Interim Results

Ideal Shopping Direct PLC
25 September 2003


                           Ideal Shopping Direct Plc

          Interim Results For The Six Months Ended 30 June 2003


                                   Highlights


Financial


   •Turnover up 67% to £19.7 million (2002: £11.8 million).


   •Operating loss for six months of £542,000 (2002: £807,000 loss)


   •Operating overhead up 46% to £7,953,000 (2002: £5,454,000), reflecting
    additional costs of occupying new offices, broadcasting studios and
    warehouse facilities built following fire in March 2001.


   •Loss before tax for period £677,000, reflecting high operational gearing
    of the business (2002: £284,000 profit, after including business
    interruption claim of £1.2 million)


   •Loss per share of 1.63p (2002: 1.0p profit)


   •Customer database up 56% on comparable period 2002.


Operations


   •Rapid growth in sales exerted significant pressure on call centre,
    warehousing and buying operations. Decisive and timely action has been taken
    to address issues this highlighted, including transferring call centre
    ordering operations to India as previously announced, review of warehouse
    and fulfilment procedures and enhancing of buying department.


   •Strategic decision to dedicate focus on core activity of television
    shopping where substantial growth opportunities exist. In light of this the
    mail order business, which achieved breakeven in the period, is to be sold
    or closed; this will incur minimal costs.


   •Create and Craft channel progressing well since launch in April.

Outlook

   •Sales in July and August significantly below expectations, largely due to
    hot weather. Sales during September have rallied, but remain lower than
    anticipated.


   •Results for current year expected to be substantially below expectations
    due to lower than forecast sales coupled with costs of strategic actions
    undertaken to underpin key areas of operation in order to ensure robust base
    from which sustainable growth and profits going forward can be delivered.

Commenting on these results, Paul Wright, Chairman and Chief Executive said:

"We have continued to see a substantial increase in sales in the first half.
However, following the move into our rebuilt premises the rapid growth we have
experienced has put significant strains on some key areas of operation across
the business. This has necessitated us to take timely action to ensure that we
have a solid operational base to operate from as we move into the important
Christmas trading period and from which we will be able to fully exploit the
growth market of television as a direct sales channel in the coming years.

"Whilst the actions we are taking this year combined with the effect of poor
trading over the summer will lead to a significant impact on performance in the
current year, the Board's commitment to, and belief in, the opportunities
presented by our chosen market for sustainable growth and profitability remain
undiminished."
ENDS

Attached are the Chairman's statement, profit and loss account, balance sheet,
cashflow statement and associated notes to the accounts.

For further information contact:

Ideal Shopping Direct Plc

www.idealshoppingdirect.co.uk

Paul Wright, Chairman and Chief  Tel: [phone]
Executive
                                 E-mail:
                                 [e-mail]


IKON Associates

Adrian Shaw                      Tel: [phone]
                                 Mobile: [phone]
                                 E-mail: [e-mail]

KBC Peel Hunt
Adam Hart                        Tel: [phone]

Notes for editors

   •Ideal Shopping Direct runs one of the UK's leading live TV Home shopping
    channels, Ideal World on digital satellite channel 635 and digital cable NTL
    channel 855. Ideal World broadcasts 24 hours a day including 16 hours of
    live programmes daily. The channel can currently be accessed by an estimated
    household population of approximately 7.4 million homes (digital satellite
    6.2 million; digital cable NTL 1.2 million). The Create and Craft Channel
    runs 24 hours a day on digital satellite channel 695.


   •The Company serves the "direct to home" market via TV home shopping. The
    Company's branding has a quintessentially British feel focussed on providing
    a wide variety of products in an entertaining and appealing way, building on
    three basic principles: family, friendship and fun.

• Ideal Shopping Direct Plc has been listed on AIM since February 2000.
Its market capitalisation as at close of business on Wednesday 24 September 2003
at a share price of 69.5 p was £20.2 million.


