**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

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**Form 10-Q**

**(Mark One)**

**x**                              Quarterlyreport pursuant to Section 13 or 15 (d) of the Securities ExchangeAct of 1934

**Forthe quarterly period ended March 31, 2007**

**o**                                 Transitionreport pursuant to Section 13 or 15 (d) of the Securities ExchangeAct of 1934

**Forthe transition periodfrom             to**

**CommissionFile Number: 000-19889**

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**South Hertfordshire United Kingdom Fund, Ltd.**

Exact name of registrantas specified in charter

| **Colorado**           |   | **84-1145140**         |
|------------------------|--------|------------------------|
| State of  organization |   | I.R.S. employer  I.D.# |

 

**Media House, Bartley WoodBusiness Park, Hook,**

** Hampshire, RG27 9UP, England**

**+ 44 1256 752000**

(Address and TelephoneNumber of Principal Executive Offices)

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Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days. Yes x   No o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer’’ inRule 12b-2 of the Exchange Act. (Check one):

| Large accelerated filer   o |   | Accelerated  filer   o |   | Non-accelerated  filer   x |
|---------------------------------------|--------|----------------------------------|--------|--------------------------------------|

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the ExchangeAct). Yes o   No x

Thenumber of limited partnership units of the registrant outstanding as ofMay 7, 2007 was 56,935.

 

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**TABLE OF CONTENTS**
|               | ** ** | ** **             | ** ** | ** **                                                                                               | ** ** | ** ** | ** ** |
|---------------|------------|------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|------------|------------|
| PART I.  |       | FINANCIAL  INFORMATION |       |                                                                                                     |       |
|          |       | Item  1.               |       | Financial  Statements                                                                                    |       |       |       |
|          |       |                   |       | Condensed Consolidated Balance Sheets as of  March 31, 2007 and December 31, 2006              |       |       |       |
|          |       |                   |       | Condensed Consolidated Statements of Operations for  the Three Months Ended March 31, 2007 and 2006 |       |       |       |
|          |       |                   |       | Condensed Consolidated Statements of Cash Flows for  the Three Months Ended March 31, 2007 and 2006 |       |       |       |
|          |       |                   |       | Notes to Condensed Consolidated Financial Statements                                                     |       |       |       |
|          |       | Item 2.                |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations              |       |       |       |
|          |       | Item 3.                |       | Quantitative and Qualitative Disclosures About Market  Risk                                              |       |       |       |
|          |       | Item 4.                |       | Controls and Procedures                                                                                  |       |       |       |
| PART II. |       | OTHER  INFORMATION     |       |                                                                                                     |       |
|          |       | Item  1.               |       | Legal  Proceedings                                                                                       |       |       |       |
|          |       | Item  1A.              |       | Risk  Factors                                                                                            |       |       |       |
|          |       | Item 2.                |       | Unregistered Sales of Equity Securities and Use of  Proceeds                                             |       |       |       |
|          |       | Item 3.                |       | Defaults Upon Senior Securities                                                                          |       |       |       |
|          |       | Item 4.                |       | Submission of Matters to a Vote of Security Holders                                                      |       |       |       |
|          |       | Item  5.               |       | Other  Information                                                                                       |       |       |       |
|          |       | Item 6.                |       | Exhibits                                                                                                 |       |       |       |
|          |       |                   |       |                                                                                                     |       |       |       |
|          |       | SIGNATURES             |       |                                                                                                     |       |

 

2

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**“Safe Harbor” Statement under the Private SecuritiesLitigation Reform Act of 1995:**

Variousstatements contained in this document constitute “forward-lookingstatements” as that term is defined under the Private Securities LitigationReform Act of 1995. Words like “believe”, “anticipate”, “should”, “intend”, “plan”,“will”, “expects”, “estimates”, “projects”, “positioned”, “strategy” andsimilar expressions identify these forward-looking statements, whichinvolve known and unknown risks, uncertainties and other factors that may causeour actual results, performance or achievements or industry results to bematerially different from those contemplated, projected, forecasted, estimatedor budgeted, whether expressed or implied, by these forward-lookingstatements. These factors include those relating to:

·          our reliance on the continued support ofVirgin Media;

·          the lack of an established trading market forour partnership interests;

·          conflicts of interest between us and VirginMedia and its affiliates;

·          our reliance on a limited franchise area;

·          the risks to Virgin Media’s business setforth below, which are risks that we share as a result of our reliance on, andintegration with, Virgin Media;

·          Virgin Media’s ability to compete with arange of other communications and content providers;

·          Virgin Media’s ability to control customerchurn;

·          the effect of technological changes on VirginMedia’s businesses;

·          Virgin Media’s continued ability to use theVirgin name and logo;

·          Virgin Media’s ability to maintain andupgrade its networks in a cost-effective and timely manner;

·          possible losses in revenues due to systemsfailures;

·          Virgin Media’s ability to provide attractiveprogramming at a reasonable cost;

·             Virgin Media’s reliance on single-sourcesuppliers for some equipment, software and services and third party distributorsof its mobile services;

·          the functionality or market acceptance of new products that Virgin Media mayintroduce;

·              Virgin Media’s ability to obtain andretain expected synergies from the merger of legacy NTL and Telewest businessesand the acquisition of Virgin Mobile;

·          Virgin Media’s ability to achieve businessplans for the combined company;

·          Virgin Media’s ability to fund debt serviceobligations through operating cash flow;

·          Virgin Media’s ability to obtain additionalfinancing in the future and react to competitive and technological changes;

·          Virgin Media’s ability to comply withrestrictive covenants in its indebtedness agreements; and

·          the extent to which Virgin Media’s futureearnings will be sufficient to cover its fixed charges.

These and other factors are discussed in more detailunder “Risk Factors” and elsewhere in our Form 10-K that was filedwith the SEC on March 29, 2007. We assume no obligation to update the forward-lookingstatements to reflect actual results, changes in assumptions or changes infactors affecting these statements.

