Final Results

City Natural Res High Yield Tst PLC
27 October 2006

To:      RNS

From:    City Natural Resources High Yield Trust plc

Date:    27 October 2006



Unaudited results for the year ended 30 June 2006



  • Net asset value total return of 48.6 per cent since 1 July 2005 compared
    to a total return of 43.5 per cent from the benchmark index



  • Ordinary Share price total return since 1 July 2005 of 45.5 per cent



  • Warrant price up by 200.0 per cent since 1 July 2005



  • Discount of 6.3 per cent



Introduction

My first year as Chairman has been one of great excitement and, I am pleased to
say, success for shareholders, with net asset value and share price total
returns of more than 45 per cent.



Investment Performance

The Company's net asset value per share rose by 48.1 per cent to 119.8 pence
during the year ended 30 June 2006.  To this must be added three quarterly
dividends of 0.5 pence per share and a fourth interim dividend of 0.65 pence per
share, the total of 2.15 pence representing a 7.5 per cent increase on last
year's 2.0 pence.



The net asset value total return for the year was 48.6 per cent, taking the net
asset value total return to 146.3 per cent since 1 August 2003 when the
reconstruction of the investment portfolio was completed following the change to
the Company's investment objective.



The share price rose from 77.75 pence to 110.75 pence during the year, an
increase of 42.4 per cent, the discount at which the shares trade widening a
little to 6.3 per cent.  The warrant price tripled from 13.0 pence to 39.0 pence
over the same period.



Investment Strategy

As the bull market in the natural resource sector has continued, so has the
Manager's strategy of taking full advantage of the capital growth opportunities
available. Against this background, it was particularly pleasing to be able to
increase the dividends declared well ahead of the rate of inflation. This was
achieved in large part by taking advantage of a trend within the natural
resource sector to issue convertibles rather than use bank debt.



We will not lose sight of the importance of income to shareholders.



I picked out the strength of the bullion sector in my Interim Statement. That
strength has continued, but other sectors worth highlighting include silver
amongst the precious metals; zinc and copper amongst the base ones; oil and gas;
uranium; and, soft commodities. The Company is well represented in all of these.



March saw another highlight for the Company as, for the first time since
inception; all of the Top Twenty holdings were natural resource related. This
reflected the issuance of natural resource convertibles to which I have already
made reference.



Board

Adam Cooke was appointed to the Board of the Company's investment manager, New
City Investment Managers Ltd ('NCIM'), on 21 March 2006. Under the Listing Rules
of the London Stock Exchange Adam and Adrian Collins, who is a Director of New
City High Yield Trust plc, which is also managed by NCIM, are deemed to be
unable to demonstrate their independence of NCIM. The Board is considering the
best means to ensure that the constitution of the Board meets the requirements
of the Listing Rules and principles of

corporate governance generally, while at the same time hoping to retain the
valued contributions of both Adam and Adrian, and would expect to make a further
announcement in this regard in due course.



Investment Management Fee

Having reviewed the level of management fees charged by other investment
managers in the sector in which the Company operates and given the strategic
nature of the debt, the Board has concluded that NCIM should be remunerated by
charging fees on gross rather than net assets. Given the nature of this change
it has decided that it is proper to give shareholders the opportunity to vote on
it.



Outlook

The sharp downturn in the markets in May served as a reminder that conditions do
remain volatile, and that speculative activity in the natural resource sector
may have driven the market ahead of itself. That said, the setback was short
lived and the ground lost has been recovered. More importantly, we believe that
the natural resource sector continues to offer exciting opportunities, and the
Board faces the future with confidence.







Enquiries:

Richard Lockwood, New City Investment Managers:             0207 557 4370

Martin Cassels, F&C Asset Management plc                        0131 465 1000


                           Unaudited Income Statement

                        for the year ended 30 June 2006




                                                          Notes            2006             2006          2006
                                                                        Revenue          Capital         Total
                                                                          £'000            £'000         £'000


Gains on investments                                                          -           25,147        25,147
Exchange losses                                                               -            (128)         (128)
Income                                                                    2,877                -         2,877
Investment management fee                                                 (217)            (654)         (871)
Other expenses                                                            (270)                -         (270)

Net return before finance costs and taxation                              2,390           24,365        26,755

Interest payable                                                          (236)            (603)         (839)

Return on ordinary activities before tax                                  2,154           23,762        25,916

Tax on ordinary activities                                                (599)              390         (209)

Return attributable to equity shareholders                                1,555           24,152        25,707




Return per Ordinary Share                                 1                2.48            38.42         40.90




Dividends recognised in the year


                                                                                                    Year ended
                                                                                                       30 June
                                                                                                    2006 £'000

Fourth interim dividend for the year ended 30 June 2005 of 0.5p per share                                  314


First interim dividend for the year ended 30 June 2006 of 0.5p per share                                   314


Second interim dividend for the year ended 30 June 2006 of 0.5p per share                                  314


Third interim dividend for the year ended 30 June 2006 of 0.5p per share                                   314

                                                                                                         1,256

                           Unaudited Income Statement

                   for the year ended 30 June 2005 (restated)




                                                               Notes          2005          2005          2005
                                                                           Revenue       Capital         Total
                                                                             £'000         £'000         £'000


Gains on investments                                                             -        11,649        11,649
Exchange losses                                                                  -          (88)          (88)
Income                                                                       2,513             -         2,513
Investment management fee                                                    (160)         (479)         (639)
Other expenses                                                               (299)             -         (299)

Net return before finance costs and taxation                                 2,054        11,082        13,136

Interest Payable                                                             (178)         (459)         (637)


Return on ordinary activities before tax                                     1,876        10,623        12,499

Tax on ordinary activities                                                   (457)           297         (160)


Return attributable to equity shareholders                                   1,419        10,920        12,339



