Final Results - Year Ended 31 December 1999

Surgical Innovations Group PLC
28 March 2000


                SURGICAL INNOVATIONS GROUP PLC
   Preliminary Results for the year ended 31st December 1999

Surgical Innovations Group plc, the AIM listed provider of
healthcare products primarily for the operating theatre, has
announced its preliminary results for the year ended December
31st 1999.

Highlights
*    Loss for the year reduced to £694,000 (1998: £1.07m).

*    Turnover is reduced due to the disruptions encountered
     with blood products but profitability is increased in overall
     margins from 48.6% to 56.7% due to strict financial control.

*    Decision to capitalise on research and development
     expertise with the creation of a new division, ION Product
     Solutions, offering design and manufacturing services to other
     healthcare companies.

*    The licence agreement with Genzyme USA performed well
     with a sharp increase in royalties.

*    Further products added to UK distribution.

*    Conversion of loan notes - 94 % now converted
     strengthening the balance sheet.

*    Additional license agreement with Genzyme France to
     design and manufacture a new range of devices for minimally
     invasive surgery.

*    F4 range launched in Autumn has been well received.

Commenting on the results, Douglas Liversidge Chairman said: '
I have long believed that the future for British Industry lies
in  its  inherent  skills in innovation and  design.  Surgical
Innovations has great strengths in its innovative  talent  and
because  of  its extensive contacts within the surgical  arena
and an ability to react in a timely and effective manner it is
well placed to develop strongly in this area.'

The   financial   information  set  out  in  the   preliminary
announcement does not constitute Statutory Accounts as defined
in Section 240 of the Companies Act 1985.

The  financial information has been extracted from the Group's
1999  Statutory Financial Statements upon which  the  Auditors
opinion  is  unqualified and does not  include  any  statement
under Section 237 of the Companies Act 1985.

For further information:
Surgical Innovations Group plc          Citigate Dewe Rogerson
Ian Lomas - Managing Director           Keeley Middleton/Grace Marriner
Tel: [phone]                      Tel : [phone]


                               
                SURGICAL INNOVATIONS GROUP PLC
                     Chairman's Statement

In  December last year it was announced that Brian Long  would
be  stepping down as Chairman of your Company and that I would
be   taking  over  the  role.   I  was  Chairman  of  Surgical
Innovations  Ltd  before  the merger  and  have  been  a  non-
executive  Director  of  the  merged  company  since.   I   am
delighted  to take the role as Chairman of what I know  is  an
exciting and innovative company.

One  of  my first actions as Chairman has been to institute  a
full  strategic review of the four areas of activity  of  your
Company.   In  looking to the future it is essential  that  we
concentrate  on  those aspects of our business  that  give  an
opportunity  for  long-term growth and profitability.   It  is
your Board's intention to implement the positive outcomes from
this  review  as soon as is practicable and I  will  keep  you
updated of any changes that we may make.

Financial results

The  results for the year show a reduction of £378,000 in  the
loss  for  the  year £694,000 (1998: £1.07m) despite  turnover
being down at £1.3m, a reduction of £400,000 from the previous
year  at  £1.7m.  The increase in profitability is twofold:  a
reduction in administrative expenses of £397,000 due to strict
financial  control  and an increase in  overall  margins  from
48.6% to 56.7%.  The reduction in turnover is attributable  in
the  main  to  the  disruptions  encountered  with  the  blood
products,  which we have reported in previous statements.  The
minimally  invasive surgical products, which we have  licensed
to  Genzyme  have  helped  margins through  the  royalties  we
receive  but  also  contribute to the top  line  reduction  in
turnover.  Tight  cost  controls and  increased  profitability
remain priorities as we go forward.



Summary of Financial Results
                               
                                      Year to      Year to
                                      31/12/99     31/12/98
                                                  
 Turnover                                1,255        1,669
 
 Gross margin                              712          811
 
 Overheads before exceptional items     (1,333)      (1,730)
                                               
 Exceptional costs                           -         (399)
 
 Exceptional income                          -          269
 
 Operating Loss                           (621)      (1,049)
                                               
 Net Loss for the Year                    (694)      (1,072)
                                               
                                               

Report on operations

Following  the merger and the creation in the year  of  a  new
division, the Group now has four main business areas.

