Aortech Inter PLC - Final Results

RNS No 7341w
AORTECH INTERNATIONAL PLC
1st July 1997
                            
                            
                     ANNOUNCEMENT OF
                            
                   PRELIMINARY RESULTS
                            
            FOR THE YEAR ENDED 31 MARCH 1997
                            

AorTech    International   plc,   the   Scottish    based
manufacturer  of  mechanical heart valves  and  ancillary
products  announces its Preliminary Results for the  year
ended 31 March 1997.

Key Points

*     Turnover  increased  by 24%  to  #2,172,833  (1996:
       #1,749,109)

*      Financial   results   in  line   with   Prospectus
       illustrative projections

*     Good progress reported on development projects

*     Professor  David  Williams  recently  appointed  as
      Director and Head of Development Programme


Gordon Wright, Chairman, commented:

"Turnover is up 24% on 1996 and this is an indication  of
the  continuing  acceptance  of  our  core  product,  the
Ultracor heart valve.

"I  am  delighted  that we achieved the  targets  in  the
illustrative  financial  projections  contained  in   our
Prospectus for the recent placing and admission to AIM.

"The   financial   position  of  the   group   has   been
considerably strengthened by the successful flotation and
with existing products increasing market penetration  and
the  exciting  Polymer  and Medlink projects  progressing
well  I  am confident that the group has excellent growth
prospects."


For further information contact:

Eddie McDaid, Managing Director, AorTech International plc  
Tel. No. 01698 746 699
Clive Thomson / Elizabeth Kennedy, Bell Lawrie White & Co.  
Tel. No. 0141 221 7733
Michael  Padley  / Isabel Petre, Buchanan  Communications
Tel. No. 0171 489 1441


On  behalf  of the board of directors it gives  me  great
pleasure  to present the first annual report and accounts
for AorTech International plc.

The  company  was admitted to the Alternative  Investment
Market  in February 1997 and everyone involved  with  the
business has recognised that this was a landmark event in
its  development.  We were all delighted at the  interest
and  commitment shown by the new investors.  The  company
raised #4,500,000 from the placing of the new shares at a
cost of #341,157 for professional and related fees.


RESULTS

You  will recall that in the Prospectus prepared for  the
placing  and  subsequent admission  to  AIM  we  included
illustrative financial projections for the year ended  31
March, 1997.  I am pleased that I can now report that the
group  turnover  target of #2,173,000 has been  achieved,
whilst  our  net loss incurred was approximately  #30,000
less than the forecast.

Turnover   for  the  year  has  increased  by  24%   from
#1,749,109  in 1996 to #2,172,833.  This is an indication
of  the  continuing acceptance of our core  product,  the
Ultracor mechanical heart valve.

The  net  loss  of  #1,133,012 for the year  includes  an
exceptional   charge   of  #750,000   relating   to   the
consideration  for  termination  of  the  United  Kingdom
distribution  agreement with Caledonian Medical  Limited.
The  first  instalment of #375,000 was paid  in  February
1997  with the balance being dependent on unit  sales  in
the United Kingdom in the subsequent twelve months, up to
a  maximum  of #375,000 payable.  The board is  confident
that  selling direct in the UK will considerably  enhance
the  groups  turnover and profitability as well  as  our
corporate profile.


FINANCIAL POSITION

Development  expenditure of #64,134 was  incurred  during
the  year on both the Polymer Project and the new Medlink
Project which commenced in February 1997.  These projects
are discussed below.

Following  the  placing of new shares the bank  overdraft
and  directors  loans  were repaid  and  the  preference
shares  in  issue were redeemed.  The stock  of  Ultracor
heart  valves  held  by Caledonian  Medical  Limited  was
bought   back  in  accordance  with  the  terms  of   the
termination  of  the  UK  distribution  agreement.    The
balance of the funds not required for short term use  has
been placed on deposit.

In overall terms, the financial position of the group has
been  considerably strengthened following the placing  of
the new shares.


