Interim Results

Surgical Innovations Group PLC
30 September 2002


Surgical Innovations Group plc

Interim results

30 September 2002


CHAIRMAN'S STATEMENT

I am pleased to report that for the six months to 30 June 2002 your Group made
an operating profit of £22K on turnover of £968K.  After net interest payable of
£2K there was an operating profit of £20K.  For the same period in 2001, there
was an operating loss of £6K, on turnover of £728K, which, after net interest
receivable of £6K, resulted in a break-even position.

The global economic slowdown has affected some of our customers, particularly in
the United States, and as a result we will not meet financial expectations for
the current year.  However, we believe this to be only a temporary phase and
that all the market indicators suggest that we will return to a positive trend
in 2003. In fact sales of our core products outside of the USA continue to
increase through our worldwide network of distributors despite our limited
resources.

Sales of YelloPort, our re-usable port access system for minimally invasive
surgery in the USA have not maintained the planned momentum.  However, we do
anticipate an increase in 2003 as our exclusive partner develops their equipment
management system which involves ready-for-use equipment trays containing our
equipment.

Sales under the Aesculap, Inc. contract have been delayed.  We have used this as
an opportunity to effect a re-appraisal of the product offering and to develop
single use-scissors compatible with Aesculap's own product range, thus enabling
them to access their existing international customer base with this product.

We have also completed the development of our new Logic 'pistol grip' handle,
which we believe will lead to a greater impetus for global sales of our F1
single-use scissors.

In anticipation of increased sales of scissors, we have invested in a dedicated
manufacturing facility which is now fully operational.  This has been funded
from our own cash resources together with leasing arrangements on both machinery
and associated tooling.

The development programme for the next generation port system, with the support
of the SMART award, has progressed throughout the period.  We had anticipated a
product launch date towards the end of the current financial year.  However,
this is now likely to be early in the new year, although it is our intention to
have a pre-launch at Medica 2002, the premier international medical exhibition
which is to be held in Dusseldorf in November.



Royalty income continues to form a significant part of group income. Having
approached our licencee, Snowden Pencer, we are keen to develop a successor to
EndoFlex - our articulated retraction device - in order to maintain our
prominent position within this market sector in future years.



We note with anticipation the upsurge in interest surrounding the subject of
autologous blood, both in the press and at government level.  The cost of
donated blood continues to increase substantially as more testing for
transmissible diseases becomes essential.  We believe we are in a prime position
to capitalise on this interest as more hospitals have to consider the autologous
blood alternative and more patients request their own blood to be re-cycled,
especially for elective surgical procedures.



We continue to look for corporate opportunities which can enhance shareholder
value.  However, we are applying a cautious approach whilst ensuring that we
concentrate on the development of our core businesses.



DOUG LIVERSIDGE CBE

Chairman

30 September 2002





CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the 6 months ended 30 June 2002




                                                               Unaudited         Unaudited            Audited
                                                             6 months to       6 months to       12 months to
                                                                30.06.02          30.06.01           30.12.01
                                                                    £000              £000               £000

Turnover (including licence fees)                                    968               728              1,847


Cost of sales                                                      (431)             (333)              (846)
                                                              ----------        ----------         ----------

Gross profit                                                         537               395              1,001

Administrative expenses before
exceptional item                                                   (515)             (401)              (900)

Exceptional item
     abortive acquisition costs                                        0                 0               (72)
                                                              ----------        ----------         ----------


Operating profit / (loss)                                             22               (6)                 29


Net interest (payable) / receivable                                  (2)                 6                  7
                                                              ----------        ----------         ----------

Profit on ordinary activities before taxation                         20                 0                 36


Tax on profit of ordinary activities                                   0                 0                 48
                                                              ----------        ----------         ----------

Retained profit attributable to ordinary
shareholders                                                          20                 0                 84
                                                                  ======            ======             ======

Profit per ordinary share                                         0.008p             0.00p             0.033p
                                                                  ======            ======             ======