Surgical Innovations Limited

This  division  concentrates on the development of  innovative
medical  devices  for  sale  by our  direct  sales  force  and
international distributor network. The licence agreement  with
Genzyme  in the USA for two of our minimally invasive products
continues to develop well with sales in North America  showing
a  sharp  increase as evidenced by recent rises  in  royalties
received.  The agreement signed with Genzyme France in  August
last year for a port access device' is also going well and we
are  pleased  to  announce that Genzyme France  have  forecast
sales  well  ahead  of their original estimates  and  recently
doubled  their order with us. We will start to see the benefit
of this additional business during our current financial year.
In addition to this, we have since reached a further agreement
with  Genzyme France to design and manufacture a new range  of
devices  for  minimally  invasive  surgery  centred   on   the
prevention of post operative adhesion formation.

                                                              
The  F4  range of hand held instruments for minimally invasive
surgery,  which  was launched in the autumn, has  had  a  very
favourable  response.  Recent evaluations of the product  have
been carried out in the UK, Europe and Australia with positive
results  and  customer  orders are now  being  processed.   In
October the Company won the Gold Award at the PRW Awards  for
Excellence'  for the  design of this range.   The  awards  are
held only once every three years and Surgical Innovations beat
hundreds  of  nominations from a broad spectrum of industries.
Previous winners of the award, such as Glaxo Welcome's  multi-
dose powder inhaler, have gone on to become market leaders  in
their field.

ION Product Solutions

In  December  last  year we announced the creation  of  a  new
division,  ION  Product  Solutions, which  offers  design  and
manufacturing services to other healthcare companies.  R&D has
always  been the main driving force behind the Group's success
and  the  Company has taken the decision to capitalise further
on  its  R&D  in-depth expertise, to become the  premier  fast
track provider of medical device solutions.  The division  has
been well received in the market.  We have been encouraged  by
the speed at which potential contracts with global players  in
the  medical device sector have come through and we anticipate
that  the  benefits  of this new division will  contribute  to
Group profitability in the current financial year.

Haemocell

Disruptions  to  our blood products have had  a  disappointing
effect  on  turnover in the period reported.  However,  I  can
report that the post-operative system, which was introduced in
June,  has been well received and began to contribute to Group
turnover in the second half. The intra-operative system, which
was  on restricted supply until September last year, has  also
been well received but the increased cost of supplies and  the
strong  pound  are  reducing profit margins  in  international
markets.

UK Distribution

This  division markets our own and third party products  aimed
at   the   operating   theatre.  The   Group   has   sole   UK
distributorship agreements for the third party products. Since
our year-end we have added a further three products, expanding
our  range in the minimally invasive surgical market.  We have
also  enlarged  our  sales  force to support  this  increasing
portfolio.

Conversion of loan notes

In  February  2000  we announced that at the  request  of  the
holder  of  more  than 75% of the Company's  6.5%  Convertible
Unsecured Loan Notes 2005 (the 'Loan Notes'), the Company  had
agreed  to alter the conversion period applicable to the  Loan
Notes  for  the  current calendar year. The  major  loan  note
holder  has recently completed the conversion of all of  their
loan  notes and at this time 94% of all loan notes  have  been
converted. The major benefit of this conversion will  be  seen
during the current financial year.  Firstly, the Company  will
save  in  excess of £120,000 per annum in loan  note  interest
payments  in  each  of  the next five years.   Secondly,  both
Company  and  Consolidated Balance Sheets will be strengthened
substantially with the removal of £1,864,000 of long-term debt
and  subsequent  conversion into £497,000 of additional  share
capital and a £1,367,000 increase in share premium reserve.

Whilst  the number of shares in issue will increase from  204m
to  253m  it  is the Board's belief that shareholder  dilution
will  be  more than offset by the benefits resulting from  the
loan note conversions.