**Note Concerning VirginMedia Inc.**

On March 3, 2006, NTL Incorporated, or NTL,merged with a subsidiary of Telewest Global, Inc., or Telewest, which changedits name to NTL Incorporated.  NTLchanged its name to NTL Holdings Inc.

Virgin Media entered into a license agreement withVirgin Enterprises Limited under which it is licensed to use certain Virgintrademarks within the United Kingdom and the Republic of Ireland. As a result,in February 2007, Virgin Media rebranded its consumer and a large part of itscontent businesses to “Virgin Media”.  Italso changed the name of its corporate parent from NTL Incorporated to VirginMedia Inc. and NTL Group Limited to Virgin Media Limited.

3

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In this quarterly report, unless the context otherwiserequires, the term “we”, “us”, “our” and similar terms refers to SouthHertfordshire United Kingdom Fund, Ltd, and its subsidiaries.

**Exchange Rates**

The following table sets forth, for the periodsindicated, the high, low, period average and period end noon buying rate in theCity of New York for cable transfers as certified for customs purposes by theFederal Reserve Bank of New York expressed as U.S. dollars per £1.00. The noonbuying rate of the pound sterling on March 31, 2007 was $1.9685 per £1.00.

|                                                      | ** ** | **U.S. Dollars per £1.00** | ** ** |
|------------------------------------------------------|------------|------------------------------------------------|------------|
| **Three Months Ended March 31,** | ** ** | **Period End**                            | ** ** | **Average(1)** | ** ** | **High** | ** ** | **Low** | ** ** |
| 2006                                                 |       | 1.74                                           |       | 1.75 |   | 1.79 |   | 1.73 |   |
| 2007                                                 |       | 1.97                                           |       | 1.96 |   | 1.98 |   | 1.92 |   |

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(1)             Theaverage rate is the average of the noon buying rates on the last day of eachmonth during the relevant period.

The above rates may differ from the actual rates usedin the preparation of the condensed consolidated financial statements and otherfinancial information appearing in this quarterly report. Our inclusion ofthese exchange rates is not meant to suggest that the pound sterling amountsactually represent these U.S. dollar amounts or that these amounts could havebeen converted into U.S. dollars at any particular rate, if at all.

Unless we otherwise indicate, all U.S. dollar amountsas of March 31, 2007 are translated to U.S. dollars at an exchange rate of$1.9685 to £1.00, all amounts disclosed for the three months endedMarch 31, 2007 are based on an average exchange rate of $1.955 to £1.00,and all amounts disclosed for the three months ended March 31, 2006 arebased on an average exchange rate of $1.7536 to £1.00. All amounts disclosed asof December 31, 2006 are based on an exchange rate of 1.9586 to £1.00. Allrates are based on the noon buying rate in the City of New York for cabletransfers as certified for customs purposes by the Federal Reserve Bank of NewYork. The variation between the 2007 and 2006 exchange rates has affected thedollar comparisons.

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**PART 1. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED BALANCE SHEETS**
| ** **                                                                                              | ** ** | **March 31,  2007** | ** ** | **December 31,  2006** | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| ** **                                                                                              | ** ** | **(unaudited)**          | ** ** | **(see note)**         | ** ** |
| **Assets**                                                                                              | ** ** | ** **               | ** ** | ** **                  | ** ** |
| Fixed assets, net                                                                                       |       | $                        | 65,360,546 |                        | $          | 66,079,566 |   |
| **Total assets**                                                                                        |       | $                        | 65,360,546 |                        | $          | 66,079,566 |   |
| ** **                                                                                              |       |                     |       |                        |       |
| **Liabilities and Partners’  Deficit**                                                             | ** ** | ** **               | ** ** | ** **                  | ** ** |
| Current liabilities                                                                                     |       |                     |       |                        |       |
| Accounts payable  to affiliates and related parties                                                     |       | $                        | 70,759,739 |                        | $          | 71,196,561 |   |
| Total liabilities                                                                                       |       | 70,759,739               |       | 71,196,561                  |       |
| ** **                                                                                              | ** ** | ** **               | ** ** | ** **                  | ** ** |
| **Minority interest**                                                                                   | ** ** | ** **               | ** ** | ** **                  | ** ** |
| Minority interest                                                                                       |       | —                   |       | —                      |       |
| ** **                                                                                              | ** ** | ** **               | ** ** | ** **                  | ** ** |
| **Partners’ Capital (Deficit)**                                                                    | ** ** | ** **               | ** ** | ** **                  | ** ** |
| General Partner                                                                                         |       |                     |       |                        |       |
| Contributed  capital                                                                                    |       | 1,000                    |       | 1,000                       |       |
| Accumulated  deficit                                                                                    |       | (538,496                 | )          | (535,751                    | )          |
|                                                                                                    |       | (537,496                 | )          | (534,751                    | )          |
| Limited Partners                                                                                        |       |                     |       |                        |       |
| Contributed  capital, net (56,935 units outstanding at March 31, 2007 and  December 31, 2006) |       | 48,817,997               |       | 48,817,997                  |       |
| Accumulated  deficit                                                                                    |       | (53,030,060              | )          | (52,758,352                 | )          |
|                                                                                                    |       | (4,212,063               | )          | (3,940,355                  | )          |
|                                                                                                    |       |                     |       |                        |       |
| Accumulated  comprehensive loss                                                                         |       | (649,634                 | )          | (641,889                    | )          |
| Total Partners’  deficit                                                                           |       | (5,399,193               | )          | (5,116,995                  | )          |
| ** **                                                                                              |       |                     |       |                        |       |
| **Total Liabilities and Partners’ Deficit**                                                        |       | $                        | 65,360,546 |                        | $          | 66,079,566 |   |

 

Note: The balance sheet at December 31, 2006 hasbeen derived from audited financial statements at that date.

