Seneca Growth Regulatory News (HYG)

14 Jan 2008 17:22

Hygea VCT plc14 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 willbe available on the Company's website: www.hygeavct.com. "The purpose of this letter is to update you about certain of the Hygeainvestments following our year end on 31st December 2007. Before doing so, I would mention that 18 Hygea shareholders contacted AndrewBoyle of London Capital Finance following my letter about enabling shareholdersto become more familiar with underlying portfolio companies. Since then, therehas been a web based conference by Hallmarq Veterinary Imaging and apresentation by Prosurgics to shareholders. A Hygea shareholder who attended thelatter said 'It helped me hugely to meet the company there is no way in whichthe quality of the underlying company could have been conveyed via Hygea'saccounts.' If any more of you wish to learn more details about Hygea's investeecompanies by participating in presentations, please email Andrew Boyle atawdb@ldncap.com, stating that you are a Hygea shareholder and providing yourphone 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 areencouraging such initiatives since listing may create the opportunity toincrease the carrying value of those investments in the accounts of Hygea soonerthan 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 12thDecember 2007, a recommended bid was made for BBI, resulting in selling theholding for £149,000. BBI is chaired by David Evans, who has a very goodoperating track record within the UK medical diagnostics sector - he also chairstwo 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 taskhas been developing an organisational structure which enables the business to bescaled 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 bythe market, including one of the leading equine vets in the UK, based inNewmarket, which is a very important influencer in the UK and internationalmarket. The upgrade combined with greater customer focus has enabled scan feerevenue to be increased by c. 24 % in 2007. Following a change of CEO at the end of 2006, Hallmarq has a much deeperunderstanding of its market, leading to the existing business model of leasingplus a modest share of scan fees being supplemented by a business model with alower initial risk to the vet but a greater downstream benefit to Hallmarq. Thisshould result in enlarging the market much more quickly and generate significantrecurring 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 pharmaceuticalcompany. US companies prefer to place orders (particularly where they arestrategically important) with local companies - so placing such an order with asmall UK company is very encouraging endorsement of the DxS technology. e) Prosurgics (develops robots to assist surgeons achieve better patientoutcomes at lower total cost) Two key events during the year were i) the recruitment of a new CEO in July (hecame 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 robotfor use in keyhole surgery) - with a consumable similar to the razor/razorbladebusiness model which will generate recurring revenues. Prosurgics is alsoplanning for an AIM listing in 2009. With respect to the AIM investees we continued to implement a policy of reducingthe number of existing holdings at a profit where possible. However we did makesome small investments in diagnostic companies because of the recurring incomestreams from consumables. The changes to the cost base implemented during 2006 and 2007 are now beingreflected in a reduced run rate of costs. This is entirely appropriate as, withthe fund fully invested, we need to minimise overheads while the investees worktheir way towards a liquidity event. Our overall approach is to focus on businesses which help deliver betteroutcomes for patients at lower total cost - we consider that these companieswill still be able to grow even in the challenging economic environment of2008." Appointment of Financial Adviser Hygea is also pleased to announce that it has appointed Beaumont Cornish Limitedas the Company's Financial Adviser. Enquiries: Charles Breese, Hygea VCT plc on 01280 703482 or larpentnewton@btinternet.com Roland Cornish, Beaumont Cornish Limited on 020 7628 3396 This information is provided by RNS The company news service from the London Stock Exchange