Final Results

Aortech International PLC
28 June 2002

                         AORTECH INTERNATIONAL PLC

                           Preliminary results

                            New CEO appointed


AorTech International plc, the Scottish-based manufacturer of cardio-vascular
devices, announces its Preliminary Results for the year ended 31 March 2002.


HIGHLIGHTS

•        Product sales increase 25% to £4.6 million

•        TruCCOMS adopted by 33 centres, further 34 continuing evaluation

•        Tri-leaflet heart valve entered regulatory trials; commenced October
         2001

•        Second Elast-eon agreement signed

•        Cash reserves at the year end were £16.6 million



Post period Events

•        CEO appointed, Board restructured

•        Manufacturing rationalised; sub-contract agreement with BD (Becton
         Dickinson)

•        Letter of Intent to acquire BD Critical Care division


Eddie McDaid, Chairman, commented:

'The past year has been one of change for the Company.  Although the Company has
made continued progress in the development of our technologies I, together with
the Directors, share the disappointment of our shareholders with the performance
of our share price in what  have been difficult market conditions for many
technology stocks.  Although delays in both our clinical trials and sales of our
TruCCOMS system have been experienced, the Group is now moving from being
focused on the development of innovative technologies to their commercial
exploitation.

'The search for the Chief Executive has been concluded with the appointment of
Bill Strachan and we have taken the opportunity to rationalise and restructure
the Board in order to streamline the corporate structure.

'We have made the necessary changes to strengthen the Senior Management of the
Company to ensure the success of this commercialisation programme.  The changes
which have been implemented have enabled a platform to be put in place to ensure
a promising future for our company.'


Bill Strachan commented:

 'I am excited by the new challenge.  AorTech has had a difficult year but they
retain several outstanding technologies which are ready to be commercialised.  I
see it as my role to build upon the work done to date and to ensure that we are
successful in exploiting the world leading technologies.'


                                                                 28 June 2002


ENQUIRIES:

AorTech International plc                              Tel: [phone]
Eddie McDaid, Chief Executive

Bell Lawrie White & Co                                 Tel: [phone]
Clive Thomson / Elizabeth Kennedy

College Hill                                           Tel: [phone]
Michael Padley / Clare Warren



CHAIRMAN'S STATEMENT

I am pleased to present the Preliminary Statement for AorTech International plc
for the year ended 31 March 2002.

General

The past year has been one of change for the Company, with our Chairman, Gordon
Wright standing down in March for health reasons.  Gordon and I founded AorTech
in November 1992 and he was instrumental in the development of the Group,
particularly in those early years.  In wishing him well for the future, I take
this opportunity to thank Gordon for his vision, support, commitment and
contribution towards the development and growth of AorTech.

Management Changes


You will know that, following Gordon's departure, I assumed the responsibilities
of both Chairman and Chief Executive until a suitable candidate could be
selected to take on the Group Chief Executive position.  The search for the
Chief Executive has been concluded and I have pleasure in announcing the
appointment of Bill Strachan to this important position with effect from 1 July
2002. Bill is a highly experienced Senior Executive within the Medical Device
Industry. He was most recently Vice President and General Manager of Europe of
the Infection Prevention Systems Division in a highly successful 24 year career
with Johnson & Johnson and has been responsible for the creation of high growth
and profitable businesses in a number of different medical device areas.  Under
his guidance these businesses consistently achieved positions of market
leadership in their worldwide segments.  His early career was spent in the
pharmaceutical industry, with another world class organisation the Eli Lily & Co
Group.  Bill's appointment brings, we believe, the appropriate expertise and
leadership required to redress the fortunes of the Company and to enable the
underlying value of the Group's technologies to be realised.

I am also pleased to announce the appointment of Frank Maguire to the Executive
Management team.  Frank replaces John Ranieri, who due to personal
circumstances, leaves the Company at the end of August 2002.  Frank has
extensive experience in the cardiovascular area and has 24 years experience in
the medical device industry.  Frank was Vice-President of Baxter Research
Medical, a division of the Baxter Healthcare Group and guided this division
through a period of substantial growth via acquisitions in the late nineties,
introducing new products to the market and establishing innovative product lines
for Baxter Healthcare.

