Interim Results

Surgical Innovations Group PLC
07 September 2006


Press Release                                                   7 September 2006

                         Surgical Innovations Group plc
                          ('Surgical' or 'the Group')

                                Interim Results


Surgical Innovations Group plc ('Surgical') ('AIM: SUN'), the designer and
manufacturer of innovative surgical devices, today reports its Interim Results
for the six months ended 30 June 2006.

Highlights

•  Turnover of £2.120m (2005: £1.432m)
•  Operating profit of £199,000 (2005: £117,000)
•  Pre-tax profit 102% higher at £182,000 (2005: £90,000)
•  Overall net debt reduced by £55,000 to £385,000
•  Earnings per share increased by 100% to 0.07p (2005: 0.035p)
•  Record order book
•  Increased USA market penetration of Minimally Invasive Surgery (MIS) products
•  Increased internal expenditure on MIS product development leading to planned 
   launch of new YelloPort System in November 2006
•  Significant investment in manufacturing to reflect growth in MIS business

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

'Yet again, in all areas, our financial performance continues to improve.  Our
Medical Instrumentation and Product Development divisions have both contributed
to an excellent first half performance.  With increased investment and strong
divisional platforms, the Group is poised for a substantial increase in
operating profit in the second half of the year and beyond.'


                                    - ends -


For further information:

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

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

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


Chairman's Statement

I am pleased to report that, for the six months to 30 June 2006, the Group made
an operating profit of £199,000 on turnover of £2.120 million.  Allowing for net
interest payable of £17,000, the retained profit for the period was 102% higher
at £182,000 (2005: £90,000).

Our financial performance continues to improve.  The growth in profitability
coupled with tight control over working capital has allowed us to invest
£276,000 in machinery and infrastructure necessary to cope with the increased
demand for our core Minimally Invasive Surgery (MIS) products.  Despite this
substantial investment, net debt has reduced by £55,000 in the six months to
June 2006 and we anticipate a further reduction in the second half, as cash
inflows from operating activities continue to improve.

The significant effort made to develop our international distribution network
has led to acceleration in our forward order book which has been at record
levels during the period.  This order book growth has resulted in a very
pleasing increase in sales of our MIS products by 86% to £1,847,000 compared
with £993,000 last year.

We are confident this trend is set to continue during the remainder of 2006.
Importantly the level of business derived from our distribution partners
continues to increase as we reap rewards from the successful positioning of
YelloPort as a 'resposable' product.  We are delighted that YelloPort in its
'resposable' format has also been accepted within the United States hospital
community, and plans are underway to capitalise on this further throughout 2006
and beyond.

Following the successful pursuit of an infringement of our EndoFlex patent, we
have further strengthened our relationship with Cardinal Health, to whom the
EndoFlex licence agreement is assigned.  We are now working closely with
Cardinal Health to enhance the international presence of the product range to
the benefit of both parties.

Our product development team continues to excel.  Internally, we are at an
advanced stage in the development of an enhanced version of our port access
system, YelloPort.  We believe the innovative features of this new device will
provide us with opportunities for increased market share in the US market.
Externally, we have been successful in securing a development contract with a
leading medical device company, thereby confirming the standing of our product
development team in the international medical device arena.

Our product development expertise is further recognised by our ongoing
relationship with Rolls-Royce in the aerospace field.  We intend to build on
this success as we continue to seek further opportunities in other relevant
industrial sectors.

We are excited about the possibilities for the remainder of the year.  In view
of our first half successes, and with the imminent launch of our new and
improved YelloPort system, the Group anticipates that next year will yield
sustained increases in our market share and resulting profitability.

Doug Liversidge CBE
Chairman
7 September 2006


 Consolidated Profit and Loss Account

                                                             Unaudited        Unaudited          Audited
                                                           6 months to      6 months to     12 months to
                                                               30.6.06          30.6.05         30.12.05

                                                                  £000             £000             £000

Turnover                                                         2,120            1,432            4,018

Cost of sales                                                  (1,202)            (716)          (2,295)

Gross profit                                                       918              716            1,723


Administrative expenses                                          (719)            (599)          (1,322)


Operating profit                                                   199              117              401

Net interest payable                                              (17)             (27)             (49)

Profit on ordinary activities before taxation                      182               90              352

Tax on profit on ordinary activities                                 0                0               50

Retained profit attributable to ordinary shareholders              182               90              402


Earnings per ordinary share                                      0.07p           0.035p            0.16p





Consolidated Balance Sheet

                                                                   Unaudited         Unaudited             Audited
                                                                       As at             As at               As at
                                                                     30.6.06           30.6.05            30.12.05

Fixed assets

Tangible assets                                                          791               724                 668

Current assets

Stock                                                                    908              1270                 852
Debtors                                                                1,710             1,152               1,605
Cash at bank                                                              8                -                    25

                                                                       2,626             2,422               2,482

Creditors:
amounts falling due within one year                                    (968)           (1,199)               (940)

Net current assets                                                     1,658             1,223               1,542

Total assets less current liabilities                                  2,449             1,947               2,210

Creditors:
amounts falling due after more                                         (173)             (164)               (116)
than one year

Net assets                                                             2,276             1,783               2,094


Capital and reserves

Called up share capital                                                2,591             2,591               2,591

Share premium account                                                 16,101            16,102              16,101

Capital reserve                                                          329               329                 329

Accumulated losses                                                  (16,745)          (17,239)            (16,927)


Shareholders' funds                                                    2,276             1,783               2,094





Consolidated Cash Flow Statement

                                                                     Unaudited       Unaudited          Audited
                                                                   6 months to     6 months to     12 months to
                                                                       30.6.06         30.6.05         30.12.05

Net cash inflow from operating activities                                  345             115              279

Returns on investments and servicing                                      (17)            (27)             (49)
of finance

Taxation                                                                     3               0                0

Capital Expenditure                                                      (122)            (38)             (64)

Net cash inflow before financing                                           209              50              166

Financing                                                                  (7)           (127)            (186)

Increase / (decrease) in cash in the period                                202            (77)             (20)

Reconciliation of net cash flow to movement in net debt

Increase / (decrease) in cash in the                                       202            (77)             (20)
period

Cash outflow from finance leases and loans                                  73              59              118

Cash outflow from loan note redemption                                       0              68               68

Change in net debt resulting from cash                                     275              50              166
flows

New finance leases                                                       (220)               0              (9)

Conversion of loan notes                                                     0               0                0

Issue of shares on conversion of loan                                        0              42               42
notes

Movement in net debt in the period                                          55              92              199

Net debt at the beginning of the year                                    (440)           (639)            (639)

Net debt at the end of the period                                        (385)           (547)            (440)


Reconciliation of operating profit to net cash inflow from operating
activities

Operating profit                                                           199             117              401
Depreciation                                                               152             125              216
(Increase) / decrease in stocks                                           (56)           (388)               29
(Increase) / decrease in debtors                                         (108)              63            (340)
Increase / (decrease) in creditors                                         158             198             (27)

Net cash inflow from operating activities                                  345             115              279




Notes:

1.   The consolidated financial information does not constitute full accounts 
     within the meaning of the Companies Act 1985 and has not been reported on 
     by the auditors or delivered to the Registrar of Companies. The figures for
     the year ended 31 December 2005 have been extracted from the full accounts 
     for that year, on which the auditors gave an unqualified report and which 
     have been filed with the Registrar of Companies.

2.   The directors have not declared an interim dividend.

3.   The calculation of earnings 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 2006 was 259,151,188, at 31 December 2005 was 259,151,188 
     and at 30 June 2005 was 259,151,188.




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