Strategic plans and prospects

I have long believed that the future for British Industry lies
in  its  inherent  skills in innovation and  design.  Surgical
Innovations  is an excellent example of such a company.   Your
Company  has  great  strengths in its  innovative  talent  and
because of

Its  extensive  contacts  within the  surgical  arena  and  an
ability  to react in a timely and effective manner it is  well
placed to develop strongly in this area.

The  problems with our blood products have prevented  us  from
taking  any  positive  steps in the  acquisition  field.   The
strategic  review now in hand will give a clear guide  on  our
future  direction and I look forward to reporting  to  you  on
progress in the near future.

A  special  thank  you  also to all our staff  and  my  fellow
Directors  whose  effort  and  diligence  is  central  to  the
continued success of the Company.

D B Liversidge
28th March 2000


SURGICAL INNOVATIONS GROUP PLC
Consolidated profit and loss account

                                      31 December  31 December
                                          1999         1998
                                         £'000        £'000
                                                   
 Turnover (including licence fees)         1,255        1,669
 Cost of sales                              (543)        (858)
                                                   
 Gross profit                                712          811
                                                   
 Administrative expenses before           (1,333)      (1,730)
 exceptional items
 Exceptional administrative expenses           -         (399)
                                                   
 Administrative expenses                  (1,333)      (2,129)
                                                   
 Exceptional other operating income            -          269
                                                   
 Operating loss                             (621)      (1,049)
 Interest receivable                          49           71
 Interest payable                           (122)         (94)
                                                   
 Loss for the year                          (694)      (1,072)
                                                   
 Loss per ordinary share                    (0.3p)       (0.5p)


SURGICAL INNOVATIONS GROUP PLC
Consolidated balance sheet

                                      31 December      31 December
                                           1999           1999
                                      £'000    £'000 £'000    £'000
                                                              
 Fixed assets                                                 
 Tangible assets                                 312            323
 Current assets                                               
 Stocks                                 349            362      
 Debtors                                377            307      
 Cash at bank                           767          1,369    
                                      1,493          2,038    
                                                              
 Creditors: amounts falling due        (601)          (459)    
 within one year
                                                              
 Net current assets                             892           1,579
                                                              
 Total assets less current                    1,204           1,902
 liabilities
 Creditors: amounts falling due after                         
 more than one year:
 Convertible debt                            (1,966)         (1,961)
                                              
 Other                                            -              (9)
                                                              
 Net assets                                    (762)            (68)
                                                              
 Capital and reserves                                         
 Called up shared capital                     2,040           2,040
 Share premium account               14,654          14,654   
 Capital reserve                        329             329      
 Accumulated losses                 (17,785)        (17,091)   
                                                                                
                                            (2,802)         (2,108)
                                                              
 Equity shareholders' funds                    (762)            (68)
                                                              




As at the 27th March 2000, £1,864,000 of Convertible debt had
been converted into £497,000 of Called up share capital and a
£1,367,000 increase in Share premium reserve, thereby creating
a net asset position.
SURGICAL INNOVATIONS GROUP PLC
Consolidated cash flow

                                        31 December     31 December
                                            1999           1998
                                        £'000   £'000  £'000  £'000
                                                              
 Net cash outflow from operating                 (372)       (1,025)
 activities                                                   
 Returns on investments and servicing                         
 of finance
 Interest received                        49              71     
 Interest paid                          (116)            (85)   
 Interest element of finance lease        (1)             (9)    
 rentals
 Net cash outflow from returns on                             
 investments and servicing of finance             (68)         (23)
                                                              
 Capital expenditure                                          
 Purchase of tangible fixed assets      (117)           (107)  
 Sale of tangible fixed assets             7              10     
 Net cash outflow from capital                   (110)         (97)
 expenditure
                                                              
 Net cash outflow before financing               (550)      (1,145)
                                                              
 Financing                                                    
 Issue of ordinary shares                  -               2      
 Issue of debt                             -           2,000  
 Expenses paid in connection with debt     -             (26)   
 issue
 Principal repayments under finance      (81)           (130)  
 leases and loans
 Net cash (outflow)/inflow from                   (81)      (1,846)
 financing                                                    
                                                              
 (Decrease)/increase in cash                     (631)         701