Chairman's Statement

Introduction

Turnover to 30 June 2003, the first six months, grew 67% compared to the
comparable period of 2002. (£19.7m against £11.8m in 2002). We experienced a
lower operating loss of £542,000 compared to £807,000 in 2002. Our operating
overheads in the first half shows an increase of 46% over 2002 reflecting the
fact that we occupied our new offices, broadcasting studio and warehouse having
completed our move in November 2002 from our temporary facility erected in our
car park following the devastating fire we suffered in March 2001. In the
corresponding 2002 period, a considerable amount of our costs were met by our
Insurance company in accordance with our insurance policy so the operating
overheads now reported are not strictly comparable. We report a loss for the
period before taxation of £677,000 against a £284,000 profit in the
corresponding period in 2002, which was declared after including an exceptional
business interruption claim of £1,226,000 so, once again, these figures are not
strictly comparable. Loss per share for the period is (1.63p) against 1.0p
profit in 2002.

Review of trading in the six months ended 30 June 2003

This year is effectively our first full year when we have been able to operate
more normally. Our customer database has grown by 56% over the comparable period
last year. Our customers are proving to be loyal. Our continued rapid sales
growth during the first half exerted significant pressure on our business and
revealed a number of operating weaknesses in our call centre, warehouse and,
most importantly, in the crucial area of sourcing and buying products which our
customers want to purchase. As a consequence, we took a conscious decision to
act decisively and to immediately resolve these problems. We have already
announced our plans to move part of our call centre to India and this move is
underway. A degree of parallel running has been necessitated which will continue
in the current period and the benefits of this action will be seen next year. We
have also focused attention on our warehouse/logistics facilities and
substantially reviewed and modified our customer order fulfilment processes to
deliver better customer service. We also continue to bolster our buying
department. This process is on-going, but we are already beginning to see the
benefits of our actions. The decisions taken have led to an increase in costs in
the period under review and will also impact on our second half performance. We
believe it was critical to take such actions in a timely way to ensure our base
is robust to exploit the sales potential that exists in our chosen market.

Furthermore, we took the decision to focus specifically on the development of
our television shopping business - Ideal World - which we believe represents our
major long-term growth and profit opportunity. Our television business - in
contrast to our catalogue business - is basically a fixed cost operation and
thus our operational gearing allows a substantial level of gross profit to fall
to the bottom line beyond breakeven. As a consequence, we decided not to publish
any more catalogues in the second half of the year in order to concentrate on
our TV shopping business despite the catalogue division being returned to
breakeven. We have taken the view that our current catalogues no longer
represent core business or a significant profit growth opportunity and,
therefore, it is our intention to close and attempt to dispose of this part of
our business. We anticipate only minimal costs will be associated with winding
down the catalogue business. This action will allow management to focus solely
on our TV home shopping business.

Using our spare capacity in non-live broadcast time, in January we launched a
new healthcare pre-recorded channel on behalf of Goldshield Plc. This is a
turnkey operation provided for a third party client.

In addition, capitalising on the success of one of the product sectors sold on
Ideal World, in April we launched a second 'niche' shopping channel called
"Create and Craft" by again maximising the use of our fixed assets during our
quiet periods to record shows for later transmission and which has, since
launch, already attracted a significant and growing number of loyal customers.
The results to date have been very encouraging and this area of our activity was
further supplemented in August by the launch of the Create and Craft channel on
the Web via the simultaneous streaming of the Channel complemented by an
interactive sales-focused web site (www.createandcraft.com). The initial
reaction to this additional method of accessing the consumer and the level of
sales achieved to date has been encouraging and offers us a sales and profit
opportunity in what is currently a fragmented market.
Board of Directors

Currently our Board consists of three Executive Directors and one Non-Executive
Director. It is the Board's intention to strengthen the Board as soon as is
practically possible by appointing another Non-Executive Director.

