Final Results

Surgical Innovations Group PLC
29 April 2008


Press Release                                                      29 April 2008

                         Surgical InnovationsTM Group plc

                      ('SI', 'the Company' or 'the Group')

                                   Final Results

Surgical InnovationsTM Group plc (AIM: SUN), the designer and manufacturer of
innovative surgical devices, today reports its final results for the year ended
31 December 2007, which have been prepared in accordance with International
Financial Reporting Standards ('IFRS').

Highlights
•    Revenue up 7% to £4.77m (2006: £4.46m)
•    Operating profit of £685,000 (2006: £735,000)
•    Pre-tax profit up 5% to £731,000 (2006: £696,000)
•    Basic earnings per share of 0.24p (2006: 0.27p)
•    Global launch of YelloPortTM Plus as a 'resposableTM' port access system
•    Strong sales growth in SI branded products
•    Successful fundraising of £4m (before expenses) to aid expansion in the US and to increase SI's device
     portfolio through both product acquisition and internal development
•    Reorganisation of the Group into three trading companies Surgical InnovationsTM  Limited (minimally
     invasive surgery (MIS) devices), Haemocell Limited (autologous blood products) and CORE Precision Limited
     (surgical and industrial solutions for original equipment manufacturer (OEM) partners)

Commenting on the outlook, Doug Liversidge, Non-executive Chairman, said:

'I am delighted that once again we are able to report improved levels of profit
and sales.  The domestic and overseas markets in which we operate are growing
and we are confident that, with our expanding portfolio of products, we will be
able to continue to generate further sales growth throughout the year.  Our
confidence in our future is such that we have just completed a relocation of the
business to facilities that provide us with triple the area of floor space and
the capacity by which we can capitalise on this increasing opportunity.'



For further information:
Surgical InnovationsTM  Group plc
Doug Liversidge CBE, Chairman
Graham Bowland, Finance Director                       Tel: [phone]
[e-mail]                                 www.sigroupplc.com

Hanson Westhouse Limited
Tim Feather / Matthew Johnson                          Tel: [phone]
[e-mail]                          www.hansonwesthouse.com

Media enquiries:
Abchurch Communications
Sarah Hollins / Gareth Mead                            Tel: [phone]
[e-mail]                            www.abchurch-group.com



CHAIRMAN'S STATEMENT

I am delighted to report further progress for Surgical InnovationsTM.  Once
again, the Group has achieved record sales and profit whilst implementing a
restructuring as part of our strategy for future growth.

Group sales grew by 7% to £4.77m (2006: £4.46m).  Importantly, sales within our
core business of devices for Minimally Invasive Surgery (MIS) increased by 7% as
the benefits of our US master dealership with MGM Med Inc., marketing and
selling under the name Surgical InnovationsTM US Inc., have begun to have an
impact on the Group.

Gross margins, which include licence and royalty income from Rolls-Royce for
industrial applications and Cardinal Health for medical devices, rose to 50.2%
(2006: 41.9%) for the year.  Administrative expenses increased significantly as
a consequence of the Group's policy of investing heavily in international
development, training and product evaluations.  This strategy, together with net
interest receivable of £46,000, has delivered an increase in profit before tax
of 5% to £731,000 (2006: £696,000).  A net tax credit of £34,000 results in
retained profits of £765,000 (2006: £696,000).

The confidence we have in the future growth of the Group has led to a recent
relocation of the business.  I am pleased to report that we have consolidated
our operations from five individual units totalling 10,000 sq ft to one location
of 32,000 sq ft, which we believe will lead to substantial operational benefits
through improved working conditions.  This is a major step change for the Group
and the first relocation of the instrument business since trading commenced in
1992.  This move is part of our strategy for growth, enabling management to deal
effectively with the inevitable challenges to come as we continue to build our
international presence.

