Orthopaedic devices manufacturer Corin group said trading for the six months to June showed only moderate growth compared with the final half last year.
It is blaming a shortfall in sales in the second quarter.
However, the Gloucester-shire company hopes that a new marketing and distribution agreement with Stryker Corporation for its Uniglide knee joint system will help boost US sales.
In a trading statement, Corin said first-quarter results were in line with expectations, but second-quarter sales fell short, leading the board to expect sales and pretax profits for the first half of 2006 to show only moderate growth compared to the second half of 2005.
Sales in the UK and the US were down compared to a year earlier, while those in Germany, Japan, South Africa and Australia were up, it said.
The Cirencester-based business also announced that it has exercised an option to buy 7.5 per cent of the Acrobot Company, which makes guidance devices used to assist orthopaedic surgeons in hip resurfacing operations.
Corin signed a joint development deal with Acrobot in 2004 which gave it exclusive, worldwide rights to use Acrobot's Minimally Invasive Navigation system.
Development objectives having been met, clinical evaluation has now begun, the company said.
Mr Paling added: "We believe that our extended collaboration with Acrobot will allow us to commercialise the technology to provide Corin with a significant competitive advantage for its Cormet device."
Corin will publish its results for the six months to June 30 at the end of September.