See accompanying notes.

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)**
|                                                                        | ** ** | **Three months ended  March 31,** | ** ** |
|------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                             | ** ** | **2007**                                         | ** ** | **2006** | ** ** |
| **Revenues**                                                           |       | $                                                | 10,103,923 |   | $ | 9,170,963 |   |
| ** **                                                             | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| **Costs and expenses**                                                 | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Cost of goods sold  (exclusive of depreciation shown separately below) |       | (2,528,614                                       | )          | (2,457,586 | ) |
| Selling, general and  administrative expenses                          |       | (30,687                                          | )          | (20,615 | ) |
| Management fees and  allocated overhead from the General Partner       |       | (4,576,446                                       | )          | (4,022,996 | ) |
| Other charges                                                          |       | (117,633                                         | )          | (157,707 | ) |
| Depreciation                                                           |       | (1,828,658                                       | )          | (1,719,975 | ) |
| ** **                                                             |       |                                             |       |   |   |
| **Operating income**                                                   |       | 1,021,885                                        |       | 792,084 |   |
| ** **                                                             | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| **Other expenses**                                                     | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Interest payable to General  Partner and affiliates                    |       | (1,284,641                                       | )          | (1,503,059 | ) |
| Exchange losses                                                        |       | (11,697                                          | )          | (23,383 | ) |
| ** **                                                             |       |                                             |       |   |   |
| **Loss before minority interest**                                      |       | (274,453                                         | )          | (734,358 | ) |
| Minority interest  income                                              |       | —                                           |       | 213,266 |   |
| ** **                                                             |       |                                             |       |   |   |
| **Net loss**                                                           |       | $                                                | (274,453   | ) | $ | (521,092 | ) |
| ** **                                                             | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| **Allocation of net loss**                                             | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| General Partner                                                        |       | $                                                | (2,745     | ) | $ | (5,211 | ) |
| Limited Partners                                                       |       | (271,708                                         | )          | (515,881 | ) |
| **Net loss**                                                           |       | $                                                | (274,453   | ) | $ | (521,092 | ) |
| ** **                                                             |       |                                             |       |   |   |
| **Net loss per limited  partnership unit**                             |       | $                                                | (4.77      | ) | $ | (9.06 | ) |
| ** **                                                             |       |                                             |       |   |   |
| **Average number of limited partnership units  outstanding**           |       | 56,935                                           |       | 56,935 |   |

 

See accompanying notes.

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)**
| ** **                                                                       | ** ** | **Three months ended  March 31,** | ** ** |
|----------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                                       | ** ** | **2007**                                         | ** ** | **2006** | ** ** |
| **Cash flows from operating  activities**                                        | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Net loss                                                                         |       | $                                                | (274,453   | ) | $ | (521,092 | ) |
| Adjustments to  reconcile net loss to net cash provided by operating activities: |       |                                             |       |   |   |
| Minority interest income                                                         |       | —                                           |       | (213,266 | ) |
| Depreciation                                                                     |       | 1,828,658                                        |       | 1,719,975 |   |
| Change in operating  assets and liabilities:                                     |       |                                             |       |   |   |
| Decrease in accounts  payable to affiliates and related parties                  |       | (771,011                                         | )          | (681,424 | ) |
| **Net cash provided by operating  activities**                                   |       | 783,194                                          |       | 304,193 |   |
| ** **                                                                       | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| **Cash flows from investing  activities**                                        | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Purchase of fixed  assets                                                        |       | (783,194                                         | )          | (304,193 | ) |
| **Net cash used in investing  activities**                                       |       | (783,194                                         | )          | (304,193 | ) |
| ** **                                                                       |       |                                             |       |   |   |
| **Cash and cash equivalents at end of period**                                   |       | $                                                | —     |   | $ | — |   |

 

See accompanying notes.

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.(A LIMITED PARTNERSHIP)**

**NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS(Unaudited)**

**Note 1.   Basis of Presentation**

**Organization andBusiness**

South Hertfordshire United Kingdom Fund, Ltd., or thePartnership, a Colorado limited partnership, was formed on December 23, 1991,in connection with a public offering of its limited partnership interests.  The Partnership was formed to acquire,construct, develop, own and operate cable television/telephone systems in theU.K. NTL Fawnspring Limited, a U.K. corporation, a subsidiary of Virgin MediaInc., or Virgin Media, is the general partner (the “General Partner”) of the Partnership.Upon acquisition of our system, our primary investment objective was to obtaincapital appreciation in the value of our investment in the system over the termthat such investment is held by us.

We hold 66.7% of the shares of NTL (SouthHertfordshire) Limited, or NTL South Herts, which is principally engaged in thedevelopment, construction, management and operation of broadband communicationsnetworks for telephone, cable television and internet services in the UnitedKingdom. As a result of our ownership of 66.7% of the shares of NTL SouthHerts, for accounting purposes, we have consolidated the results of NTL SouthHerts with our results. Virgin Media Inc. (formerly known as NTL Incorporated)indirectly holds the remaining 33.3% of the shares of NTL South Herts. We arereliant on the support of Virgin Media, the ultimate parent company of theGeneral Partner, to continue our operations as a going concern.

We, as well as Virgin Media, file annual, quarterly,and current reports with the SEC. You may read and copy any materials we orVirgin Media files with the SEC at the SEC’s Public Reference Room at 100F Street, N.E., Washington D.C. 20549. You may obtain information on theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.You may also access electronically the information we file with the SEC via itswebsite, located at http://www.sec.gov*.*

**Basis ofPresentation**

We have prepared the accompanying unaudited condensedconsolidated financial statements in accordance with U.S. generally acceptedaccounting principles, or GAAP, for interim financial information and with theinstructions to Form 10-Q and Rule 10-01 of RegulationS-X. Accordingly, they do not include all of the information and footnotesrequired by GAAP for complete financial statements. In the opinion of ourmanagement, all adjustments (consisting only of normal recurring adjustments)considered necessary for a fair presentation have been included. Results ofoperations for the period ended March 31, 2007 are not necessarilyindicative of results to be expected for the full year ending December 31,2007. For further information, refer to the consolidated financial statementsand footnotes thereto included in our Annual Report on Form 10-K forthe year ended December 31, 2006.

