capital reduction scheme and
          Interim statement for the six months ended 31 March 2001

Key Points

*  Proposed capital reduction scheme to distribute the Company's surplus
   cash assets to shareholders

*  If the scheme is approved, the amount to be repaid is expected to be in
   the range of £33 million to £35 million, which represents a price per
   share of between 35.5p and 37.5p

*  The closure of the Group's businesses excluding BestValueZone, discussions
   for the sale of which are ongoing

*  Turnover for the six months ended 31 March 2001 of £0.7 million

*  Losses from ordinary activities of £34.2 million including an exceptional
   £26.5 million charge in respect of the write-off and impairment of
   goodwill, plus £1.56 million in respect of reorganisations and closures
   and £1.57 million in respect of the write-off of loans to an associated
   company

*  Current cash position of £36.1 million.

Introduction

On 9 February 2001, J2C announced that if a major transaction were not
concluded by the Company in the next few months, the Board would be prepared
to consider implementing a capital reduction scheme resulting in a
distribution of all or part of the Company's surplus cash assets to
shareholders.

Since that time the Directors, in consultation with the Company's advisers and
major shareholders, have considered a number of potential transactions.
However they have not, to date, managed to find a transaction which they felt
appropriate to recommend to shareholders.

Consequently, the Board has resolved to allow shareholders to decide whether a
capital reduction scheme to return the surplus cash assets of the Company
should be implemented.  The resolution in connection with the capital
reduction will not carry a recommendation by the Directors and those Directors
who have an interest in the capital reduction as shareholders have undertaken
not to vote on the resolution.

In view of the proposed capital reduction scheme, the businesses owned by the
group, with the exception of BestValueZone, are to close.  Discussions for the
sale of BestValueZone are ongoing.

On 1 February 2001, when the Board first stated that it was seeking a major
transaction for the Company, which may have resulted in an offer for the
Company if it delivered value for shareholders, J2C entered an offer period
under the City Code on Takeovers and Mergers.  All discussions in connection
with a major transaction for the Company have been terminated and the
Directors will not seek to enter into any such further discussions unless
shareholders vote against the resolution to approve the capital reduction.
Accordingly, following this announcement the Company will no longer be in an
offer period.

Chief Executive, Karl Watkin, said:  'We have clearly demonstrated that B2B
markets can deliver significant savings but take-up and usage of B2B generally
has been far short of expectations.  All our investors were made aware from
the outset that our success would depend on that take-up.

'J2C has managed its cash carefully.  After strenuous efforts to develop a
future with a partner, we have been unable to conclude a deal in the best
interests of shareholders.  The responsible course of action, as the Board
clearly indicated in February, is to invite shareholders to consider a scheme
to return cash to them.  The Board will not vote on this.  I would like to
place on record our thanks to our staff, who have been unstinting in their
efforts to make J2C a success.'

Capital reduction scheme

It is anticipated that a circular setting out full details of the proposed
capital reduction and providing notice of an extraordinary general meeting of
the Company will be sent to shareholders within six weeks.  A further
announcement will be made at that time.

The cash balance was £36.1 million as at 28 June 2001, but a detailed
assessment of the remaining assets and liabilities of the Group will be
required before an exact amount proposed for the capital reduction can be
announced.  However the Directors anticipate that the amount to be repaid
proposed to the Court for approval will be in the range of £33 million to £35
million (equivalent to a price per share in the range of 35.5p to 37.5p).

The resolution in connection with the capital reduction will not carry a
recommendation by the Directors and those Directors who have an interest in
the capital reduction as shareholders have undertaken not to vote on the
resolution.

Assuming that the resolution is passed, application will be made to the Court
for permission to implement the proposed capital reduction.

Results

The results for the six months ended 31 March 2001 show turnover of £0.7
million with losses from ordinary activities of £34.2 million.  The loss for
the six month period includes a charge of £26.5 million in respect of the
write-off and impairment of goodwill, £1.56 million in respect of
reorganisations and closures and £1.57 million in respect of the write-off of
loans to an associated company.

Reorganisation to date

Following the announcement on 1 February 2001 regarding a planned reduction in
the cash burn rate, a substantial reorganisation was undertaken.

As a result, Webfreight and Granite Rock were closed and PulpandPaper.Net
disposed of to its management.  The Tradezone operation was moved to the
Newcastle headquarters of the Group, thereby cutting costs of operation and
the numbers employed.

These actions had the effect of reducing the net monthly operational cash burn
to approximately the target announced on 1 February 2001 of £325,000.
However, there have been a number of non-recurring costs, such as redundancy
payments, which have increased the total cash outflow.

The numbers employed by the Group have fallen from 135 at 30 September 2000 to
101 at 31 March 2001 and to 58 currently employed.