Current trading

We regard ourselves as retailers of a wide range of general merchandise using
the medium of television as our shop window and have seen our growth
substantially outperform the overall growth in the general retail market. We
are, however, not immune to the same events that have affected some more
traditional retailers - such as the hot weather experienced in July and August.
Sales during these two months were disappointing and significantly below our
expectations. Sales of advertising airtime to third party clients have also
failed to materialise to the levels expected during the first six months. Whilst
sales during September have rallied and we still have the critical pre-Christmas
sales period before us, our internal forecasts indicate that our results for the
current year will be substantially lower than current market expectations due to
lower than forecast own product sales and lower than anticipated advertising
revenue coupled with higher than anticipated costs which we have deemed it
prudent to incur in order to secure our medium and long-term growth potential.

Whilst we continue to anticipate continued sales growth, albeit at a slower rate
than historically achieved, our commitment to, and belief in, the opportunities
presented by our chosen market remain undiminished.


Consolidated Profit and Loss Accounts

                                          Six months     Six months   Year to 31
                                                  to             to     December
                                             30 June   30 June 2002         2002
                                                2003          £'000        £'000
                                               £'000     (unaudited)   (audited)
                                         (unaudited)            
                                                          
Turnover                                      19,671           11,762       32,634
Cost of sales                                (12,260)          (7,115)     (19,128)
                                          ----------     ------------    ---------

Gross profit                                   7,411            4,647       13,506
Administration and
distribution costs                            (7,953)          (5,454)     (12,109)
                                          ----------     ------------    ---------

Operating
(loss)/profit before
business interruption
income and
irrecoverable fire
costs                                           (542)            (807)       1,397
Business interruption
claim income                                       -            1,361        2,213
Irrecoverable fire
costs                                              -             (135)        (170)
                                          ----------     ------------    ---------

Operating
(loss)/profit                                   (542)             419        3,440
Net Interest                                    (135)            (135)        (202)
                                          ----------     ------------    ---------

(Loss)/Profit on
ordinary activities                             (677)             284        3,238
Tax on profit/(loss)
on ordinary activities                           203                -       1,.273
                                          ----------     ------------    ---------

(Loss)/Profit for the
financial year                                  (474)             284        4,511
Dividends                                          -                -            -
                                          ----------     ------------    ---------

Retained (Loss)/Profit                          (474)             284        4,511
                                          ==========     ============    =========

Basic (Loss)/Profit
per share                                      (1.63p)            1.0p        15.5p
Diluted (Loss)/Profit
per share                                       (1.6p)            1.0p        15.4p

There were no recognised gains or losses other than the loss of the six months
ended 30 June 2003

Consolidated Balance Sheets

                             30 June 2003   30 June 2002   31 December 2002
                                    £'000          £'000              £'000
                              (Unaudited)    (Unaudited)          (Audited)

Fixed assets
Tangible
assets                              9,100          6,413              8,984
                               ----------     ----------       ------------

                                    9,100          6,413               8.984
                               ----------     ----------        ------------

Current assets
Stock                               5,005          2.230               4,373
Debtors:
amounts
falling                             1,795          1,730                  766
due within one year
Debtors:
amounts
falling                             1,512              -                1,309
due after more than one
year
Cash                                4,678          7,484                6,241
                               ----------     ----------         ------------

                                   12,990         11,444               12,689

Creditors:
amounts
falling due
within one
year                              (11,107)       (12,319)               (9,562)
                               ----------     ----------          ------------

Net current
assets/(liabil
ities)                              1,883           (875)                3,127
                               ----------     ----------          ------------

Total assets
less current
liabilities                        10,983          5,538                12,111

Creditors:
amounts
falling due
after more
than one year                      (4,266)         (2,876)                (4,395)

Provisions for
liabilities
and charges                          (545)           (304)                (1,140)
                               ----------      ----------           ------------

Net assets                          6,172           2,358                  6,576
                               ----------      ----------           ------------

Capital and reserves

Called up
share capital                         880             875                    875
Share premium
account                             4,331           9,975                  9,975
                               ----------      ----------           ------------
Special
reserve                             5,709               -                     --
Profit and
loss account                       (4,748)         (8,492)                (4,274)
                               ----------      ----------           ------------

