Update letter to Shareholders

Hygea VCT plc
14 January 2008


FOR IMMEDIATE RELEASE                                            14 January 2008

                    HYGEA VCT PLC ('Hygea' or the 'Company')

                         Update letter to Shareholders


Set out below is the text of a letter being sent today by James Otter, Chairman,
to Shareholders updating them on certain of the Hygea investments and which will
be available on the Company's website: www.hygeavct.com.

'The purpose of this letter is to update you about certain of the Hygea
investments following our year end on 31st December 2007.

Before doing so, I would mention that 18 Hygea shareholders contacted Andrew
Boyle of London Capital Finance following my letter about enabling shareholders
to become more familiar with underlying portfolio companies. Since then, there
has been a web based conference by Hallmarq Veterinary Imaging and a
presentation by Prosurgics to shareholders. A Hygea shareholder who attended the
latter said 'It helped me hugely to meet the company there is no way in which
the quality of the underlying company could have been conveyed via Hygea's
accounts.' If any more of you wish to learn more details about Hygea's investee
companies by participating in presentations, please email Andrew Boyle at
[e-mail], stating that you are a Hygea shareholder and providing your
phone number.

There has been significant operational progress in the portfolio during 2007,
with at least two of the companies planning to list on AIM during 2009. We are
encouraging such initiatives since listing may create the opportunity to
increase the carrying value of those investments in the accounts of Hygea sooner
than if they remain unlisted.

Events of particular note in the portfolio are:

a)        BBI (point of care diagnostics)

Hygea invested £74,000 in this AIM listed company in December 2005. On 12th
December 2007, a recommended bid was made for BBI, resulting in selling the
holding for £149,000. BBI is chaired by David Evans, who has a very good
operating track record within the UK medical diagnostics sector - he also chairs
two of Hygea's unquoted investees and two of its remaining AIM investees.

b)        BioAnaLab (diagnostics for personalised medicine)

In the year to 31st October 2007, BioAnaLab achieved sales of £1.84 million
(2006: £1.16 million) and pre-tax profit of £240,000 (2006: £98,000). A key task
has been developing an organisational structure which enables the business to be
scaled in line with the larger opportunities now presenting themselves.


c)         Hallmarq Veterinary Imaging (low cost MRI based diagnostics for vets,
with initial focus on horses)

An upgraded scanner was rolled out this year and has been very well received by
the market, including one of the leading equine vets in the UK, based in
Newmarket, which is a very important influencer in the UK and international
market. The upgrade combined with greater customer focus has enabled scan fee
revenue to be increased by c. 24 % in 2007.

Following a change of CEO at the end of 2006, Hallmarq has a much deeper
understanding of its market, leading to the existing business model of leasing
plus a modest share of scan fees being supplemented by a business model with a
lower initial risk to the vet but a greater downstream benefit to Hallmarq. This
should result in enlarging the market much more quickly and generate significant
recurring revenues.

Hallmarq is planning to list on AIM in 2009.


d)        DxS (diagnostics for personalised medicine)

DxS has recently won a $1.2 million order from a major US pharmaceutical
company. US companies prefer to place orders (particularly where they are
strategically important) with local companies - so placing such an order with a
small UK company is very encouraging endorsement of the DxS technology.

e) Prosurgics (develops robots to assist surgeons achieve better patient
outcomes at lower total cost)

Two key events during the year were i) the recruitment of a new CEO in July (he
came from running a 1,000 person EMEA division of Abbott Diabetes Care) and ii)
development of a much lower cost version of EndoAssist (the camera holding robot
for use in keyhole surgery) - with a consumable similar to the razor/razorblade
business model which will generate recurring revenues. Prosurgics is also
planning for an AIM listing in 2009.

With respect to the AIM investees we continued to implement a policy of reducing
the number of existing holdings at a profit where possible. However we did make
some small investments in diagnostic companies because of the recurring income
streams from consumables.

The changes to the cost base implemented during 2006 and 2007 are now being
reflected in a reduced run rate of costs. This is entirely appropriate as, with
the fund fully invested, we need to minimise overheads while the investees work
their way towards a liquidity event.

Our overall approach is to focus on businesses which help deliver better
outcomes for patients at lower total cost - we consider that these companies
will still be able to grow even in the challenging economic environment of
2008.'

                        Appointment of Financial Adviser

Hygea is also pleased to announce that it has appointed Beaumont Cornish Limited
as the Company's Financial Adviser.

Enquiries:

Charles Breese, Hygea VCT plc on 01280 703482 or [e-mail]

Roland Cornish, Beaumont Cornish Limited on 020 7628 3396



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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