OUTLOOK

Ultracor Heart Valve

I  am pleased to report the continuing acceptance of  our
Ultracor mechanical heart valve into an increasing number
of  hospitals in various countries throughout the  world.
Clinical data is continuing to be collected from  centres
in   the  United  Kingdom,  Germany  and  Turkey.   These
results   should  be  published  in  appropriate  medical
journals  during  the current financial  year  and  I  am
confident  that  this data will continue to  support  our
assertions  of the superior performance of  the  Ultracor
valve  in  the areas of haemodynamics, regurgitation  and
quality of life.

Annuloplasty Ring

Annuloplasty  rings  are  used  by  surgeons  where   the
prognosis is to repair the existing damaged valve  rather
than  replace it with a mechanical or tissue valve.  This
annuloplasty ring is complementary to the companys  core
product, the Ultracor mechanical heart valve.

The data which has been collected from the clinical trial
of  the  annuloplasty ring is currently  being  collated,
with  the next stage being an application for a  CE  Mark
for   this   new  product.    AorTech  has  an  exclusive
worldwide  licence  agreement for  this  product  and  we
anticipate the CE mark to be obtained during the  current
financial    year    which   will   enable    its    full
commercialisation.

Development Projects

The  Polymer  Project is being carried out in conjunction
with the Bristol Heart Institute. Its
objective  is to include hydrophilic polymer on  a  heart
valve, with a view to preventing or
reducing  the  need for anticoagulant treatment  for  the
prevention of thrombosis. Early results
from  the project are encouraging and in-vivo experiments
are currently being carried out.
The   length  of  this  project  is  anticipated  to   be
approximately a further two years before
clinical trials commence.

The Medlink Project commenced in February 1997 and is
being  carried out in conjunction with the University  of
Glasgow,  the University of Leeds, and the University  of
Liverpool  with  AorTechs  role  being  that   of    the
commercial  partner. The project has the backing  of  the
Department  of  Health and the Engineering  and  Physical
Sciences  Research Council. A Medlink Grant  of  #480,000
has  been awarded to the project which has an anticipated
three  year  development period prior to the commencement
of  clinical trials.  Its objective is the development of
a  new  generation  of  heart  valve  using  durable  and
flexible  synthetic material combining the structure  and
longevity   of   a   mechanical  valve   with   the   low
thrombogenisity  of  a  tissue valve.   If  this  can  be
achieved it would have considerable clinical impact.


BOARD APPOINTMENTS

AorTech  is  now  actively involved in research  projects
involving polyurethane and polymer materials and  we  are
absolutely  delighted that Professor David Williams  from
the  University of Liverpool has accepted the appointment
as  Director and Head of Development Programme.  David is
a world renowned expert on biomaterials and will devote a
significant part of his time to the company.

We  recognise the importance of good corporate governance
and  we  have  appointed two non-executive directors  who
bring professional knowledge and expertise which enhances
our Board.  Francis Madden has been involved in providing
corporate  finance  advice to public companies  for  many
years  and  has particular experience with  fast  growing
technology  companies.  Alistair  Gray  founded  his  own
strategic management consulting business in 1992 and  has
over  15  years experience advising major multi-national
organisations on competitive strategy.


AORTECH TEAM

I  would like to take this opportunity to acknowledge the
achievements of the management and staff in reaching  the
present  milestone of being a public company on  the  AIM
market.

I  am  confident  that we have the right  people  and  an
appropriate structure in place to continue the  companys
growth in the future.


FUTURE PROSPECTS

I  am  delighted with the progress AorTech is making with
the  core  business continuing to grow in line  with  our
expectations.   The group will be seeking to  expand  its
product  portfolio through development projects  and  any
other opportunities which arise.

Our  objective  is  to  continue to deliver  the  highest
quality products to the medical profession.

On  behalf of the directors and employees I thank you for
your   support   and  we  look  forward  to   1998   with
considerable confidence.

