Excluding sales to the US, Group sales were GBP19.3m (H1 2008: GBP15.1m), up 28% and 10% on a constant currency basis. Sales to the US were GBP0.8m (H1 2008: GBP7.8m), reflecting the substantial stocking order by Stryker in H1 2008 which was not repeated.

Operating profit (before exceptional items of GBP0.6m (H1 2008: GBP1.9m)) was GBP0.8m (H1 2008: GBP3.9m), also reflecting the significantly lower sales to the US.

Exceptional items totaled GBP0.6m (H1 2008: GBP1.9m), of which GBP0.2m is non-cash, and relate to the departure of the former Finance Director in February 2009. After these exceptional charges, the reported profit before tax was GBP0.1m (H1 2008: GBP1.8m).

The reported loss per share was 0.16 pence (H1 2008: earnings of 2.13 pence), reflecting the above results. Earnings per share before exceptional items were 0.96 pence (H1 2008: 5.76 pence) (see note 5).

The Board is maintaining the interim dividend of 0.48 pence per share. The Group generated cash from operations of GBP2.0m (H1 2008: GBP8.7m) prior to capital expenditure of GBP1.7m (H1 2008: GBP3.0m). Net borrowings at 30 June 2009 were GBP5.9m (30 June 2008: GBP2.1m), representing an increase of GBP0.4m since 31 December 2008.

Operating Review

The international orthopaedic market remained relatively resilient, but growth slowed further during the first half of 2009 to approximately 3%, compared to 7% in 2008. Within this, the market in Europe was flat with small volume gains offset by continued pressure on price.


Sales of Corin’s hip products fell by 35% to GBP9.7m, a decline of 45% on a constant currency basis. However, excluding sales to the US, which included a significant stocking order to Stryker in early 2008, sales of hip products increased by 26%, an increase of 8% on a constant currency basis.

The sales growth was driven by the expanding hip portfolio which has benefitted from the early phases of Corin’s product development strategy. The Metafix cementless hip stem was launched in 2008 and the MiniHip hip stem launched in Germany in the first quarter of 2009 and the rest of Europe in the second quarter. The distributed hip stems launched in the UK and Australia in 2008 also continued to contribute to growth.

This growth was achieved despite lower sales in the Group’s Cormet and Optimom metal-on-metal hip systems. This reflects a decline in the European resurfacing market, as some surgeons narrowed the patient indication range for metal-on-metal implants. Deliveries of Cormet to Stryker in the US recommenced in the first half of the year at much lower levels, as Stryker’s stocks of the more common sizes were depleted.

Geographic Results

In Europe, sales increased by 8% to GBP10.5m, a decrease of 3% on a constant currency basis.

The UK experienced difficult trading conditions, with a decline in the overall reconstruction market compounded by the decline in the resurfacing market affecting the Group’s leading metal-on-metal product, Cormet. Overall, sales were GBP4.6m (H1 2008: GBP4.7m). Good progress continued with LARS, Metafix and the distributed revision hip system and the MiniHip hip stem was launched in May, although the Group does not expect to see notable results from this product until next year.

Sales in Corin’s other key European market, Germany, grew 15% to GBP3.0m (H12008: GBP2.6m) but were unchanged on a constant currency basis, reversing the sales declines of the recent past. The strong performance of the recently launched MiniHip stem and Zenith ankle offset declines in the more mature part of the German product portfolio.

Sales in the US were GBP0.8m (H1 2008: GBP7.8m). This sharp decline is a result of the large Cormet stocking orders delivered to Stryker in the first half of 2008. There was a small growth in other products in the US, where Corin is continuing with the Uniglide IDE study.

In the Rest of the World, sales grew by 63% to GBP8.8m (H1 2008: GBP5.4m), a growth of 33% on a constant currency basis. Australia, Japan and China all continued their very strong performances from 2008. Australian sales increased by 62% to GBP3.2m (H1 2008: GBP2.0m), an increase of 58% on a constant currency basis. This growth was led by LARS and solid growth in the knee and hip portfolio which benefitted from the distributed Score knee and an expansion of the sales and marketing team in this country over the last 12 months.

In Japan, sales increased by 84% to GBP3.1m (H1 2008: GBP1.7m), an increase of 27% on a constant currency basis. Sales of the Group’s metal-on-metal and bipolar hip systems continued to support this growth. Growth in China, from a small base, was driven by the continued rollout of Corin’s hip and knee systems.