**Note 2.   Comprehensive Loss**

Comprehensive lossincludes net loss as well as other comprehensive loss. Our other comprehensive lossconsists of changes in cumulative translation adjustment. Comprehensive losscomprises:

|                                           | ** ** | **Three months ended  March 31,** | ** ** |
|-------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                | ** ** | **2007**                                         | ** ** | **2006** | ** ** |
| Net loss                                  |       | $                                                | (274,453   | ) | $ | (521,092 | ) |
| Foreign currency  translation adjustments |       | 7,745                                            |       | (20,351 | ) |
| Comprehensive loss                        |       | $                                                | (266,708   | ) | $ | (541,443 | ) |

 

**Note 3.   Investment in Subsidiary**

NTL South Herts is a U.K. corporation which isprincipally engaged in the development, construction, management and operationof broadband communication networks for telephone, cable television andinternet services in the South Hertfordshire franchise area, located adjacentto the northwest perimeter of Greater London, England (the “South Herts System”).

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NTL South Herts is owned 66.7% by the Partnership and33.3% by Virgin Media. Virgin Media also owns the General Partner. The GeneralPartner provides consulting services to the Partnership and may delegate someor all of the consulting services to Virgin Media or to other affiliates.

Virgin Media, through its subsidiaries, including itsinterest in NTL South Herts, provides broadband internet access, telephone andtelevision services to approximately 4.8 million residential cable customers asat March 31, 2007.

**Note 4.   Transactions with the GeneralPartner and Affiliated Parties**

*Consulting andManagement Fees*

An affiliate of the General Partner is entitled to bepaid a consulting fee by NTL South Herts. During the construction phases of theSouth Herts System, this consulting fee was 2% of construction costs. Sincecompletion of construction of each portion of the system, the consulting feefor the completed portion has been 5% of the gross revenue, excluding revenuefrom the sale of cable television/telephone systems. The consulting fee iscalculated and payable monthly. Consulting fees paid or payable by NTL SouthHerts for the three months ended March 31, 2007 and 2006 were $505,196 and$458,549, respectively. These amounts were expensed in the consolidatedstatements of operations each period.

*DistributionRatios and Reimbursement*

Any Partnership distributions made from cash flow(defined as cash receipts derived from routine operations, less debt principaland interest payments and cash expenses) are allocated 99% to the limitedpartners and 1% to the General Partner. Any distributions other than interestincome on limited partner subscriptions earned prior to the acquisition of thePartnership’s first cable television system or from cash flow, such as from thesale or refinancing of a system or upon dissolution of the Partnership, will bemade as follows: 99% to the limited partners and 1% to the General Partneruntil any negative balances in the limited partners’ capital accounts arereduced to zero; 100% to the General Partner until any negative balance in itscapital account is reduced to zero; 99% to the limited partners and 1% to theGeneral Partner until the balance in the limited partners’ capital accounts isequal to their adjusted capital contribution plus a 12% return; 100% to theGeneral Partner until the balance in its capital account is equal to itsadjusted capital contribution, and any remaining income or gain shall beallocated 75% to the limited partners and 25% to the General Partner.

Our General Partner and its affiliates are entitled toreimbursement from NTL South Herts for direct and indirect expenses allocableto the operation of its network and from us for direct and indirect expensesallocable to our operation which include, but are not limited to, rent,supplies, telephone, travel, and salaries of any full or part-time employees.Allocable direct and indirect expenses during the three months ended March 31,2007 and 2006 totaled $4,071,250 and $3,564,447, respectively.

Our General Partner and its affiliates may makeadvances to, and defer collection of fees and allocated expenses owed by us,although they are not required to do so. The Partnership is charged interest onsuch advances and deferred amounts. For the three months ended March 31,2007 and 2006, aggregated interest, bank fees and finance charges of $1,244,365and $1,469,028, respectively, relating to non-permanent loans was charged byaffiliates of the General Partner, and interest on advances of $40,276 and$34,031, respectively, was charged by an affiliate of the General Partner at arate equal to the General Partner’s or certain affiliates’ effective averagecost of debt financing from unaffiliated entities, which does not differ fromtheir weighted average cost of debt financing.

Our General Partner and its affiliates are entitled torecover interest on the full amount of non-permanent loans they provide to thePartnership or NTL South Herts and the portion of bank fees and deferredfinancing costs relating to Virgin Media’s senior credit facilities allocableto the Partnership or NTL South Herts. 

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**Item 2.**                          Management’sDiscussion and Analysis of Financial Condition and Results of Operations

**Overview**

We are a Colorado limited partnership that was formedin December 1991 pursuant to the public offering of our limitedpartnership interests for the purpose of acquiring one or more cabletelevision/telephone systems in the U.K. Upon acquisition of our system, ourprimary investment objective was to obtain capital appreciation in the value ofour investment in the system over the term such investment is held by us.

We hold 66.7% of the shares of NTL South Herts, whichis principally engaged in the development, construction, management andoperation of broadband communications networks for telephone, cable televisionand internet services in the U.K. As a result of our ownership of 66.7% of theshares of NTL South Herts, for accounting purposes we have consolidated theresults of NTL South Herts with our results. Virgin Media indirectly holds theremaining 33.3% of the shares of NTL South Herts. We are reliant on the supportof Virgin Media, the indirect parent company of NTL Fawnspring Limited, ourGeneral Partner, to continue our operations as a going concern.

We derive our revenue principally from monthly feesand usage charges. Our packaging of services and pricing are designed toencourage our customers to use multiple services like dual telephone andbroadband, dual telephone and television or triple telephone, television andinternet access.

