Interim Results

Hygea VCT plc

18 July 2007

Interim Results

Unaudited interim results for the six months to 30 June 2007

Company number 04221489

Financial summary

For the six months ended 30 June 2007


                               30 June    30 June
                               2007       2006       31 December 2006

Net assets                     £4,535,000 £5,058,000 £4,294,000

Net profit/(loss) before tax   £241,000   £(581,000) £(1,345,000)

Net asset value per share      60.2p      67.2p      56.8p

Revenue loss per share*        (1.16)p    (1.25)p    (2.2)p

Total return/(loss) per
share*                         3.20p      (7.69)p    (17.8)p



* based on the weighted average of 7,530,191 (June 2006: 7,566,573
and December 2006: 7,555,017) shares in issue in the period.

Chairman's statement

EGM
As I mentioned in my statement in the 2006 Report and Accounts, the
Board has been conducting a further review of its cost base with a
view to recommending additional cost-cutting measures.  The objective
of the review, which was carried out in conjunction with Octopus
Investments, was to identify changes which could be implemented
without either hampering the integrity of the Fund or the quality of
the monitoring and mentoring advice given to investee companies which
comprise the Fund's portfolio.

We have now concluded this review and we have called an EGM to be
held on 30 July 2007 for the purposes of voting on the proposals
which were set out in the circular to shareholders dated 9 July
2007.  The proposals include the appointment of the Board as the
Fund's investment manager in place of Octopus Investments and the
continued role of Octopus Investments in providing accounting and
administrative services and the execution of dealing orders on the
Fund's AIM holdings.  In addition, as part of the plan for containing
cash costs whilst maintaining resource, it is proposed that a
different sort of performance incentive fee is awarded to members of
the Commercial Advisory Committee.

Investment Policy
The Fund ended the period under review with a portfolio of
investments in a total of 17 companies, 7 of which were quoted on AIM
and 10 were unquoted.  As at 30 June 2007, the portfolio was 21%
invested in AIM-quoted companies, 75% in unquoted companies, and 4%
in money market securities and cash.  Going forwards, the Board
intends to focus the Fund's resources on those unquoted holdings
which, in the Board's opinion, have a realistic opportunity of
outperforming the other investments in the portfolio.

NAV
The net asset value per share ("NAV") at 30 June 2007 was 60.2p, an
increase of 6% compared with the NAV at 31 December 2006.  The
increase in the NAV was driven by an improvement in the share price
of certain of the AIM-quoted holdings, and an uplift of £244,000 in
the value of ImmunoBiology Ltd, one of the Fund's unquoted holdings.

Despite this, many of our other unquoted holdings are still held at
cost as we have not yet been able to write these valuations up under
the International Private Equity and Venture Capital (IPEVC)
guidelines.  We expect, however, that we will be able to show further
progress in the valuation of the Fund's portfolio of investments in
the future.

The Board has continued to focus on the cost base of the Fund.  The
total expenses in the first half of 2007 totalled £113,000 (2006:
£134,000) including the estimated costs of the production of the
circular amounting to £25,000.  As stated in the circular, the Board
expects the annual running costs to be less than 3% of the Fund's NAV
as at 31 December 2006 if shareholders approve the resolutions
relating to the Board's proposals at the EGM.

Portfolio Review
During the period, we sold the Fund's remaining holding in ReNeuron
Group plc following its strong share price performance.  We have also
disposed of the Fund's entire holding in Dawmed Systems plc, Cobra
Bio-manufacturing plc, Evolutec Group plc, and Plethora Solutions
Holdings plc.  In April, Hygea invested approximately £60,000 in
Epistem Holdings plc, an AIM quoted biotechnology company that is
commercialising adult stem cells in the areas of oncology and
gastrointestinal diseases.  A key reason for the decision to invest
was that Epistem comprises three related activities, namely a
pre-clinical contract research division that provides services to the
pharmaceutical and biotechnology industry, a biomarker division, and
a division that is developing novel therapies.  To date, the Epistem
share price has increased by approximately 35% compared with the
Fund's purchase price.

Within the unquoted portfolio, we invested a further £100,000 in
Prosurgics Ltd, as part of a larger funding round, and also made a
small further investment into Hallmarq Veterinary Imaging Ltd.  Hygea
also invested £78,000 in a follow-on fundraising for Insense Ltd, the
wound healing company into which it first invested in July 2003.

Shares
As a venture capital trust, the Fund is listed on the Main Market of
the London Stock Exchange.  However, there is only a very limited
secondary market in shares in venture capital trusts and consequently
it can be difficult to sell shares in the market at a price that is
close to the Fund's underlying net asset value.  For the time being,
the Board has adopted a policy of not buying back shares from selling
shareholders because the Board does not consider this to be the best
use of the Fund's limited financial resources on behalf of all
shareholders.  However, the Board is pursuing other solutions to
address the needs of shareholders wishing to sell and will provide
shareholders with more information in due course.

VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board with advice on the
ongoing compliance with HM Revenue & Customs rules and regulations
concerning VCTs.  The Board has been advised that Hygea VCT is in
compliance with the conditions laid down by HM Revenue & Customs for
maintaining approval as a VCT.

Outlook
I believe that the outlook is promising for many of our core
holdings, and I will provide you with further news on the progress of
the investee companies in due course.  In the meantime, I would draw
your attention to www.hygeavct.com which I hope makes it easier for
you to obtain a deeper understanding of the Fund's portfolio via the
links to each investee company's website.

James Otter
Chairman
18 July 2007

The unaudited interim financial statements for the period from 1
January 2007 to 30 June 2007 are set out below.