Current operations

The ongoing businesses within the Group and the Board's intentions with
respect to them in view of the proposed capital reduction scheme are as
follows:

BestValueZone

BestValueZone, which is a combination of the businesses of Industry On-Line
and Tradezone, is primarily focused on the provision of e-procurement services
to Local Authority and Government organisations.  J2C is working closely with
Oracle to enable BestValueZone to meet the demands of its potential customer
base.

Significant progress has been made with BestValueZone.  Negotiations are at an
advanced stage with several local authorities on a project to provide an e-
procurement solution in line with the Government's Best Value Initiative.  The
Directors believe that this project represents a small percentage of the
potential market for BestValueZone's services.

Whilst recognising the early stage nature of the business, the Directors
believe that BestValueZone represents a substantial opportunity for the
development of a successful e-commerce business.  This will not be achievable
within J2C if the capital reduction scheme is effected.  Consequently, the
Directors are in discussions for the sale of this business.  A further
announcement will be made in due course.

Powernet

On 1 February 2001, the Company announced that the Directors would seek to
find a substantial industry partner for Powernet.  This has not proved to be
possible.  As a result, Powernet will be closed shortly.

Translinx

The Translinx operation is currently under review.  Discussions are ongoing
with a number of parties with respect to the sale of its assets and/or
technology.

e-cement

The Company is in discussions with Blue Circle Industries PLC with a view to a
sale of its stake in e-cement.  Loans totalling £1.57 million made by J2C to
e-cement have been written off.

Karl Watkin
Chief Executive Officer

Enquiries:

J2C plc
Karl Watkin, CEO                       020 7404 5959 on 29th June

Brunswick Group Ltd
Kevin Byram
Gavin Partington
Corinne Daniels                        020 7404 5959

GROUP PROFIT AND LOSS ACCOUNT
for the 6 months ended 31 March 2001

______________________________________________________________________________
                                      6 months to   9 months to   15 months to
                                Notes    31 March      31 March   30 September
                                             2001         2000            2000
                                             £000         £000            £000
                                                                             
Turnover                                                                     
   - continuing operations                     227        340            1,020
   - discontinued operations                   496          -              710
______________________________________________________________________________
                                                                             
                                               723        340            1,730
                                                                             
Administrative expenses                                                      
   - excluding exceptional items                                         
     (including goodwill                                                 
     amortisation of £2,991,000                                          
     (9 months to 31 March 2000:                                         
     £1,651,000; 15 months ended                                         
     30 September 2000:                                                  
     £7,431,000))                           (9,241)    (2,609)        (14,806)
    Exceptional items                                                       
        impairment of goodwill             (23,528)          -        (26,469)
        loan write-off                      (1,573)          -              -
        reorganisation costs                (1,560)          -              -
______________________________________________________________________________
                                                                            
                                            (35,902)     (2,609)      (41,275)
                                                                             
Operating loss                                                               
          - continuing operations           (33,217)     (2,269)      (39,540)
          - discontinued operations          (1,962)          -            (5)
______________________________________________________________________________
                                                                             
                                             (35,179)     (2,269)     (39,545)
                                                                             
Loss on sale of discontinued                                                 
operation                                       (150)          -            -
Net interest receivable                         1,163         328        1,720
______________________________________________________________________________
                                                                             
Loss on ordinary activities before                                           
taxation                                      (34,166)    (1,941)     (37,825)
                                                                             
Taxation                                             0          0            0
______________________________________________________________________________
                                                                             
Loss on ordinary activities after                                            
taxation                                      (34,166)    (1,941)     (37,825)
                                                                             
Dividends                                            0          0            0
______________________________________________________________________________
                                                                             
Loss for the financial period                 (34,166)    (1,941)     (37,825)
______________________________________________________________________________
                                                                             
Basic loss per share                2          (37.6p)    (10.0p)      (79.7p)
                                                                             
Diluted loss per share              2          (37.6p)    (10.0p)      (79.7p)
                                                                             
Headline loss per share             2          (5.0p)     (1.5p)       (8.3p)

GROUP BALANCE SHEET
at 31 March 2001

______________________________________________________________________________
                                       6 months to  9 months to   15 months to
                                            31 March   31 March   30 September
                                                2001       2000           2000
                                                £000       £000           £000
Fixed assets                                                                
                                                                            
Goodwill                                           -     48,504         26,519
                                                                            
Tangible assets                                  993        193          1,290
______________________________________________________________________________
                                                                            
                                                 993     48,697         27,809
Current assets                                                              
                                                                            
Investments                                        -      3,460              -
Stocks                                           150          -            128
Debtors                                        1,358        698          1,549
Cash at bank and in hand                      37,855     50,134         45,233
______________________________________________________________________________
                                                                            
                                              39,363     54,292         46,910
                                                                            
Creditors: amounts falling due within one                                   
year                                         (2,604)    (4,099)        (2,596)
______________________________________________________________________________
                                                                            
Net current assets                            36,759     50,193         44,314
______________________________________________________________________________
                                                                            