CONSOLIDATED BALANCE SHEET

As at 30 June 2002


                                                                 Unaudited         Unaudited           Audited
                                                                  30.06.02          30.06.01          30.12.01
                                                                      £000              £000              £000
Fixed Assets

Tangible Assets                                                        428               271               282
                                                                ----------        ----------        ----------

Current Assets

Stock                                                                  625               448               549
Debtors                                                                637               479               825
Cash at bank in hand                                                   124               391               170
                                                                ----------        ----------        ----------
                                                                     1,386             1,318             1,544


Creditors:
Falling due within one year                                          (515)             (422)             (574)
                                                                ----------        ----------        ----------

Net current assets                                                     871               896               970
                                                                ----------        ----------        ----------

Total assets less current liabilities                                1,299             1,167             1,252

Creditors: amounts falling due after more than one year
                                                                     (110)             (110)             (111)
                                                                ----------        ----------        ----------

Net assets                                                           1,189             1,057             1,141
                                                                    ======            ======            ======

Capital and reserves

Called up share capital                                              2,555             2,540             2,540
Share premium account                                               16,044            16,030            16,030
Capital reserve                                                        329               329               329
Accumulated losses                                                (17,739)          (17,842)          (17,758)
                                                                ----------        ----------        ----------

Equity shareholders' funds                                           1,189             1,057             1,141
                                                                    ======            ======            ======



CONSOLIDATED CASHFLOW STATEMENT

For the 6 months ended 30 June 2002


                                                                   Unaudited         Unaudited           Audited
                                                                 6 months to       6 months to      12 months to
                                                                    30.06.02          30.06.01          30.12.01
                                                                        £000              £000              £000

Net cash inflow / (outflow) from ordinary activities                     117                54             (121)

Returns on investments and servicing and finance                         (2)                 6                 8

Taxation                                                                  10                 0                 0

Capital Expenditure                                                    (191)              (36)              (88)
                                                                  ----------        ----------        ----------
Cash (outflow) / inflow before financing                                (66)                24             (201)

Financing                                                                 28                 1                 0
                                                                  ----------        ----------        ----------
(Decrease) / increase in cash in the period                             (38)                25             (201)
                                                                      ======            ======            ======


Reconciliation of net cash flow to movement in net debt:

(Decrease) / increase in cash in the period                             (38)                25             (201)

Conversion of loan notes                                                   1                 0                 0
                                                                  ----------        ----------        ----------
Movement in net funds in the period                                     (37)                25             (201)

Net funds at the beginning of the year                                    51               252               252
                                                                  ----------        ----------        ----------
Net funds at the end of the period                                        14               277                51
                                                                      ======            ======            ======


Net Cash Inflow / (Outflow) from Operating Activities:

Operating profit/(loss)                                                   22               (6)                29
Depreciation                                                              45                37                78
(Increase) in stocks                                                    (76)              (20)             (121)
Decrease / (increase) in debtors                                         177               122             (176)
(Decrease) / increase in creditors                                      (51)              (79)                69
                                                                  ----------        ----------        ----------
Net cash inflow / (outflow) from operating activities                    117                54             (121)
                                                                      ======            ======            ======





NOTES


1.       The interim report has been prepared on a basis consistent with the accounting policies adopted in the
         Annual Report and Accounts for the year ended 31 December 2001.  The interim report has been approved by
         a duly appointed committee of the Board of Directors and is unaudited.



         The interim report does not constitute statutory accounts within the meaning of Section 240 of the
         Companies Act 1985.  The information for the year ended 31 December 2001 has been extracted from the
         statutory accounts of that date which have been delivered to the Registrar of Companies.

2.       The directors have not declared an interim dividend.

3.       The profit per share is based on the weighted average number of shares in issue during the period. The
         total number of shares in issue at 30 June 2002 was 255,458,165, at 31 December 2001 was 254,037,126 and
         at 30 June 2001 was 254,037,126.





Enquiries:


Surgical Innovations Group
Graham Bowland, Finance Director                       Tel: [phone]

Philip Johnson                                         Tel: [phone]
Brown, Shipley & Co. Limited



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