The principal components of our expenses includepayroll and other employee related costs; interconnection costs paid to othercarriers related to telephone services; television programming costs; marketingand selling costs; repairs and maintenance; facility related costs, such asrent, utilities and rates; and allowances for doubtful accounts. Our expensesinclude certain costs that are charged by a subsidiary of Virgin Media for theprovision of network services and support, the use of Virgin Media’s nationalbackbone telephone network for carriage of our telephone traffic, as well asthe provision of technical infrastructure and network capacity by Virgin Mediafor our subscription internet access services and digital television services,the provision of corporate services, including finance, legal, human resources andfacility services, and for the provision of IT services, including our use ofthe related IT equipment.

**FactorsAffecting Our Business**

Our residential customers account for the majority ofour total revenue. The number of residential customers, the number and types ofservices that each customer uses and the prices we charge for these servicesdrive our revenue. Our net income is driven by the relative margins on thetypes of services we provide to these customers and by the number of servicesthat we provide to them. For example, broadband internet is more profitablethan our television services and, on average, our “triple-play” customers aremore profitable than “double-play” or “single-play” customers. Our packaging ofservices and our pricing are designed to encourage our customers to usemultiple services such as television, telephone and broadband at a lower pricethan each stand-alone product on a combined basis. Factors particularlyaffecting our profitability include customer churn, competition, the success ofour integration efforts, capital expenditures, currency movements andseasonality.

***SelectedOperating Data***

The followingtable sets forth certain data concerning our franchise at March 31, 2007and December 31, 2006:

|                                    | ** ** | **March 31,  2007** | ** ** | **December 31,  2006** | ** ** |
|------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| Homes  marketable(1)               |       | 96,663                   |       | 96,886                      |       |
| Total customers                    |       | 35,698                   |       | 36,863                      |       |
| Digital cable  subscribers         |       | 23,252                   |       | 22,971                      |       |
| Analog cable  subscribers          |       | 806                      |       | 1,007                       |       |
| Broadband  internet subscribers    |       | 23,019                   |       | 22,642                      |       |
| Telephony  subscribers             |       | 29,588                   |       | 30,715                      |       |
| Penetration  (homes marketable)(2) |       | 36.9                     | %          | 38.0                        | %          |
| Churn(3)                           |       | 1.7                      | %          | 1.8                         | %          |

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(1)             Homesmarketable refers to the number of homes within our service area that have hadducting buried outside and can potentially be served by our network withminimal connection costs.

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(2)             Penetration measuresthe number of subscribers for our services divided by the number of homesmarketable.

(3)                  Customer churnis calculated by taking the total number of customers disconnecting from ourservices during the month and dividing them by the average number of customersduring the month.  Average monthly churnduring the quarter is the average of the three monthly churn calculationswithin the quarter.

***Customer Churn.******  *** Customer churn is a measureof the number of customers who stop using our services. An increase in ourcustomer churn can lead to increased costs and reduced revenue. We continue tofocus on improving our customer service and enhancing and expanding our serviceofferings to existing customers in an effort to manage our customer churn rate.Our ability to reduce our customer churn rate beyond a base level is limited byfactors like customers moving outside our network service area, in particularduring the summer season. Managing our customer churn rate is a significantcomponent of our business plan. Our customer churn rate may increase if ourcustomer service is seen as unsatisfactory, if we are unable to deliver ourservices over our network without interruption, or if we fail to matchofferings by our competitors.

***Competition.******  *** Our ability to acquire andretain customers and increase revenue depends on Virgin Media’s and ourcompetitive strength. There is significant competition in the market for ourconsumer services, including broadband and telephone services offered byBritish Telecom (“BT”) and resellers or local loop unbundlers, alternativeinternet access services like DSL, satellite television services offered byBritish Sky Broadcasting Group plc (“BSkyB”), digital terrestrial televisionoffered through Freeview, internet protocol television offered by Tiscali S.p.A.(“Tiscali”) and BT. Certain competitors, such as BT and BSkyB, are dominant inmarkets in which Virgin Media and we compete and may use their dominance inthose markets to offer bundled services that include two or more of our productofferings. If competitive forces prevent us from charging the prices for theseservices that we plan to charge, or if our competition is able to attract ourcustomers or potential customers we are targeting, our results of operationswill be adversely affected.

***Integration.******  ***VirginMedia is presently integrating its legacy NTL and Telewest cable businesses.This involves the incurrence of substantial operating and capital expendituresand, in some cases, involves the outsourcing of key functions in an effort toachieve synergies through the integration of the two businesses. For example,the principal billing platform used by us has recently been migrated to a newsystem as part of Virgin Media’s program to consolidate all of its billingplatforms. While these integration efforts are presently on track, any issuesthat may arise in connection with the integration could have a materialnegative effect on our financial performance.

***CapitalExpenditures.******  *** Ourbusiness requires substantial capital expenditures on a continuing basis forvarious purposes, including expanding, maintaining and upgrading our network,investing in new customer acquisitions, and offering new services. If VirginMedia and we do not continue to invest in the network and in new technologies,our ability to retain and acquire customers may be hindered. Therefore, VirginMedia’s and our liquidity and the availability of cash to fund capital projectsare important drivers of our revenue. When Virgin Media’s and our liquidity isrestricted, so is our ability to meet our capital expenditure requirements.

***CurrencyMovements.******  ***Because substantially all of our revenue and operating costs are earned andpaid primarily in U.K. pounds sterling, but we report our financial results inU.S. dollars, our financial results are impacted by currency fluctuations whichare unrelated to our underlying results of operations.

***Seasonality.******  *** Some revenue streams aresubject to seasonal factors. For example, telephone usage revenue by customersand businesses tends to be slightly lower during summer holiday months. Ourcustomer churn rates include persons who disconnect their service because ofmoves, resulting in a seasonal increase in our churn rates during the summermonths when higher levels of U.K. house moves occur and students leave theiraccommodations between academic years.