Group Structure

During the year the Group was reorganised into three separate trading companies:
          
     •    Surgical InnovationsTM  Limited - MIS devices
     •    CORE Precision Limited - Surgical and Industrial solutions
          for OEM partners
     •    Haemocell Limited - Autologous Blood Products

Dividing the Group into three distinct business operations with separate
management structures enables specific focus to be given to each area of the
business and I am delighted with the results each has achieved to date.

Master Dealerships

The Group promotes its devices through a combination of independent specialist
dealers and OEM partners.  To simplify and provide clarity to the business,
master dealer relationships have now been established in the Far East (ACP),
Middle East (Tradevco) and the US (Surgical InnovationsTM US Inc.).  By
undertaking such a policy we are able to reduce administrative costs yet achieve
sales coverage in many markets previously beyond the scope of the Group.  Within
the established European market we continue to develop our portfolio of
specialist distribution partners and we have recently commenced trading
relationships with distributors in several Eastern European countries where the
need for cost effective devices is even more apparent.

Brand Awareness

In order to successfully grow the Group within the medical device sector, it is
critical that we develop and promote our own portfolio of products under
Surgical InnovationsTM brand names.  This policy will lead to an increased
global profile, adding future value to the Group.  YelloPortTM and LogicTM are
established brands and during the year substantial investment was made in both
trademark and intellectual property protection to reinforce brand awareness.

YelloPortTM Plus

During the year significant investment was made in developing YelloPortTM Plus,
a 'resposableTM' port access device that combines reusable main elements and
disposable accessories.  The product was launched to critical acclaim and
initial success has already been seen in the US, UK, South Africa and Belgium.
2008 should see further growth in sales of YelloPortTM Plus as we roll out the
product to our global dealer network and continue hospital evaluations in the
US.  To widen the application of YelloPortTM Plus we are developing a new range
of the product for obesity surgery and we expect this to be fully available for
the second half of the year.

R&D and New Products

One element of our strategy for growth is to create new devices to simplify
current laparoscopic procedures and importantly to develop instrumentation for
the next generation of surgical techniques, namely Single-Incision Laparoscopic
Surgery (SILS) and Natural Orifice Transluminal Endoscopic Surgery (NOTES).  By
strengthening our surgical expertise with the appointment of Professor Mike
McMahon to the Group Board and the establishment of a Clinical Advisory Board,
we are well placed to achieve this objective.

Employees

In order to develop new and innovative products and most importantly, to bring
them to market quickly, we have recently recruited several talented designers to
enhance our development teams in both Surgical InnovationsTM Limited and CORE
Precision Limited.  As with any design-led business, staff expenditure is a
significant investment and the placing of new shares in 2007 provides us with
the resources to fund this important expansion of our core activities.

Placing

As highlighted in the Interim Statement in June 2007, the Group raised £4m
before expenses through the placing of 114 million ordinary shares at 3.5p.  The
funds have been earmarked for our US expansion and product development.  Several
licence opportunities have been brought to our attention and we are currently
reviewing these for acceptability within our current strategy.

The cash injection was important and, given today's financial climate,
emphasises the importance of taking decisive action when such opportunities
arise.  The proceeds of the fundraising have now underpinned the prospects of
the Group, supporting organic growth and enabling us to search out new product
licensing and corporate opportunities.

Board of Directors

I am delighted to welcome to the Board, Professor Mike McMahon, who was
appointed in October 2007 as Non-Executive Clinical Director.  Mike was a
founder of Surgical InnovationsTM Limited in 1992 and, as one of the world's
leading laparoscopic surgeons, he brings a vast wealth of experience to the
Board.  His immediate role is that of Chair of our newly created Clinical
Advisory Board of eminent surgeons, which provides expertise in all the various
disciplines of laparoscopic surgery.

Outlook

We continue to deliver against our strategy for growth, in terms of results and
innovative product development.  New procedures in laparoscopic surgery continue
to be developed leading to an inevitable and exciting increase in the size of
our market across the globe.

