GYG Gyg Plc

RNS Number:4999C
Gyrus Group PLC
15 December 1999



GYRUS GROUP PLC
Annual General Meeting
Today - 15th December 1999 at 10.30am
at the Company's HQ, Fortran Road, St Mellons, Cardiff CF3 0LT

GROUP CHAIRMAN BRIAN STEER WILL PRESENT THE FOLLOWING TRADING AND DEVELOPMENT
UPDATE

Following the announcement in September of the investment of $6 million by the
Ethicon Division of Johnson & Johnson, the development of the business between
our two companies remains a key strategic priority. 

Accordingly, the VAPR system developments designed to accelerate Johnson &
Johnson's penetration of the arthroscopy market are well advanced.  The first
products developed under this initiative will be launched in Q1 2000 and a
similar but smaller scale initiative is now in place for the VersaPoint
hysteroscopic system.  Johnson & Johnson are achieving forecast sales at the
user level and have successfully launched our new 2.3mm electrode for treating
knee cartilage.  However, a corporate-wide inventory-restructuring programme
by Johnson & Johnson has resulted in a one-off reduction in our order book on
our more established lines.  The effect has been increased because Gyrus has
been approved by Johnson & Johnson as a "direct to stock supplier" for US and
European markets resulting in a lower inventory requirement.

Consequently, trading for the six month period ending 31 December 1999 is
somewhat below our expectations due to this inventory restructuring resulting
in a one time adjustment to our forecasts.  This adjustment has not changed
our expectation of posting maiden profits for the full year.

Our European direct sales operation continues to grow with the Endourology
System achieving ever-wider acceptance.  Distributor arrangements are in place
in all of the major European countries and we are experiencing modest but
growing sales month on month.

Access to the US market, for products not marketed by Ethicon, either through
distributor agreements or on a direct basis, remains critical to our strategy.
 Our goal is to develop and grow our business on a broad base to mitigate the
risk associated with the dominance of a single marketing partner.  To this
end, we are currently at an advanced stage of discussion with a major US
healthcare corporation regarding the marketing of the Gyrus Endourology
System.  We are also actively reviewing other strategic approaches to address
the US market for our second technology platform now in pre-clinical trials.

We expect in the coming months to see continued sales growth to the end-user
accelerated by both expanded distribution and the introduction of new
products.  This will be augmented by a larger proportion of our revenue being
derived from our R&D and licensing activities with both new and established
customers.

ENQUIRIES

GYRUS GROUP PLC                            Tel: (01222) 300100
Dr Mark Goble, Managing Director           Fax: (01222) 300118
John Bradshaw, Finance Director            E-Mail: john.bradshaw@gyrus.co.uk
(Analyst, Broker, Shareholder Enquiries)


JEAN GARON PR                               Tel: (01628) 483040
Jean Garon                                  Fax: (01628) 486796
(Press Enquiries)                           E-Mail: jean@garonpr.demon.co.uk

END
CAGNFLALFANNFFN

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