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**Critical AccountingPolicies**

The preparation of our consolidated financialstatements requires us to make estimates that affect the reported amounts ofassets, liabilities, revenues and expenses, and related disclosure ofcontingent assets and contingent liabilities. We base our judgments onhistorical experience and on various other assumptions that we believe arereasonable under the circumstances, the results of which form the basis formaking estimates about the carrying values of assets and liabilities that are notreadily apparent from other sources. Actual results may differ from theseestimates under different assumptions or conditions.

For a discussion of the accounting judgments andestimates that we have identified as critical in the preparation of our consolidatedfinancial statements, please refer to our Annual Report on Form 10-K for theyear ended December 31, 2006 as filed with the SEC on March 29, 2007.

**RESULTS OF OPERATIONS**

***ThreeMonths Ended March 31, 2007 and 2006***

The followingtable summarizes our consolidated financial information for the three monthsended March 31, 2007 and 2006:

|                                              | ** ** | **Three months ended  March 31,** | ** ** | ** ** | ** ** | **Three months ended  March 31,** | ** ** | ** ** | ** ** |
|----------------------------------------------|------------|--------------------------------------------------|------------|------------|------------|--------------------------------------------------|------------|------------|------------|
| ** **                                   | ** ** | **2007**                                         | ** ** | **2006**   | ** ** | **%**                                            | ** ** | **2007**   | ** ** | **2006** | ** ** | **%** | ** ** |
| Revenue                                      |       | $                                                | 10,103,923 |       | $          | 9,170,963                                        |       | 10.2       |       | £ | 5,168,247 |   | £ | 5,229,792 |   | (1.2 | ) |
| Cost of goods  sold                          |       | (2,528,614                                       | )          | (2,457,586 | )          | (2.9                                             | )          | (1,293,409 | )          | (1,401,452 | ) | 7.7 |   |
| Selling, general  and adminstrative expenses |       | (30,687                                          | )          | (20,615    | )          | (48.9                                            | )          | (15,697    | )          | (11,756 | ) | (33.5 | ) |
| Management fees  and allocated overhead      |       | (4,576,446                                       | )          | (4,022,996 | )          | (13.8                                            | )          | (2,340,893 | )          | (2,294,136 | ) | (2.0 | ) |
| Other charges                                |       | (117,633                                         | )          | (157,707   | )          | 25.4                                             |       | (60,170    | )          | (89,933 | ) | 33.1 |   |
| Depreciation                                 |       | (1,828,658                                       | )          | (1,719,975 | )          | (6.3                                             | )          | (935,375   | )          | (980,825 | ) | 4.6 |   |
| Operating income                             |       | 1,021,885                                        |       | 792,084    |       | 29.0                                             |       | 522,703    |       | 451,690 |   | 15.7 |   |
| Interest expense                             |       | (1,284,641                                       | )          | (1,503,059 | )          | 14.5                                             |       | (657,105   | )          | (857,127 | ) | 23.3 |   |
| Exchange losses                              |       | (11,697                                          | )          | (23,383    | )          | 50.0                                             |       | (5,983     | )          | (13,334 | ) | 55.1 |   |
| Net loss before  minority interests          |       | (274,453                                         | )          | (734,358   | )          | 62.9                                             |       | (140,385   | )          | (418,771 | ) | 66.5 |   |
| Minority  interest                           |       | —                                           |       | 213,266    |       | —                                           |       | —     |       | 121,616 |   | — |   |
| Net loss                                     |       | $                                                | (274,453   | )          | $          | (521,092                                         | )          | 47.7       |       | £ | (140,385 | ) | £ | (297,155 | ) | 52.8 |   |

 

*Revenue*

For the three months ended March 31, 2007,revenue increased by 10.2% to $10.1 million from $9.2 million for the threemonths ended March 31, 2006 and revenue expressed in pounds sterling remainedbroadly constant at £5.2 million for both periods. Lower revenues due to adecrease in the number of telephony subscribers and declining telephony usagehave been offset by higher broadband revenue due to an increase in the numbersof broadband subscribers.

*Expenses*

*Costsof goods sold.**  *Costs ofgoods sold remained relatively constant at $2.5 million for the three monthsended March 31, 2007 and 2006 and cost of goods sold expressed in poundssterling decreased by 7.7% to £1.3 million for the three months ended March 31,2007 from £1.4 million for the three months ended March 31, 2006. Costs ofgoods sold as a percentage of revenue declined to 25.0% for the three monthsended March 31, 2007 from 26.8% for the same period in 2006 primarilybecause revenue growth was focused on higher-margin services and customers,particularly consumer broadband internet services.

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*Selling,general and administrative expenses.**  *For the three months ended March 31, 2007,selling, general and administrative expenses increased to $30,687 from $20,615in the three months ended March 31, 2006. This increase is primarily attributableto the higher cost of investor relations’ services.

*Managementfees and allocated overhead.**  *Forthe three months ended March 31, 2007, management fees and allocatedoverhead increased by 13.8% to $4.6 million from $4.0 million for the sameperiod in 2006 but management fees and allocated overhead expressed in poundssterling remained broadly constant at £2.3 million in both periods. Thebusiness of NTL South Herts is managed as an integral part of Virgin Media. Thecombined costs of managing the larger group are allocated to each entity withinthe Virgin Media group, including NTL South Herts, on a consistent andproportional basis according to the level of trading in that entity.

*Othercharges.**  *For thethree months ended March 31, 2007, other charges decreased to $117,633from $157,707 for the same period in 2006. Other charges in the three monthsended March 31, 2007 and 2006 comprised restructuring costs allocated tous by a subsidiary of Virgin Media in respect of lease exit costs in connectionwith properties that have been vacated and redundancy costs following NTL’sreverse acquisition of Telewest. Charges allocated to us by a subsidiary ofVirgin Media are made on the basis of an allocation formula appropriate to eachcategory of charge based on a reasonable methodology given the facts andcircumstances.

