Final Results

New City High Yield Fund Limited 20 March 2008 To: RNS Date: 20 March 2008 From: New City High Yield Fund Limited Unaudited results for the period from 17 January 2007 (date of incorporation) to 31 December 2007 • Net asset value total return of 1.9 per cent since launch on 7 March 2007. • Ordinary share price total return of 1.4 per cent since launch on 7 March 2007. • Ordinary share price at a premium of 0.6 per cent to published net asset value at 31 December 2007. • £15 million raised in March 2007 through a placing and offer for subscription, in addition to the rollover of New City High Yield Trust plc shareholders' interests of £52.9m into the Company. • £1.8 million and £4.7 million raised in December 2007 and February 2008 respectively, through placings with both existing and new investors. Jimmy West, the Chairman said: 'I am pleased to present the Company's second Interim Report. This is for the period from incorporation on 17 January 2007 to 31 December 2007 and will be followed by the first Annual Report to 30 June 2008. Launch of the Company and Fundraisings The Company was launched on 7 March 2007 following the voluntary winding up of New City High Yield Trust plc and the rollover of its shareholders' interests (£52.9m) into the Company. A further £15m was raised from new and existing shareholders pursuant to a placing. The objective of New City High Yield Fund Limited is to provide investors with a high dividend yield and the potential for capital growth by investing mainly in high yielding fixed interest securities. The appeal of this remit, and the Company's success in delivering it, has been evidenced by two further fund raisings; one of £1.8 million in December 2007, and another of £4.7 million in February 2008. Investment Performance If markets were difficult during the first few months of the Company's life, as I noted in the first Interim Report, they were very difficult thereafter. This was especially true of fixed interest markets which were traumatised by the sub-prime mortgage debacle in the United States and its attendant banking crises. American interest rates were slashed as the Federal Reserve attempted to stave-off recession, and we have witnessed the unusual sight of bond prices following interest rates down. Against this backdrop it is pleasing to be able to report a net asset value total return of 1.9 per cent since launch on 7 March 2007, while the share price total return was 1.4 per cent. We continue to trade at a modest premium to net asset value as I write. Dividends Dividends are the Company's bedrock, and we have now paid three dividends of 0.85 pence per share, in line with the rate envisaged in the Prospectus. Shareholders will note that this has been achieved alongside a significant increase in our revenue reserve. The yield to shareholders currently stands at approximately 6.7 per cent. Outlook It is the consequences of the credit crisis generated by the US sub-prime debacle, that underly the market's nervousness, and we can see no reason for this to change in the short term. We therefore remain cautious. That said, we do not believe that we are on the verge of a full-blown world-wide recession, and longer term valuations and yields look attractive - on a carefully selected basis.' Enquiries: Richard Lockwood, New City Investment Managers: 020 7201 5365 Graeme Ross, Company Secretary: 01534 825 236 Unaudited Income Statement Period from 17 January 2007 (date of incorporation) to 31 December 2007 Period to 31 December 2007 Revenue Capital Total £'000 £'000 £'000 Realised losses on disposal of investments - (869) (869) Unrealised losses on investments - (1,410) (1,410) Exchange losses - (102) (102) Income 5,718 - 5,718 Investment management fee (409) (136) (545) Other expenses (246) - (246) Net return before finance costs and taxation 5,063 (2,517) 2,546 Interest payable and similar charges (673) (224) (897) Return on ordinary activities before taxation 4,390 (2,741) 1,649 Irrecoverable withholding tax (66) - (66) Return on ordinary activities after taxation 4,324 (2,741) 1,583 Return per ordinary share (pence) 3.41p (2.16)p 1.25p Unaudited Balance Sheet as at 31 December 2007 As at 31 December 2007 £'000 Fixed assets Investments 79,576 Current assets Debtors 2,064 Cash at bank 4,056 6,120 Creditors: amounts falling due within one year (17,074) Net current liabilities (10,954) Net Assets 68,622 Share capital and reserves Stated capital account 18,806 Special distributable reserve 50,387 Capital reserves (2,741) Revenue reserve 2,170 Equity shareholders' funds 68,622 Net asset value per ordinary share (pence) 52.71p Unaudited Reconciliation of Movements in Shareholders' Funds Period from 17 January 2007 (date of incorporation) to 31 December 2007 Period to 31 December 2007 £'000 Equity shareholders' funds at 17 January 2007 (date of incorporation) - Return on ordinary activities after taxation 1,583 Increase in share capital in issue attributable to rollover from New City High Yield Trust plc 52,964 Increase in share capital in issue attributable to placings and offer for subscription 16,835 Launch costs (594) Cost of reduction in stated capital account (12) Dividends paid (2,154) Equity shareholders' funds at 31 December 2007 68,622 Summarised Unaudited Cash Flow Statement Period from 17 January 2007 (date of incorporation) to 31 December 2007 Period to 31 December 2007 £'000 Net cash inflow from operating activities 4,193 Net cash outflow from servicing of finance (815) Irrecoverable withholding tax paid (66) Net cash outflow from financial investments (15,762) Equity dividends paid (2,154) Net cash outflow before financing (14,604) Net cash inflow from financing 18,230 Increase in cash 3,626 Reconciliation of net cash flow to movement in net debt Increase in cash as above 3,626 Cash inflow from transfer of cash from New City High Yield Trust plc+ 532 Cash inflow from drawdown of loan (2,000) Exchange losses (102) Change in net debt resulting from cash flows 2,056 Opening net debt at 17 January 2007 - Transfer of loan from New City High Yield Trust+ (14,000) Closing net debt at 31 December 2007 (11,944) Represented by: Cash at bank 4,056 Debt falling due within one year (16,000) (11,944) Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities Net return before finance costs and taxation 2,546 Realised losses on disposal of investments 869 Unrealised losses on investments 1,410 Exchange losses 102 Increase in prepayments and accrued income (821) Increase in other creditors 87 Net cash inflow from operating activities 4,193 + On 6 March 2007 the net assets of New City High Yield Trust plc which totalled £52,964,000 were transferred in specie to New City High Yield Fund Limited. Cash of £532,000 and investments with a market value of £66,432,000 were received, and a loan of £14m due to Allied Irish Bank was also novated and transferred to the Company. Notes 1. The unaudited interim results which cover the period from incorporation on 17 January 2007 to 31 December 2007 have been prepared in accordance with applicable United Kingdom accounting standards and adopting the accounting policies which will be set out in the statutory accounts of the Company for the period ended 30 June 2008. The Company's year end is 30 June and the first accounting period will end on 30 June 2008. 2. A third interim dividend of 0.85p per share was paid on 28 February 2008. In accordance with revised UK GAAP this dividend has not been included as a liability in these accounts. 3. The breakdown of income for the period to 31 December 2007 was as follows: 31 December 2007 £'000 Income from investments Dvidend income 720 Interest on fixed interest securities 4,901 5,621 Other income Deposit interest 97 Total Income 5,718 4. The return per ordinary share is based on the net return on ordinary activities after taxation of £1,583,000 and on a weighted average of 126,859,619 ordinary shares in issue throughout the period. 5. On 6 March 2007 99,022,414 ordinary shares were issued pursuant to the scheme for the voluntary winding up of New City High Yield Trust plc and rollover of its shareholders interests into the Company. A further 27,674,414 ordinary shares were issued pursuant to a placing and offer for subscription which raised £15m. Dealings in these shares commenced on 7 March 2007. A further 3,500,000 ordinary shares were issued pursuant to a placing on 18 December 2007 and raised £1.8m. After the period end, a further 9,169,600 ordinary shares were issued pursuant to a placing on 28 February 2008 and raised £4.7 million. 6. On 24 May 2007, the Royal Court of the Island of Jersey confirmed that the amount standing to the credit of the Company's stated capital account be reduced by 75 per cent. This amount, being £50,993,244 has been used to create a distributable reserve in the Company's accounts. This reserve shall be treated as distributable profits available to be used for all purposes permitted by Jersey Company law including the buying back of ordinary shares, the payment of dividends and the payment of preliminary expenses. Launch costs of £594,000 and legal costs of £12,000 have been written off against this reserve. 7. The financial information for the period ended 31 December 2007 comprises non-statutory accounts. The first full audited accounts for the period ended 30 June 2008 will be lodged with the Registrar of Companies following the Annual General Meeting in 2008. This information is provided by RNS The company news service from the London Stock Exchange

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