The growth in demand for laparoscopic obesity surgery in particular has been
well publicised and our current and forthcoming product ranges position us
favourably to exploit this trend.

We are confident that with expanding markets and our burgeoning portfolio of
products, the Group will return further sales growth during the current year.

The Board recognises that this growth alone may not itself return increased
shareholder value and it is actively seeking to enhance that value through the
purchase of new product licences, development of industrial applications for our
patented medical technology and acquisitions of companies with complementary
products.

Finally, I would like to take this opportunity to thank all Group employees and
my fellow Directors for their continuing support and dedication during a year in
which challenges were successfully faced and overcome.



Doug Liversidge CBE
Chairman
29 April 2008





BUSINESS REVIEW

Surgical InnovationsTM Limited

Overview

Following the reorganisation of the Group during 2007, Surgical InnovationsTM
Limited is responsible for the development of the MIS business segment of the
Group.

The company is itself divided into three distinct areas of operation, design and
development of instrumentation, manufacturing and sales and marketing.  During
2007, the company reported revenues of £4.325m and a profit before taxation of
£712,000.

Revenues primarily result from sales of laparoscopic devices and royalties from
sales of the licensed EndoFlex technology to Cardinal Health.

Device sales are derived from three distinct areas, those from our global
network of distributors, those from our OEM partner, Teleflex Medical and
finally those from the equipment managed service companies operating in the US.

Throughout 2007 we have placed greater emphasis on growing our own distribution
network as well as strengthening our OEM arrangement with Teleflex Medical.  I
am delighted that we are collaborating closely with Teleflex on several device
projects and this can only help in bringing the two organisations closer
together.

Sales to the distribution network continue to increase, £3.267m compared to
£1.845m in 2006.  This 77% increase has enabled the business to develop the
Surgical InnovationsTM brand and particularly the important YelloPortTM and
LogicTM product brands on a global scale.  With increased exposure of our
instruments, significant investment was made in trademark and patent protection,
this policy will continue apace as new devices come to market.

Product Performance

Sales of YelloPortTM increased by 5% to £926,000 (2006: £878,000).  Strong sales
into Europe in particular accounted for 47% of turnover, again testament to the
strength of the distribution network.  UK turnover also increased as we began to
see the benefits of engaging Elemental Healthcare as our UK distributor.

A 5% increase in YelloPortTM was an achievement given the emphasis in the second
half of the year towards YelloPortTM Plus.  During the second half of 2007 sales
of YelloPortTM Plus were £644,000 which provides confidence in our ability to
develop a world class port access system.  Our focus has been in the US and UK
and these markets accounted for 81% of revenues.  The strategy has been to roll
out the product into these markets first and then move into established European
markets, followed by the Middle and Far East.

We will continue to develop YelloPortTM Plus and new line extensions are
currently in development with an obesity portfolio of devices planned for full
availability by the end of June 2008.

As a result of reduced OEM business in 2007, sales of resposable scissors fell
during the year, however sales of LogicTM scissors under our own brand rose by
67% to £575,000.  The US remains a key focus for us and I am delighted that,
after initial evaluations and trials, our scissors sales are beginning to gain
momentum in this high volume market.  Sales to our current OEM partner also
increased in the year by 33% to £423,000 and we are delighted that this business
has been secured for a further three years by the renewal of this contract.

Our QuickRange of fully disposable instruments saw further revenue gains in the
year of 54% and following manufacturing efficiencies, we have been able to both
reduce sales prices whilst maintaining margins.  This has allowed us to remain
active in those markets requiring competitively priced disposable devices.

Sales and Marketing

We continue to embrace new markets and have recently appointed distributors in
Hungary, Romania and Poland as part of our drive into Eastern Europe.
Importantly, we have appointed master distributors in both the Far and Middle
East to complement our US master dealer.  Our UK business continues to develop
at a tremendous rate and revenues improved to £1.0m from £415,000 following the
appointment of Elemental Healthcare as our exclusive distributor.

