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September 21, 2004

Gyrus on Track to Hit Targets

From: The Scotsman, UK - Sep 21, 2004

By David Winning, City Staff, PA News

Medical equipment maker Gyrus today overcame currency swings and delays in the roll-out of its revolutionary hearing aid to post a 23% rise in profits.

Gyrus, which specialises in high-tech equipment used in keyhole surgery, said half-year profits of £3.7 million were achieved in spite of a 12% fall in the value of the US dollar.

This performance kept the Cardiff-based group on track to achieve its twin targets of revenues growth and profitability in the high teens in the medium term.

Investment in new products totalled £3.9 million in the first six months of the year and Gyrus said it was preparing a string of launches for the coming winter and spring.

These include a new workstation that can assist surgeons when performing operations such as taking patients' tonsils out.

But there was disappointing news for investors on its RetroX hearing aid, which requires patients to have a tube implanted through their skin into the ear canal.

Patients had initially welcomed the product as it is invisible to the naked eye and offers better sound quality, while Gyrus said the clinical results were also excellent.

However, the group said the full roll-out of RetroX had stalled because sales teams were inexperienced in targeting the specific market for hearing aids.

Group turnover improved 26% at constant exchange rates to £42.5 million during the six months – boosted by higher sales to the US gynaecology and urology markets.

Executive chairman Brian Steer said: "To have achieved such strong revenue and profit growth despite the weakness of the dollar is a major achievement and evidence of the strength of our business model."

Gyrus, which employs 180 staff at a research site in Cardiff, generates 85% of its business across the Atlantic.

It supplies a portfolio of products to surgeons, enabling them to carry out faster and less traumatic operations.

Hospitals benefit from lower costs as more patients are seen each day and fewer are required to stay overnight.

Many of the products made by Gyrus treat conditions suffered by elderly patients and the ageing population of western nations has fuelled optimism of long-term growth.

Analysts believe the market for medical technology across the Atlantic is worth 209 billion US dollars (£116.5 billion) – greater than the market for medicines. s