*Depreciation expense*

For the three months ended March 31, 2007,depreciation expense increased to $1.8 million from $1.7 million for the threemonths ended March 31, 2006 but depreciation expense expressed in poundssterling decreased by 4.6% to £935,375 for the three months ended March 31, 2007from £980,825 for the three months ended March 31, 2006.

*Interest expense*

For the three months ended March 31, 2007,interest expense decreased to $1,284,641 from $1,503,059 for the three monthsended March 31, 2006, and interest expense expressed in pounds sterlingdecreased to £657,105 for the three months ended March 31, 2007 from£857,127 for the same period in 2006.  Thedecrease  is due to the lower bank feesand deferred financing costs allocated to us in the three months ended March31, 2007 than in the three months ended March 31, 2006 by a subsidiary ofVirgin Media following Virgin Media’s refinancing in connection with itsreverse acquisition of Telewest.

We paid no cash interest for the three months endedMarch 31, 2007 and 2006.

*Exchange losses*

For the three months ended March 31, 2007,foreign currency exchange losses were $11,697 as compared with losses of$23,383 for the three months ended March 31, 2006. The change in exchange losses is primarily attributable tofluctuations in the valuation of the U.S. dollar on certain of our assets andtransactions, which are denominated in pounds sterling. The U.S. dollardepreciated 13.2% against the pound sterling from March 31, 2006 to March 31, 2007.Our results of operations will continue to be affected by foreign currency exchangerate fluctuations.

*Minority Interest*

As of March 31, 2007, NTL South Herts’liabilities exceeded its assets and we have therefore not recognized a minorityinterest credit  representing a 33.3%share of NTL South Herts’ net loss for the three months ended March 31,2007. For the three months ended March 31, 2006, we recognized a minorityinterest credit of $213,266.

*Net Loss*

For the three months ended March 31, 2007, netloss improved to $274,453 as compared with net loss of $521,092 for the sameperiod in 2006 primarily due to the reasons described above.

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**CondensedConsolidated Statement of Cash Flows**

In the three months ended March 31, 2007, wegenerated $783,194 from our operating activities compared with $304,193 in thethree months ended March 31, 2006, and used it to purchase fixed assetsincluding equipment for customer installations. Our cash provided by operatingactivities has decreased primarily due to repayment of amounts due toaffiliates.

**Liquidity andCapital Resources**

We have no financing independent of Virgin Media. Weare reliant upon the support of Virgin Media to continue our operations. As of March 31, 2007, we hadconsolidated current liabilities of $70.8 million due to Virgin Media groupcompanies compared with $71.2 million as of December 31, 2006.

Historically, our source of cash has been the netproceeds of our offerings of limited partnership interests and our principaluses of cash have been capital contributions to NTL South Herts in order tofund our proportionate share of the construction costs of the South HertsSystem.

Accordingly, until such time as NTL South Herts beginsto pay dividends on its ordinary shares (which is not expected in theforeseeable future), we will be required to fund our administrative expensesfrom borrowings or, theoretically, additional issuances of limited partnershipinterests. It is unlikely that we will be able to sell debt or equitysecurities in the public markets, at least in the short term, or to obtainfinancing from commercial banks. Accordingly, we are dependent on Virgin Mediafor funds to cover operating expenses, and will continue to be dependent uponVirgin Media to meet our liquidity requirements for the foreseeable future. Weexpect that cash from our operations in 2007 will be utilized fully for thepurchase of fixed assets including customer installations.

**Off-Balance SheetTransactions**

As of March 31, 2007, we had no off-balance sheettransactions.

**Contractual Obligationsand Commercial Commitments**

There have been no material changes in the threemonths ended March 31, 2007 to the information required under this Item fromwhat was disclosed in our Annual Report on Form 10-K for the year endedDecember 31, 2006 as filed with the SEC on March 29, 2007.

**Item 3.**                          Quantitativeand Qualitative Disclosures About Market Risk

Our functionalcurrency is pounds sterling and all of our revenue and substantially all of ourcosts are incurred in pounds sterling. We report in U.S. dollars. Therefore, weare exposed to fluctuations in the pound sterling to U.S. dollar exchange rate.

Our aggregatepotential loss from a hypothetical one-percent fall in the pound sterling /U.S. dollar exchange rate is approximately $2,000 for the three months ended March 31,2007.

We have no debtother than amounts due to affiliates. As of March 31, 2007, we hadapproximately $70.8 million in amounts due to Virgin Media of which $65.7million incurs interest charges. Interest on amounts due to affiliates is at avariable rate based on the average rate incurred by Virgin Media. Therefore weare exposed to changes in Virgin Media’s borrowing rate. Our aggregatepotential loss from a hypothetical one-percentage point increase in theinterest rate is $164,250 for the three months ended March 31, 2007.

**Item 4.**                          Controlsand Procedures

(a)*   DisclosureControls and Procedures.*   Our management, with theparticipation of the Chief Executive Officer and Chief Financial Officer ofVirgin Media*, has evaluated theeffectiveness of our disclosure controls and procedures (as such term isdefined in Rules 13a-15(e) and 15d-15(e) under theSecurities Exchange Act of 1934, as amended, or the Exchange Act) as of the endof the period covered by this report. Based on such evaluation, Virgin Media’sChief Executive Officer and Chief Financial Officer have concluded that, as ofthe end of such period, these controls and procedures are effective to ensurethat information required to be disclosed by the registrant in the reports theregistrant files or submits under the Exchange Act is recorded, processed, summarized,and reported within the time periods specified in the SEC’s rules andforms. These disclosure controls and procedures include, without limitation,controls and procedures designed to ensure that information required to bedisclosed by the registrant in the reports that it files or submits isaccumulated and communicated to the registrant’s management, including VirginMedia’s Chief Executive Officer and Chief Financial Officer, as appropriate toallow timely decisions regarding required disclosure.