We have taken the opportunity to rationalise and restructure the Board, which
has been done in accordance with Corporate Governance best practice in order to
streamline the corporate structure. John McKenna, Dr Peter Duijst, Bruno
Lowinger, Professor David Williams and John Ranieri will retire from the plc
Board on 1 July 2002. I would like to take this opportunity of thanking these
Directors, who are continuing their executive responsibilities within the
AorTech Group, for the significant contribution they have made during their
period of office on the Board. With effect from 1 July 2002, the plc Board will
comprise myself, as Chairman, Bill Strachan, Chief Executive and Ian Cameron,
Finance Director, with Alistair Gray, Francis Madden and Jonathan Brooks as non
Executive Directors.


Proposed Acquisition of the Critical Care Products of Becton Dickinson

We announced on 9 April 2002 that we had entered into a non binding Letter of
Intent with BD (Becton Dickinson & Co) to acquire BD's critical care business.
However, due to technical issues which arose recently, there has been a delay in
the completion of this transaction.  Negotiations in relation to the definitive
agreements and funding are near to completion, with funding in place.  Assuming
that the technical issues are resolved to our satisfaction, we would hope to
conclude the acquisition shortly.

Results

The results for the year ended 31 March 2002 show a loss of £12.9 million
against a loss of    £6.2 million for the previous year.  The increased loss is
stated after charging £6.8 million in respect of development expenditure written
off during the year, £2 million in respect of depreciation and amortisation and
£1.3 million in respect of exceptional costs incurred on the proposed
acquisition of BD.  Cash reserves at the year end were £16.6 million.  We have
introduced a change in accounting policy by adopting a conservative stance on
revenue recognition which, although not covered under UK Accounting Standards,
is a requirement under US Accounting Standards.   Sales were previously invoiced
by the Company in certain circumstances on a bill and hold basis, whereby
customers were invoiced for goods but the Company, at the customer's request,
held and delivered them by instalments.  These sales are not now recognised as
sales revenue until the goods are received by the customer.  The Board feel that
this is a prudent position to take.  As a result of this adjustment, the sales
decreased by approximately £82,000 during the year to 31 March 2002 and losses
increased by approximately  £72,000.

Although our product sales increased to £4.6 million (an increase of 25% over
the previous year) this is less than anticipated due to the lower than expected
sales of TruCCOMS, the reasons for which are set out below.

TruCCOMS

Although the marketing of TruCCOMS continued in the USA and Europe, during the
latter part of the financial year we responded to feedback from customers on the
TruCCOMS monitor and as a result made adjustments to the monitor software.
These adjustments were only possible subsequent to sales and feedback from
customers and therefore this resulted in lower than anticipated sales during the
financial year. With changes to this software now implemented and available in
the market place, feedback from customers is positive and the Directors are
confident that our continued marketing efforts will lead to enhanced sales
during the current financial year.

Initially, our monitors were placed in 85 centres in Europe and 28 centres in
the USA.  Approximately 160 monitors have now been updated with revised software
with 33 hospitals in Europe adopting the TruCCOMS system from the 52 hospitals
currently evaluating it. In addition, in the USA, a further 15 centres are
evaluating the system.

The focus of our marketing and sales efforts is directed at surgical physicians
and anaesthetists (being the personnel involved in the care of patients whilst
in operating theatres) in numerous cardiac hospitals with the system being used
in particular in 'off-pump surgery'.  This involves the patient relying on his/
her own heart and lung activity during surgery rather than on an external
mechanical pump.  Independent Data (IMS 2000 Data; Society of Critical Medicine,
2000 Data; US Government Health Cost and Utilisation Statistics, 2001)
anticipates increased use of         'off-pump surgery' in the USA (where
currently 20% of all Coronary Artery Bypass Surgery ('CABG') procedures are
performed 'off-pump') to the extent that it is anticipated that 40% to 50% of
all CABG procedures performed in the USA over the next four to five years will
be     'off-pump'.  During these critical operations the TruCCOMS monitor
provides surgeons and anaesthetists with the ability to determine changes in
patients' cardiac output immediately and to take the necessary corrective action
thus providing improved patient management.