Total assets less current liabilities         37,752     98,891         72,123
                                                                            
                                                                            
Creditors: amounts falling due after more                                   
than one year                                      -      (100)          (205)
______________________________________________________________________________
                                                                            
                                                                            
Net assets                                    37,752     98,791         71,918
______________________________________________________________________________
                                                                            
Capital and reserves                                                        
                                                                            
Called up share capital                           91         87             89
                                                                            
Share premium account                         57,042     50,995         54,145
                                                                            
Merger reserve                                     -     49,650         18,047
                                                                            
Shares to be issued reserve                    2,960          -          5,859
                                                                            
Profit and loss account                     (22,341)    (1,941)        (6,222)
______________________________________________________________________________
                                                                            
Equity shareholders' funds                    37,752     98,791         71,918
______________________________________________________________________________
                                                                            
                                                                            

SUMMARISED GROUP CASH FLOW STATEMENT
for the 6 months ended 31 March 2001

                                         6 months to 9 months to  15 months to
                                            31 March   31 March   30 September
                                                2001       2000           2000
                                                £000       £000           £000
                                                                             
Operating loss                              (35,179)    (2,269)       (39,545)
                                                                             
Depreciation, amortisation and                28,306      1,655         34,095
impairment
                                                                             
Loss/(profit) on disposal of fixed 
assets                                           196          -           (26)

                                                                             
Profit on disposal of investment                   -          -          (275)
                                                                             
Decrease in stocks                              (22)          -          (122)
                                                                             
Decrease/(increase) in debtors                   191      (655)        (1,022)
                                                                             
Increase/(decrease) in creditors                 911        281          (282)
______________________________________________________________________________
                                                                             
Net cash outflow from operating                                              
activities                                   (5,597)      (988)        (7,177)
                                                                             
Returns on investments and servicing of                                      
finance                                        1,163        328          1,720
                                                                             
Taxation paid                                      -          -              -
                                                                             
Capital expenditure and financial                                            
investments                                  (1,686)      (438)          (595)
                                                                             
Acquisitions and disposals                     (146)         56             56
______________________________________________________________________________
                                                                             
Cash outflow before management of liquid                                     
   resources and financing                   (6,266)    (1,042)        (5,996)
______________________________________________________________________________
                                                                             
Management of liquid resources                 3,991   (50,000)       (41,730)
                                                                             
Financing                                    (1,112)     51,121         51,229
______________________________________________________________________________
                                                                             
Net (decrease)/increase in cash in           (3,387)         79          3,503
period
______________________________________________________________________________

1.   Basis of preparation

     The directors have produced a set of non-statutory accounts for the six
     month period ended 31 March 2001 and the figures for the six month
     period ended 31 March 2001 included in this interim statement have been
     extracted from those accounts.  The financial information for the period
     ended 31 March 2001 does not constitute statutory accounts as defined in
     section 240 of the Companies Act 1985.  The non-statutory accounts from
     which this interim statement has been extracted have been audited by the
     Company's auditors and the report was unqualified.  The 30 September
     2000 comparatives are extracted from the full Group accounts which have
     been reported on by the Company's auditors and delivered to the
     Registrar of Companies.  The report of the auditors was unqualified and
     did not contain a statement under section 237(2) of the Companies Act
     1985.  The financial information for the period ended 31 March 2000 is
     unaudited.

     The interim financial statements have been prepared on the basis of the
     accounting policies set out in the statutory accounts for the period
     ended 30 September 2000.

2.   Earnings per share

     The calculation of basic loss per ordinary share is based on a loss of
     £34,166,000 (9 months ended 31 March 2000: £1,941,000; 15 months ended
     30 September 2000: £37,825,000) and the weighted average number of
     shares in issue of 90,715,735 (9 months ended 31 March 2000: 19,494,798;
     15 months ended 30 September 2000: 47,470,104).

     The calculation of diluted earnings per share uses the same earnings
     figure and weighted average number of ordinary shares as the basic
     calculation because the share options in existence during the period
     were exercisable at above the average share price.
     The calculation of the headline loss per share uses the same weighted
     average number of ordinary shares as the basic calculation, however the
     earnings are adjusted to exclude amortisation charges, impairment of
     goodwill and reorganisation costs.  This reduced the loss by £29,652,000
     (9 months ended 31 March 2000: £1,651,000; 15 months ended 30 September
     2000: £33,900,000) to £4,514,000 (9 months ended 31 March 2000:
     £290,000; 15 months ended 30 September 2000: £3,925,000) and reduced the
     loss per share by 32.6p (9 months ended 31 March 2000: 8.5p; 15 months
     ended 30 September 2000: 71.4p).

3.   The interim report is being posted to all shareholders and copies are
     available on application to the Company Secretary, J2C plc, Mikasa
     House, Asama Court, Newcastle Business Park, Newcastle upon Tyne, NE4
     7YD.




                                                                                
                                         

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