Shareholders'
funds                               6,172           2,358                  6,576
                               ----------      ----------           ------------


Consolidated Cash Flow Statements

              Six months to 30 June 2003   Six months to 30 June 2002   Year to 31 December 2002
                                   £'000                        £'000                      £'000
                             (Unaudited)                  (Unaudited)                  (Audited)

Net cash
(outflow)/
infl
ow from
operating                           (811)                       7,673                      5,204
activities                    ----------                   ----------                -----------

Returns on
investments
and servicing
of finance

Interest
received                              69                            -                        184
Interest                            (204)                        (136)                      (386)
paid                          ----------                   ----------                -----------

Net cash
outflow from
returns on
investments
and servicing
of finance                          (135)                        (136)                      (202)
                              ----------                   ----------                -----------

Capital
expenditure

Purchase of
tangible
fixed                               (449)                      (3,541)                    (5,145)
assets
Insurance
proceeds in
respect of
tangible
fixed                                  -                            -                      1,939
assets                        ----------                   ----------                -----------

Net cash
outflow from
capital
expenditure                         (449)                      (3,541)                    (3,206)
                              ----------                   ----------                -----------

Financing

Issue of
shares                                70                            -                          -
New debt                             200                            -                      1,395
Capital
element of
finance lease
and loan
payments                            (438)                        (257)                      (695)
                              ----------                   ----------
                                                                                         -----------

Net cash
(outflow)/
infl
ow from                             (168)                        (257)                         700
financing                     ----------                   ----------                  -----------

(Decrease)/
inc                               (1,563)                       3,739                        2,496
rease in cash                 ----------                   ----------                  -----------



Notes to the Interim Information

for the six months ended 30 June 2003

1.       The interim financial information has been prepared on the basis of the
accounting policies set out in the company's 2002 statutory financial
statements.
2.       The calculation of the basic earnings/loss per share is based on the
profits/losses attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period.

                       Profits/losses                Weighted average               Basic earnings/
                      attributable to                number of shares                loss per share
                             ordinary                                               amount in pence
                         shareholders                      


Six                      (£474,000)                          29,158,995                        (1.63p)
months
ended 30                 
June
2003

Six                        £284,000                          29,025,570                          1.0p
months
ended 30                   
June
2002

Year                     £3,238,000                          29,025,570                         15.5p
ended 31                 
December
2002

During the period ended 30 June 2003, options existed which had the
anti-dilutive of increasing the weighted average number of shares by 497,952 to
29,656,947. The diluted loss per share for the period ended 30 June 2003 was
1.6p.

During the year ended 30 June 2002, options existed which had the anti-dilutive
effect of increasing the weighted average number of shares by 141,847 to
29,167,417. The diluted profit per share for the period ended 30 June 2002 was
1.0p.

During the period ended 31 December 2002, options existed which had the
anti-dilutive effect of increasing the weighted average number of shares by
283,666 to 29,309,236. The diluted profit per share for the year ended 31
December 2002 was 15.4p.

3.       With an effective date of 27 June 2003, the company embarked upon a
capital restructuring whereby an amount of £5,709,000 was transferred from share
premium account to special reserve. This special reserve will be maintained
until all the creditors of the company existing at the effective date have been
paid off, at which time the special reserve will become distributable.

4.       The financial information set out above does not constitute the
company's financial statements for the year ended 31 December 2002. The
statutory financial statements for the year ended 31 December 2002 have been
delivered to the Registrar of Companies and the auditors' report on those
financial statements was unqualified and did not contain statements under
Section 240 of the Companies At 1985. The financial statements for the six
months ended 30 June 2003 and 30 June 2002 are unaudited.

5.       This statement has been sent to all shareholders and can be obtained
from the company's registered office: Ideal Home House, Newark Road,
Peterborough PE1 5WG.




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