In addition we announced on 24 May 2002 that we had entered into a sub-contract
agreement with BD for the manufacture of TruCCOMS catheters at BD's plant in
Singapore. As a result, the Directors anticipate that there will be a
significant reduction in the cost base of our Critical Care business.  It is
regrettable however that following this rationalisation a number of our
employees in Scotland have been made redundant.  These steps were however,
deemed necessary in order to increase our competitiveness and improve the
performance of the Group.


New Tri-leaflet Heart Valve

The regulatory testing phase of our new tri-leaflet heart valve commenced in
early October 2001 and represents the next phase of testing in order to meet the
requirements of both European Regulators and the FDA in the USA prior to
commencing clinical trials with the heart valves in patients. On 29 May 2002 we
announced performance issues in respect of testing of our valves in the
regulatory phase.  Although earlier results from a number of our valves show
excellent performance and meet initial expectations there will be a delay in our
clinical trials in patients because of performance issues relating to these
valves.  A further announcement will be made when all the relevant tests are
completed and evaluated during the course of the next few months.

Previous attempts to develop a new synthetic tri-leaflet heart valve were based
on using polyurethane materials which, although they had good mechanical
properties, did not exhibit the level of biostability required for use in a
heart valve.  The Elast-eon material which forms the basis of AorTech's
synthetic tri-leaflet heart valve has demonstrated the appropriate mechanical
properties and greater biostability than traditional polyurethanes during the
development phase over several years and, as a result of this successful phase,
we commenced the regulatory phase testing in October 2001.

Elast-eon Material

Although the focus of the Elast-eon material has been to provide the necessary
material for the tri-leaflet heart valve there are other potential uses for the
material in implantable medical devices.  There are ongoing Material Evaluation
Agreements with a number of medical device companies and there have been two
Material Evaluation Agreements which have resulted in Licence Agreements - one
with JOMED to utilise the material for stent application and one with Sunshine
Heart to utilise the material in cardiac assist devices.  Stents are support
devices used frequently after angioplasty, a method which is used to eliminate
the narrowing of blood vessels, stents supporting and maintaining the opening of
the blood vessels. Reuters have reported that Wall Street analysts forecast that
the market for this business is expected to grow to approximately US$5 billion
over the next few years. Sunshine Heart has developed a fully implantable
peri-aortic balloon device to provide long-term relief and recovery for patients
from chronic heart failure.

Whilst conventional medical and invasive surgical approaches are the current
practice in the treatment of heart failure and disease, the Directors believe
there is clinical need for devices which are more efficient at improving heart
function to avoid the costs and complications of ventricular assist devices.

It is AorTech's intention to review other opportunities for the use of Elast-eon
in the development of stents and ventricular assist devices.

We have recently taken steps to rationalise and restructure our organisation in
Australia with the intention of locating our operations within one facility in
Melbourne.

Future Prospects

Although the Company has made continued progress in the development of our
technologies I, together with the Directors, share the disappointment of our
shareholders with the performance of our share price in what have been difficult
market conditions for many technology stocks.  Although delays in both our
clinical trials and sales of our TruCCOMS system have been experienced, the
Group is now moving from being focused on the development of innovative
technologies to their commercial exploitation. With the support of the Board, I
have continued to make the necessary changes to strengthen the Senior Management
of the Company to ensure the success of this commercialisation programme.

I take this opportunity of thanking our Directors and employees of the Group for
their commitment and contribution towards the changes which have been
implemented during a difficult year, and which has enabled a platform to be put
in place to ensure a promising future for our company.

                                                                       E. McDaid
                                                                Joint Chairman &
                                                                 Chief Executive
                                                                    28 June 2002




CONSOLIDATED PROFIT AND LOSS ACCOUNT


                                                                                                restated
                                                                         Year Ended           Year ended
                                                         Note         31 March 2002        31 March 2001
                                                                                  £                    £


Turnover                                                  1              4,626,955            3,701,365

Cost of sales                                                           (2,555,856)          (1,667,653)


Gross profit                                                             2,071,099            2,033,712

Selling and marketing costs                                             (2,863,689)          (1,065,257)
Administrative expenses                                                (13,022,661)          (7,953,999)
         Administrative expenses include:
         Development expenditure                                        (6,811,308)          (4,626,361)
         Amortisation of intangible fixed assets                        (1,247,469)          (1,227,586)
         Costs incurred on  proposed acquisition                        (1,267,474)                   -