In order to add value to our dealer network, we are undertaking intensive
product training with dealer representatives and offering increased in-theatre
assistance.  This has been possible by the recruitment of clinical specialists
which has been invaluable with the launch of the YelloPortTM Plus product.

Our new enlarged facility will now enable us to hold on-site international
distributor meetings and we look forward to being able to bring together all our
dealers to discuss product innovation, market needs and share individual
experiences.

Manufacturing

Our manufacturing strategy is one of continuing margin and quality improvement.
Wherever possible manufacturing processes are carried out in-house and
significantly more operations are now carried out within our own facilities to
improve gross margins.  We have taken established production lines of commodity
products off-shore in order to maintain our competitiveness in the market.
Strict quality procedures have been introduced and resources allocated to ensure
product quality is maintained to the highest standards.

The new building provides us with the opportunity to acquire additional high
tech machinery to enhance our precision machine shop environment.

Product Development

During the year £407,000 of cost was expended on product development deemed to
be of long term commercial success.  This level of investment, which represents
9.4% of MIS sales, has only been possible with the funds raised during the year
and will bring added value to the Group in terms of added intellectual property,
new products, new sources of revenue and profitability.  We are already seeing
immediate results with YelloPortTM Plus where sales totalled £644,000 in the
year following a product launch in July 2007.

Our talented design team has been increased with the objective to create new
devices and importantly bring them to market in a reduced period of time.  We
are extremely conscious of the need to generate intellectual property and this
is a key performance indicator for the design team in the current year.

Outlook

The opportunities for Surgical InnovationsTM within the laparoscopic field
remain to be exploited.  The sector shows no signs of slow down and, with
laparoscopic surgery being increasingly performed around the world, the
potential for new product development and associated revenue streams is
considerable.  We remain committed to obtaining product licences and further OEM
opportunities of our own to enhance this organic growth.


Graham Bowland
Managing Director
29 April 2008





CORE Precision Limited

Overview

The CORE Precision business model is based upon generating ideas, concepts, and
intellectual property internally and outsourcing the detailed development and
manufacturing to our strategic partners.  The aim of this model is to deliver
rapid growth using a small, but highly skilled internal resource.

Following its inception in July 2007, CORE Precision's turnover was £185,000.
This comprised sales of design services, prototypes and products, and royalties
and resulted in a loss before taxation for the six-month period of £7,000.


Business Activities

CORE Precision is active in four business areas: the design and manufacture of
medical devices for our OEM partners; licensing; leading edge research and
development and industrial inspection systems.
          
     •    Design and manufacture of medical devices for our OEM partners
          During 2007 we successfully undertook design, development and 
          manufacturing projects for major companies such as Gyrus and Olympus.  
          This is an area in which we excel and we are looking forward to 
          further growth during 2008.

     •    Licensing

          CORE Precision has been engaging with a number of external parties 
          with a view to evaluating the licensing of their intellectual 
          property.  These opportunities are at varying stages of development, 
          from the patent stage to a fully developed device.  CORE Precision has 
          successfully licensed two devices since its inception: a laparoscopic 
          retraction system and a tissue retrieval system.  Both systems 
          represent excellent growth opportunities, with the latter providing a
          platform to allow us to target the lucrative US tissue retrieval 
          market - a market valued in excess of US$60 million.

     •    Leading edge research and development

          The field of laparoscopic surgery is changing rapidly.  The advent of 
          Natural Orifice Translumenal Endoscopic Surgery (NOTES) and Single 
          Incision Laparoscopic Surgery (SILS) has resulted in the introduction 
          of a dedicated product development team to deliver innovative 
          solutions to this exciting and quickly evolving market.

     •    Industrial Inspection Systems

          Our industrial business remains an important part of our portfolio.  
          2007 was another successful year and we completed projects for 
          Rolls-Royce and GE Inspection Technologies.  We have continued to 
          develop our capabilities in this sector and are confident that 2008 
          will produce positive results.