   J G Wright
   Chairman


Consolidated profit and loss account
for the year ended 31 March 1997

                                         1997           1996
                                           #              #

Turnover                                2,172,833    1,749,109
Cost of  Sales                         (1,251,855)    (952,275)
                                         ________     ________

Gross profit                              920,978      796,834

Net operating expenses                 (1,212,174)  (1,048,293)
                                        ________        _______

Operating loss before exceptional item  (291,196)     (251,459)

Exceptional item                        (750,000)        -
                                        ________        _______

Loss on ordinary activities before 
 interest                             (1,041,196)     (251,459)

Interest receivable and similar income    11,914              -

Interest payable and similar charges    (103,730)       (110,729)
                                         ________         _______

Loss on ordinary activities before and 
after taxation      ( NOTE 1)          (1,133,012)       (362,188)
                                         ________         _______

Loss per ordinary share  ( NOTE 2 )        (8.1)p            (2.7)p


Consolidated Balance sheet at 31 March 1997

                                              1997               1996
                                                 #                  #
Fixed assets
Intangible assets                          447,722            402,819
Tangible assets                            603,014            639,584
                                         _________           ________
                                         1,050,736          1,042,403
                                         _________           ________

Current assets
Stocks                                    582,566             538,408
Debtors                                   713,545             419,562
Cash at bank                            2,316,629              62,792
                                         ________            ________
                                        3,612,740           1,020,762
Creditors: amounts falling due
within one year                          (869,785)          (657,828)
                                         ________            ________

Net current assets                      2,742,955             362,934
                                         ________            ________

Total assets less current
liabilities                             3,793,691           1,405,337

Creditors: amounts falling due
after more than one year                (624,813)           (727,905)
Accruals and deferred income             (50,000)                -
                                        ________            ________
Net assets                             3,118,878             677,432
                                        ________            ________



Capital and reserves
Called up share capital                4,300,000           3,206,884
Share premium account                  2,483,843                   -
Other reserve                         (2,003,143)        (2,003,143)
Profit and loss account               (1,661,822)          (526,309)
                                        ________            ________

Shareholders funds                     3,118,878             677,432
                                        ________            ________


Consolidated cash flow statement
for the year ended 31 March 1997

                                       1997               1996
                                         #                  #

Net Cash flow from 
operating activities               (863,534)            557,035

Returns on investment and 
servicing of finance               ( 91,816)           (110,729)

Capital expenditure and 
financial investment                 (21,116)         (106,915)
                                     ________          ________

Cash (outflow)/inflow before management of
liquid resources and financing      (976,466)          339,391

Management of liquid resources    (2,000,000)                -

Financing                          3,485,521           503,777
                                    ________          ________

Increase in cash in the year         509,055           843,168
                                    ________          ________


NOTE 1

No dividends have been paid or proposed for the year.


NOTE 2

The loss per ordinary share on the net distribution basis is calculated on the
loss of the group of #1,133,012 (1996: #362,188) and on 13,935,340 (1996:
13,600,000) equity shares, being the weighted average number of shares deemed to
be in issue.

The weighted average number of shares has been calculated for 1997 and 1996
based on the following assumptions:

     (1)  the 7,000,000 Ordinary shares and 3,500,000
           "A" Ordinary shares, being the
           equity shares issued by the company following
           the group reconstruction on
           10 February 1997, have been treated as being
           in issue for the whole of 1997
           and 1996.

     (2)  the bonus issue of 3,100,000 Ordinary shares on
           11 February 1997 has been
           treated as if these shares were in issue for
           the whole of 1997 and 1996, for
           comparative purposes.

     (3)  the 3,600,000 Ordinary shares issued for cash
           on 26 February 1997 have been
           treated as being in issue from that date only.

No material dilution of loss per ordinary share would
arise if all share options were exercised.


NOTE 3

The financial information set out in this Announcement
has been abridged from the Annual Report for
the year ended 31 March 1996 and unaudited accounts for
the year ended 31 March 1997.

Copies of this report will be sent to shareholders on 4th
July 1997 and are available from the Companys head
office at Strathclyde Business Park, Bellshill, Scotland
ML4 3NJ.


END