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*                    ThePartnership has no Chief Executive Officer or Chief Financial Officer. RobertMackenzie and Robert Gale are Directors of Virgin Media Directors Limited,which is a Corporate Director of NTL Fawnspring Limited, the General Partner ofthe Partnership.

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(b)*   Changesin Internal Control Over Financial Reporting.  **On March 3, 2006, Virgin Mediacompleted the reverse acquisition of Telewest and on July 4, 2006, VirginMedia completed the acquisition of Virgin Mobile. As a consequence of VirginMedia’s integration of these acquisitions, Virgin Media has made and expects tomake material changes to its internal control over financial reporting. Otherthan as stated above, there were no changes in our internal control overfinancial reporting (as such term is defined in Rules 13a-15(f)and 15d-15(f) under the Exchange Act) during the fiscal quarter to whichthis report relates that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting.*

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**PART II.  OTHER INFORMATION**

**ITEM 1.**                    LEGALPROCEEDINGS

We are involved in disputes and litigation arising inthe ordinary course of our business. We have no material legal proceedingoutside of the ordinary course of business.

**ITEM 1A:**          RISK FACTORS

There have been no material changes in the threemonths ended March 31, 2007 in the risk factors discussed under “Risk Factors”and elsewhere in our Form 10-K for the year ended December 31, 2006 as filedwith the SEC on March 29, 2007.

**ITEM 2.**                    UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

**ITEM 3.**                    DEFAULTS UPONSENIOR SECURITIES

None.

**ITEM 4.**                    SUBMISSION OFMATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our security holdersin the quarter ended March 31, 2007.

**ITEM 5.**                    OtherInformation

None.

**ITEM 6.**                    Exhibits
| 3.1    |   | Certificate  of Limited Partnership dated December 31, 1991 (Incorporated by  reference to Exhibit 3.1 to the Registrant’s Form 10-K for the year  ended December 31, 1994, filed with the Securities and Exchange  Commission on March 31, 1995, File No. 000-19889).                    |   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |                                                                                                                                                                                                                                                                                                                         |   |
| 3.2    |   | Amendment  to the Certificate of Limited Partnership dated January 31, 1995  (Incorporated by reference to Exhibit 3.2 to the Registrant’s  Form 10-K for the year ended December 31, 1994, filed with the  Securities and Exchange Commission on March 31, 1995, File  No. 000-19889).   |   |
|   |   |                                                                                                                                                                                                                                                                                                                         |   |
| 4.1    |   | Limited  Partnership Agreement dated December 31, 1991 (Incorporated by reference  to the Registrant’s Post-Effective Amendment No. 2 to Form S-1,  filed with the Securities and Exchange Commission on May 6, 1993, File  No. 33-48400).                                                     |   |
|   |   |                                                                                                                                                                                                                                                                                                                         |   |
| 4.2    |   | Amendment  No. 1 to Limited Partnership Agreement dated October 20, 1992  (Incorporated by reference to Exhibit 4.2 to the Registrant’s  Form 10-K for the year ended December 31, 1994, filed with the  Securities and Exchange Commission on March 31, 1995, File  No. 000-19889). |   |
|   |   |                                                                                                                                                                                                                                                                                                                         |   |
| 31.1   |   | Certification  of Chief Executive Officer,* pursuant to Rule 13(a)-14(a) and  Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                        |   |
|   |   |                                                                                                                                                                                                                                                                                                                         |   |
| 31.2   |   | Certification  of Chief Financial Officer,* pursuant to Rule 13(a)-14(a) and  Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                        |   |
|   |   |                                                                                                                                                                                                                                                                                                                         |   |
| 32.1   |   | Certifications of Chief  Executive Officer,* and Chief Financial Officer,**pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.                                                                                                                             |   |

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*                    ThePartnership has no Chief Executive Officer or Chief Financial Officer. RobertMackenzie and Robert Gale are Directors of Virgin Media Directors Limited,which is a Corporate Director of NTL Fawnspring Limited, the General Partner ofthe Partnership.

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**SIGNATURES**

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.
|        | SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD. |
|--------|----------------------------------------------------|
|   |                                               | a Colorado limited partnership |
|   |                                               |   |
|   | By:                                                | NTL Fawnspring Limited,  its General Partner |
|   |                                               |   |
|   | By:                                                | /s/ ROBERT  MACKENZIE |
|   |                                               | Robert Mackenzie |
|   |                                               | Director of Virgin Media Directors Limited,  Corporate Director of NTL Fawnspring Limited,  the General Partner of South Hertfordshire  United Kingdom Fund, Ltd. |

 

Dated:   May 14, 2007

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.
| Name                 | ** ** | **Title**                                                                                                              | ** ** | **Date**           | ** ** |
|----------------------|------------|------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|
|                 |       |                                                                                                                   |       |               |       |
| /s/ ROBERT MACKENZIE |       | Director  of Virgin Media Directors Limited,                                                                           |       | May  14, 2007      |       |
| Robert Mackenzie     |       | Corporate  Director of NTL Fawnspring Limited,  the General Partner of South Hertfordshire  United Kingdom Fund, Ltd.* |       |               |       |
|                 |       |                                                                                                                   |       |               |       |
| /s/ ROBERT GALE      |       | Director  of Virgin Media Directors Limited,                                                                           |       | May 14,  2007 |       |
| Robert Gale          |       | Corporate Director of  NTL Fawnspring Limited,  the General Partner of South Hertfordshire  United Kingdom Fund, Ltd.* |       |               |       |

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*                    ThePartnership has no Chief Executive Officer or Chief Financial Officer. RobertMackenzie and Robert Gale are Directors of Virgin Media Directors Limited,which is a Corporate Director of NTL Fawnspring Limited, the General Partner ofthe Partnership.

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