Interim Results

New City High Yield Fund Limited
13 September 2007


To:         RNS

Date:       13 September 2007

From:       New City High Yield Fund Limited


Unaudited results for the six months ended 17 July 2007


•  Net asset value total return of 1.5 per cent since launch on 7 March 2007.

•  Ordinary share price total return of 0.5 per cent since launch on 7 March 
   2007.

•  Ordinary share price at a premium of 1.7 per cent to published net asset 
   value at 17 July 2007.

•  £15 million raised in March 2007 through a Placing and Offer for Subscription 
   (the 'Placing'), in addition to the rollover of New City High Yield Trust plc  
   shareholders' interests of £52.9m into the Company.


Jimmy West, the Chairman said:


'I am pleased to present the Company's first Interim Report. As required by law
this is for the six month period from incorporation on 17 January 2007 to 17
July 2007 and will be followed by a second Interim Report to 31 December 2007
and an 'Annual Report' to 30 June 2008.


Launch of the Company


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 the Placing.


We are particularly pleased with the diversity of the share register which
includes investors in Asia, Australasia, Europe and the British Isles.


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.


Investment Performance


The Company's Investment Manager is New City Investment Managers Limited which
was established by Richard Lockwood in April 2005.  Richard  managed New City
High Yield Trust plc since 1 November 2004 and is supported in managing the
Company's investment portfolio by Andrew Ferguson.


Since launch, the Manager has been investing the additional funds raised and
carefully selecting a range of investments at the high yield end of the market.
While the share price has fluctuated slightly, it is pleasing that despite
difficult markets the Company's net asset value rose by 1.5 per cent to 54.22
pence per share at 17 July 2007.  At the period end, the yield to shareholders
was approximately 6.3%.


Dividend


The first interim dividend in respect of the period ending 30 June 2008 of 0.85p
per share was announced on 17 July 2007 and was paid on 24 August 2007.  In the
absence of unforeseen circumstances a second interim dividend in respect of the
current period is expected to be announced in October and paid in November 2007.


Outlook


New City High Yield Fund Limited has started encouragingly in this first period.
The Placing has further increased the Company's critical mass and helped to
reduce the running costs as a percentage of net asset value.  The Manager will
continue to focus on generating sustainable income and the potential for capital
appreciation.'


Enquiries:

Richard Lockwood, New City Investment Managers:   020 7557 4370

Graeme Ross, Company Secretary:                   01534 825 236


Unaudited Income Statement


Six month period from 17 January 2007 (date of incorporation) to 17 July 2007

                                                                           Six months to 17 July 2007

                                                                        Revenue          Capital        Total
                                                                          £'000            £'000        £'000

Realised losses on disposal of investments                                    -             (23)         (23)
Unrealised losses on investments                                              -            (476)        (476)
Exchange gains                                                                -                7            7
Income                                                                    2,544                -        2,544
Investment management fee                                                 (184)             (61)        (245)
Other expenses                                                            (117)                -        (117)
Net return before finance costs and taxation                              2,243            (553)        1,690

Interest payable and similar charges                                      (270)             (90)        (360)
Return on ordinary activities before taxation                             1,973            (643)        1,330

Irrecoverable withholding tax                                              (25)                -         (25)
Return on ordinary activities after taxation                              1,948            (643)        1,305

Return per ordinary share (pence)                                         1.54p          (0.51p)        1.03p



Unaudited Balance Sheet as at 17 July 2007

                                                                               As at
                                                                        17 July 2007
                                                                               £'000
Fixed assets
Investments                                                                   83,231

Current assets
Debtors                                                                        1,694
Cash at bank                                                                   1,126
                                                                               2,820
Creditors: amounts falling due within one year                              (17,361)
Net current liabilities                                                     (14,541)

Net Assets                                                                    68,690

Share capital and reserves
Stated capital account                                                        16,998
Special distributable reserve                                                 50,387
Capital reserves:
 - realised                                                                    (167)
 - unrealised                                                                  (476)
Revenue reserve                                                                1,948
Equity shareholders' funds                                                    68,690

Net asset value per ordinary share (pence)                                    54.22p



Unaudited Reconciliation of Movements in Shareholders' Funds

Six month period from 17 January 2007 (date of incorporation) to 17 July 2007


                                                                       Six months to
                                                                        17 July 2007
                                                                               £'000
Equity shareholders' funds at 17 January 2007 (date of incorporation)              -
                                                                                   
Return on ordinary activities after taxation                                   1,305
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 Placing

                                                                              15,027
Launch costs                                                                   (594)
Cost of reduction in stated capital account                                     (12)
Equity shareholders' funds at 17 July 2007                                    68,690


Summarised Unaudited Cash Flow Statement


Six month period from 17 January 2007 (date of incorporation) to 17 July 2007


                                                                                       Six months to
                                                                                        17 July 2007
                                                                                               £'000

Net cash inflow from operating activities                                                      1,905
Net cash outflow from servicing of finance                                                     (239)
Irrecoverable withholding tax paid                                                              (25)
Net cash outflow from financial investments                                                 (17,475)
Net cash outflow before financing                                                           (15,384)
Net cash inflow from financing                                                                16,421
Increase in cash                                                                                 587

Reconciliation of new cash flow to movement in net debt
Increase in cash as above                                                                        587
Cash inflow from transfer of cash from New City High Yield Trust plc+

                                                                                                 532
Cash inflow from drawdown of loan                                                            (2,000)
Exchange gains                                                                                     7
Change in net debt resulting from cash flows                                                   (874)
Opening net debt at 17 January 2007                                                                -
Transfer of loan from New City High Yield Trust+                                            (14,000)
Closing net debt at 17 July 2007                                                            (14,874)

Represented by:
Cash at bank                                                                                   1,126
Debt falling due within one year                                                            (16,000)
                                                                                            (14,874)

Reconciliation of net return before finance costs and taxation to net cash
inflow from operating activities

Net return before finance costs and taxation                                                   1,690
Realised losses on disposal of investments                                                        23
Unrealised gains on investments                                                                  476
Exchange gains                                                                                   (7)

Increase in prepayments and accrued income                                                     (329)
Increase in other creditors                                                                       52
Net cash inflow from operating activities                                                      1,905


+  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 to Allied Irish Bank was also novated and
transferred to the Company.


Notes


1.    The unaudited interim results which cover the six months from 
      incorporation on 17 January 2007 to 17 July 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 first interim dividend of 0.85p per share was paid on 24 August 2007.  
      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 six months to 17 July 2007 was as follows:

                                                                    17 July 2007
                                                                           £'000
Income from investments
Dividend income                                                              347
Interest on fixed interest securities                                      2,136

                                                                           2,483
Other income
Deposit interest                                                              61
Total Income                                                               2,544


4.    The return per Ordinary share is based on the net return on ordinary 
      activities after taxation of £1,305,000 and on a weighted average of
      126,696,828 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.

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 six months ended 17 July 2007 comprise 
      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.



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