Loss on operating activities before interest                           (13,815,251)          (6,985,544)

Interest receivable                                                        931,594               785,838
Interest payable                                                                 -              (25,755)



Loss on ordinary activities before and after taxation                  (12,883,657)          (6,225,461)



Loss per ordinary share                                   2
Basic                                                                      (34.69p)             (20.75p)
Diluted                                                                    (34.69p)             (20.75p)


Statement of Total Recognised Losses

Loss for the financial year                                              (12,883,657)         (6,225,461)

Currency translation differences arising on consolidation                    (47,487)           (211,990)


Total recognised losses relating to the year                             (12,931,144)         (6,437,451)

Prior year adjustment                                        3               (53,487)

Total losses recognised since last annual report                         (12,984,631)



CONSOLIDATED BALANCE SHEET


                                                                                                   restated
                                                                                 2002                  2001
                                                                                    £                     £
Fixed Assets
Intangible Assets                                                           21,075,294           22,137,882
Tangible Assets                                                              4,828,832            2,535,126

                                                                            25,904,126           24,673,008


Current Assets
Stocks                                                                       3,992,311           2,634,303
Debtors                                                                      2,381,808           2,846,994
Cash at Bank                                                                16,558,880           8,325,970


                                                                            22,932,999          13,807,267

Creditors: amounts falling due within one year                              (2,508,234)         (2,377,592)


Net Current Assets                                                          20,424,765          11,429,675


Total Assets less Current Liabilities                                       46,328,891          36,102,683

Deferred Income                                                               (120,072)           (139,734)



Net Assets                                                                  46,208,819          35,962,949



Capital and Reserves
Called Up Share Capital                                                      9,525,696           7,547,341
Share Premium Account                                                       63,359,593          42,160,934
Other Reserve                                                               (2,003,143)         (2,003,143)
Profit and Loss Account                                                    (24,673,327)        (11,742,183)


Equity Shareholders' Funds                                                  46,208,819          35,962,949



CONSOLIDATED CASH FLOW STATEMENT



                                                                                        restated
                                                                                2002                  2001
                                                                                   £                     £

Net cash outflow from operating activities                              (13,821,019)           (5,096,432)

Returns on investment and servicing of finance                              832,425               812,130

Capital expenditure and financial investment                             (2,982,325)           (1,917,169)


Cash outflow before management of liquid resources and financing        (15,970,919)           (6,201,471)

Management of liquid resources                                           (8,335,126)            7,831,938

Financing                                                                24,186,714            (1,461,733)


(Decrease)/increase in cash in year                                        (119,331)              168,734



NOTES



Note 1    Segmental analysis by class of business and geographical area


(a) Class of business       The Group operates in one class of business

(b) Geographical area       The analysis by geographical area of the Group's 
                            turnover is set out below:

                                                                                   restated
                                                  2002                               2001
                                       Destination          Origin       Destination              Origin
                                                 £               £                 £                   £
Geographical segment
United Kingdom                           1,170,269       3,541,413           888,922           2,878,834
Rest of Europe                           2,918,684         818,863         2,686,888             726,399
Rest of World                              538,002         266,679           125,555              96,132
                                         4,626,955       4,626,955         3,701,365           3,701,365



Note 2    Loss per ordinary share



The basic loss per ordinary share is calculated on the loss of the group of
£12,883,657 (restated 2001 - £6,225,461) and on 37,137,110 (2001 - 29,999,033) 
equity shares.

Note 3 Prior Year Adjustments

During the year, the Company changed its policy with regard to revenue
recognition.  Previously, revenue was recognised in respect of bill and hold
sales where customers are invoiced for goods but the Company continues to hold
them.  Revenue was recognised in such transactions on invoicing rather than
delivery to customers.

Under the new accounting policy, revenue is recognised only when goods are
invoiced and shipped to customers.

The effect of this change in accounting policy on the current year was to
decrease sales by £82,197 (2001: £349,220), to decrease cost of sales
by £10,236 (2001: £336,833) and to increase the loss for the year by £71,961
(2001: £12,837).  The change of policy reduced shareholders' funds by £53,487 as
at 1 April 2001.


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