Income Statement


                                     Six months ended 30 June 2007
                                     Revenue       Capital      Total
                                     £'000         £'000        £'000

Realised loss on investments         -             (364)        (364)

Unrealised gain on investments       -             716          716

Income                               2             -            2

Investment management fees           (8)           (23)         (31)
Other expenses                       (82)          -            (82)

Profit/(loss) on ordinary activities
before tax                           (88)          329          241

Tax                                  -             -            -

Profit/(loss) on ordinary activities
after tax                            (88)          329          241
Profit/(loss) per share              (1.16)p       4.36p        3.20p





  * The total column of this statement is the profit and loss account
    of the company.
  * All revenue and capital items in the above statement derive from
    continuing operations
  * The accompanying notes are an integral part of the financial
    statements.

Reconciliation of movements in shareholders' funds


                                             Six months ended 30 June
                                             2007
                                             £000
Shareholders' funds at start of year         4,294
Profit on ordinary activities after tax      241
Shareholders' funds at end of period         4,535



Income Statement (cont.)

                     Six months ended 30 June Year ended 31 December
                     2006                     2006
                     Revenue  Capital  Total  Revenue Capital Total
                     £'000    £'000    £'000  £'000   £'000   £'000

Realised gain on                              -       82      82
investments          -        -        -

Unrealised loss on                            -       (1,199) (1,199)
investments          -        (456)    (456)

Income               9        -        9      21      -       21

Investment                                    (21)    (61)    (82)
management fees      (10)     (31)     (41)
Other expenses       (93)     -        (93)   (167)   -       (167)

Loss on ordinary
activities before                             (167)   (1,178) (1,345)
tax                  (94)     (487)    (581)

Tax                  -        -        -      -       -       -

Loss on ordinary                              (167)   (1,178) (1,345)
activities after tax (94)     (487)    (581)
Loss per share       (1.25)p  (6.44)p  (7.69) (2.2)p  (15.6)p (17.8)p




                                    Six months ended 30 Year ended 31
                                    June 2006           December 2006
                                    £000                £000
Shareholders' funds at start of     5,679               5,679
year
Loss on ordinary activities after   (581)               (1,345)
tax
Cost of share buyback               (40)                (40)
Shareholders' funds at end of       5,058               4,294
period





Balance sheet as at 30 June 2007




                                30 June 2007 30 June 2006 31 December
                                                          2006
                                £'000        £'000        £'000

Fixed asset investments         4,375        4,800        4,156
Current assets:
Debtors                         11           9            77
Cash at Bank                    198          294          94
                                209          303          171
Creditors: amounts falling due  (49)         (45)         (33)
within one year
Net current assets              160          258          138
Net assets                      4,535        5,058        4,294

Capital and Reserves
Share capital                   3,765        3,765        3,765
Share premium                   1,722        1,722        1,722
Special distributable reserve   1,660        1,660        1,660
Capital redemption reserve      38           38           38
Capital reserve - realised      (901)        (565)        (513)
- unrealised                    (1,163)      (1,136)      (1,879)
Revenue reserve                 (586)        (426)        (499)
Total equity shareholders'      4,535        5,058        4,294
funds
Net asset value per share       60.2p        67.2p        56.8p




Cash flow statement       6 Months to  6 Months to   12 Months to
                          30 June 2007 30 June 2006  31 December 2006
                          £'000  £'000 £'000 £'000   £'000    £'000

Net cash (outflow)/inflow
from operating activities        (30)        (207)            (390)

Financial investment :
Purchase of investments   (291)        (828)         (1,068)
Sale of investments       425          -             223
Net cash outflow from
financial investment             134         (828)            (845)

Net cash inflow from
management of liquid
resources                        -           -                -

Net cash outflow before
financing                        104         (1,035)          (1,235)

Financing:
Purchase of own shares           -     (40)          (40)

Total financing                  -           (40)             (40)

Increase/(decrease) in
cash resources                   104         (1,075)          (1,275)




Investment portfolio as at 30 June 2007
                                        Cost  Valuation
                                        £'000 £'000
Ten largest investments
Scancell Ltd                            725   725
Immunobiology Ltd                       300   544
Prosurgics Ltd                          350   385
NeutraHealth plc                        317   362
Wound Solutions Ltd                     350   350
Hallmarq Veterinary Imaging Ltd         785   338
DxS Limited                             326   326
Insense Ltd                             245   304
BioAnaLab Ltd                           279   279
York Pharma plc                         102   135
                                        3,779 3,748

Other AIM investments                   1,288 435
Other unquoted investments              471   192

                                        5,538 4,375



NOTES

1. Basis of preparation

The interim financial information has been prepared in accordance
with applicable accounting standards and under the historical cost
convention except for the revaluation of investments.  The principal
accounting policies of the Company have remained unchanged from those
set out in its 2006 annual report and financial statements.

2. Publication of non-statutory accounts

The unaudited interim results for the six months ended 30 June 2007
and the six months ended 30 June 2006 do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985
and have not been delivered to the Registrar of Companies.  The
comparative figures for the period ended 31 December 2006 have been
extracted from the audited financial statements for that year, which
have been delivered to the Registrar of Companies.  The independent
auditors' report on those financial statements under Section 235 of
the Companies Act 1985 was unqualified.

3. The calculation of the revenue and capital return per share is
based on the return on ordinary activities after tax for the period
and on 7,530,191 ordinary shares, being the weighted average number
of shares in issue during the period from 1 January 2007 to 30 June
2007. (June 2006: 7,566,573 and December 2006: 7,555,017).

4. The calculation of net asset value per share is based on the net
assets at 30 June 2007 of £4,535,000 (30 June 2006: £5,058,000 and 31
December 2006: £4,294,000) divided by 7,530,191, being the number of
shares in issue at those dates.

5. Copies of this statement are being sent to all shareholders.
Copies are available from the registered office of the Company at 8
Angel Court, London, EC2R 7HP.

ENDS

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