Return per Ordinary Share                                          1          2.26         17.37         19.63



Dividends recognised in the year


                                                                                                    Year ended
                                                                                                       30 June
                                                                                                    2005 £'000

Fourth interim dividend for the year ended 30 June 2004 of 0.5p per share                                  314


First interim dividend for the year ended 30 June 2005 of 0.5p per share                                   314


Second interim dividend for the year ended 30 June 2005 of 0.5p per share                                  314


Third interim dividend for the year ended 30 June 2005 of 0.5p per share                                   314

                                                                                                         1,256

                      Unaudited Balance Sheet as at 30 June


                                                                                                       2005 
                                                                                     2006        (restated)
                                                                                    £'000             £'000

Fixed assets

Investments                                                                        92,556            61,607

Current assets

Debtors                                                                             1,076             1,152
Cash at bank and on deposit                                                           508               443
                                                                                    1,584             1,595

Creditors: amounts falling due within one year                                   (18,862)          (12,375)

Net current liabilities                                                          (17,278)          (10,780)

Net Assets                                                                         75,278            50,827

Capital and reserves
Called-up share capital                                                            15,714            15,714
Special distributable reserve                                                      30,386            30,386
Warrant reserve                                                                     2,353             2,353
Other reserves:
Capital reserve - realised                                                          6,482           (4,684)
Capital reserve - unrealised                                                       19,371             6,385
Revenue reserve                                                                       972               673

Equity shareholders' funds                                                         75,278            50,827


Net asset value per share                                   2                     119.76p            80.86p
                                                            




Reconciliation of Movements in Shareholders' Funds
                                                                                Year ended 30 Year ended 30
                                                                                    June 2006
                                                                                        £'000     June 2005
                                                                                                      £'000
Equity shareholders' funds at 30 June 2005/2004 (as previously reported)               51,321        39,971
Less revaluation of investments from mid to bid prices                                  (808)         (541)
Add dividends accrued at 30 June 2005/2004                                                314           314
Equity shareholders' funds at 30 June 2005/2004 (restated)                             50,827        39,744
Gains on investments                                                                   25,147        11,649
Return on ordinary activities after taxation                                            1,555         1,419
Increase in share capital                                                               (867)         (641)
Exchange Losses                                                                         (128)          (88)
Dividends paid                                                                        (1,256)       (1,256)
Equity shareholders' funds at 30 June 2006/2005                                        75,278        50,827


             Unaudited Cash Flow Statement for the year to 30 June




                                                                                     2006   2005 (restated)
                                                                                    £'000             £'000
Operating activities
Investment income received                                                          2,708             2,502
Deposit interest received                                                               -                14
Other income received                                                                  17                15
Investment management fees paid                                                     (760)             (668)
Other cash payments                                                                 (356)             (341)
Net cash inflow from operating activities                                           1,609             1,522

Servicing of finance
Interest on loan                                                                    (681)             (601)
Bank overdraft interest                                                              (35)              (21)
Net cash outflow from servicing of finance                                          (716)             (622)

Taxation
Tax paid                                                                            (154)              (74)


Capital expenditure and financial investment
Purchases of investments                                                         (49,504)          (29,850)
Disposals of investments                                                           44,714            28,756
Net cash outflow from capital expenditure and financial investment                (4,790)           (1,094)

Dividends
Equity dividends paid                                                             (1,256)           (1,571)
Net cash flow before financing                                                    (5,307)           (1,839)

Financing
Bank loan drawn down                                                                5,500             2,000
Net cash inflow from financing                                                      5,500             2,000


Increase/(decrease) in cash                                                           193               161


Reconciliation of net cash flow to movement in net debt

Increase/ (decrease) in cash in the year                                             193               161
Bank loan drawn down                                                              (5,500)           (2,000)
Exchange losses                                                                     (128)              (86)


Movement in net debt in the year                                                  (5,435)           (1,925)

Opening net debt at 1 July                                                       (11,557)           (9,632)

Closing net debt at 30 June                                                      (16,992)          (11,557)




Notes



1.   The basic revenue return per Ordinary share is based on the
net return after taxation of £1,555,000 (2005: £1,419,000) and on 62,857,143
(2005: 62,857,143) Ordinary shares being the weighted average number of Ordinary
shares in issue during the year.



The basic capital return per Ordinary share is based on a capital return of
£24,152,000 (2005: £10,920,000) and on 62,857,143 (2005: 62,857,143) Ordinary
shares, being the weighted average number of Ordinary shares in issue during the
year.



2.   During the year the Company did not issue any shares nor did the
Company purchase any shares for cancellation.



     The basic net asset value per Ordinary share of 119.8p (2005: 80.9p)
is based on 62,857,143 shares (2005: 62,857,143), being the total number of
Ordinary shares in issue at the end of the year.



The fully diluted net asset value per Ordinary share is 117.7p (2005: 80.9p).



3.  The Board declared a fourth interim dividend of 0.65p per share which
was paid on 25 August 2006 to shareholders on the register on 28 July 2006,
having an ex-dividend date of 26 July 2006.



The Board also declared a first interim dividend for the year ended 30 June 2007
which will be paid on 24 November 2006 to shareholders on the register on 27
October 2006, having an ex-dividend date of 25 October 2006.



4.  The financial information set out above does not constitute the
Company's statutory accounts for the year ended 30 June 2006.  The financial
information for 2005 is derived from the statutory accounts for 2005 which have
been delivered to the Registrar of Companies.  The Auditors have reported on the
2005 accounts, their report was unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.  The statutory accounts
for 2006 are unaudited, however it is expected that the Auditors will issue an
unqualified opinion. The statutory accounts for 2006 will be finalised on the
basis of the financial information presented in this preliminary announcement
and will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.






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