Outlook

In 2008 we are looking forward to growth in all our business areas.  We are
confident our business model will deliver new products rapidly and in a cost
effective manner.  We have had some early success with our licensing initiative
and look forward to building upon this positive experience in 2008.  The
delivery of leading laparoscopic solutions in the face of a changing market will
be one of our greatest challenges.  Nonetheless, we are in no doubt that we can
create innovative products to address these demanding requirements.  In our
industrial sector we will focus on our strategic partners where we can leverage
the greatest value.

Haemocell Limited

Financial Performance

Haemocell Limited's sales for 2007 were £260,000.  Margins remained strong and
the company delivered a profit before taxation of £79,000.

Sales

The majority of sales are made direct to UK hospitals.  It is our intention to
grow this business using a nationwide network of agents and distributors and the
new branding is an important part of this sales drive.

Internationally, sales have not yet grown to the levels we hoped for, however
the drive to reduce manufacturing costs through strategic outsourcing is
allowing us to address new opportunities for growth.

Manufacturing

Haemocell Limited has forged links with a number of low cost manufacturers and
we are leveraging these relationships to deliver high quality products at low
cost.  We continue to seek products and partners in countries such as China and
are optimistic that we will be able to augment our product range, thereby
allowing us to engage in markets around the world.

Research and Development

Haemocell Limited remains fully committed to developing new and unique
autologous blood transfusion (ABT) solutions.  We are under no illusions in
terms of the effort required to develop truly innovative products in this
sector, but we are confident that, longer term, Haemocell Limited will deliver
exciting ABT systems and devices.

Outlook

This coming year we are looking forward to growth in national and international
sales with the introduction of high performance, low cost products designed to
deliver value to our customers.  Longer term, we anticipate new unique ABT
solutions but are cognisant of the long development cycles for such systems.



Stuart Moran
Managing Director (CORE Precision Limited 
and Haemocell Limited)
29 April 2008





CONSOLIDATED INCOME STATEMENT
As at 31 December 2007
                                                         2007            2006
                                                        £'000           £'000
Revenue                                                 4,770           4,460
Cost of sales                                         (2,377)         (2,593)
Gross profit                                            2,393           1,867
Other operating expenses                              (1,708)         (1,132)
Operating profit                                          685             735
Finance costs                                            (50)            (39)
Finance income                                             96               -
Profit before tax                                         731             696
Taxation                                                   34               -
Profit for the period                                     765             696

Earnings per share, total and continuing
Basic                                                   0.24p           0.27p
Diluted                                                 0.23p           0.27p



CONSOLIDATED BALANCE SHEET
As at 31 December 2007
                                                                             2007          2006
                                                                            £'000         £'000
ASSETS
Non-current assets
Property, plant and equipment                                                 804           784
Intangible assets                                                             587           190
Deferred tax asset                                                            134            88
                                                                            1,525         1,062
Current assets
Inventories                                                                 1,816         1,215
Trade receivables                                                           2,428         1,417
Other current assets                                                          218           224
Cash and cash equivalents                                                   3,386             4
                                                                            7,848         2,860
Total assets                                                                9,373         3,922

EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent company
Share capital                                                               3,738         2,595
Share premium account                                                      18,809        16,106
Capital reserve                                                               329           329
Retained earnings                                                        (15,466)      (16,231)
                                                                            7,410         2,799
Non-current liabilities
Bank loans                                                                      7            28
Obligations under finance leases                                               40            73
                                                                               47           101
Current liabilities
Bank overdraft and loans                                                      670            80
Trade and other payables                                                      992           558
Obligations under finance leases                                              127           164
Current tax liabilities                                                        12             -
Accruals                                                                      115           220
                                                                            1,916         1,022
Total liabilities                                                           1,963         1,123
Total equity and liabilities                                                9,373         3,922



CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2007
                                                                       Year ended               Year ended
                                                                 31 December 2007         31 December 2006
                                                                            £'000                    £'000
Cash flows from operating activities
Operating profit                                                              685                      735
Adjustments for:
Depreciation of property, plant and equipment                                 204                      229
Amortisation of Intangible assets                                              10                        -
Operating cash flows before movement in working                               899                      964
capital
Increase in inventories                                                     (601)                    (363)
Increase in receivables                                                   (1,005)                    (127)
Increase in payables                                                          329                      187
Cash generated from operations                                              (378)                      661
Interest paid                                                                (50)                     (39)
Tax received                                                                    -                        3
Net cash (used in)/from operating activities                                (428)                      625
Cash flows from investing activities
Interest received                                                              96                        -
Acquisition of non-current assets                                           (526)                    (381)
Net cash used in investment activities                                      (430)                    (381)
Cash flows from financing activities
Net proceeds from share issue                                               3,846                        9
Proceeds from bank loans                                                        -                       66
Repayment of bank loans                                                      (23)                     (23)
Repayment of obligations under finance leases                               (175)                    (152)
Net cash from financing activities                                          3,648                    (100)
Net increase in cash and cash equivalents                                   2,790                      144
Cash and equivalents at beginning of period                                  (50)                    (194)
Cash and cash equivalents at end of period                                  2,740                     (50)

Cash at bank and in hand                                                    3,386                        4
Bank overdraft                                                              (646)                     (54)
                                                                            2,740                     (50)



STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2007
                                                    Share        Share      Capital         Retained
                                                  capital      premium      reserve         earnings       Total
                                                    £'000        £'000        £'000            £'000       £'000
Balance as at 1 January 2006                        2,591       16,101          329         (16,927)       2,094
Changes in equity for the year to
31 December 2006:
Profit for the year                                     -            -            -              696         696
Total recognised income and expense                     -            -            -              696         696
for the year
Issue of share capital                                  4            5            -                -           9
Movement in year                                        4            5            -              696         705
Balance as at 31 December 2006                      2,595       16,106          329         (16,231)       2,799
Changes in equity for the year to
31 December 2007:
Profit for the year                                     -            -            -              765         765
Total recognised income and expense                     -            -            -              765         765
for the period
Issue of share capital                              1,143        2,857            -                -       4,000
Issue costs                                             -        (154)            -                -       (154)
Movement in year                                    1,143        2,703            -              765       4,611
Balance as at 31 December 2007                      3,738       18,809          329         (15,466)       7,410


     
1.   Basis of preparation

The preliminary announcement has been prepared under the historic cost
convention and in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union.

2.   Publication of non-statutory financial statements

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies
Act1985.

The consolidated income statement, the consolidated balance sheet at 31 December
2007, the consolidated cash flow statement and the statement of changes in
equity have been extracted from the Group's financial statements upon which the
auditors opinion is unqualified and does not include any statement under section
237 of the Companies Act 1985. Those financial statements have not yet been
delivered to the Registrar.

Copies of the financial statements will be posted to shareholders shortly.
Additional copies of the financial statements and of this announcement will be
available at the Company's registered office at Clayton Wood House, 6 Clayton
Wood Bank Rise, Leeds, LS16 6QZ.

3.   Earnings per ordinary share

The earnings per ordinary share has been calculated by dividing the profit
attributable to ordinary shareholders for the year ended 31 December 2007 of
£765,000 (2006: £696,000) by the weighted average number of ordinary shares in
issue during the year of 323,117,832 (2006: 259,300,058) and amounted to 0.24p
per share (2006: 0.27p per share).

The Group has one category of dilutive potential ordinary shares, those share
options granted where the exercise price is less than the average price of the
Company's ordinary shares during the year. The diluted earnings per share
amounted to 0.23p per share (2006: 0.27p per share).




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