Interim Results - CORRECTION
The following announcement replaces an original submission forwarded to the market
at 13:42 on August 15th 2003.
The original submission was made public under the company name Fidelity Investments
International and did not properly populate into search pages for Fidelity Japanese
Values. This has now been rectified. The original release text is unamended.
* * * * * * * * * * * * * * * * * * * * * * * * *
FIDELITY JAPANESE VALUES PLC
Preliminary Announcement of Unaudited Interim Results for the six months ended
30 June 2003
INTERIM REPORT
Performance
During the first three months of this half-year period, stock markets in Japan
declined in the wake of the war in Iraq, of new nuclear threats from North
Korea and of the emergence of SARS in East Asia; however in the last three
months the stock markets recovered quite significantly following the lead from
Wall Street.
It is pleasing to note a rise in the net asset value of 2.2p per share or 5.2%
to 45.04p per share which is most welcome after a period of declining values.
The bare statistics are shown in the table below:
Jan - Mar 2003 Apr - Jun 2003 1st Half 2003
Gross Assets Less Current -4.1% +7.1% +2.7%
Liabilities
Net Asset Value -6.5% +12.5% +5.2%
Benchmark -1.5% +9.2% +7.6%
During the half-year period the markets contributed circa 5p to the performance
and the gearing added another c1.1p but the stock selection and the currency
reduced these gains by c2.2p and c1.6p respectively.
The Company's own performance followed the trends of the markets but
regrettably did not match that of the new benchmark index that was adopted last
year - the Russell Nomura Mid-Small Index. As is usually the case in such
circumstances there were parts of the benchmark index that are not represented
in the portfolio - particularly the low priced, less liquid stocks - which did
well whereas the slightly larger mid-cap stocks typical of the portfolio did
rather less well.
During the six months the top twenty holdings - the prospects for which were
highlighted in the Chairman's statement in the annual report - were largely
unchanged with two new holdings introduced - Nissen and Riso Kagaku - although
there were other new names in the list representing holdings which were already
held but lower down the year end portfolio list. The manager continues to have
confidence in the earnings growth for these companies and indeed for the other
companies represented lower down the portfolio list. The recent market rally
mirrors a recovery in corporate earnings and profit margins, which was largely
due to cost-cutting efforts by individual companies. Given the tiny profit
margins on which Japanese companies operate this could lead to a considerable
increase in corporate profits and such speculation has helped fuel the market
rebound.
The Market and its Outlook
Despite the recent stock market rally, there is little evidence to suggest the
re-emergence of sustained economic growth in the near future. Export growth
remains weak, consumption continues to deteriorate and corporate capital
investment is still trending lower. Furthermore the prospects of the necessary
reforms, particularly in the banking sector, are as elusive as ever.
Although the outlook for the Japanese economy and stock markets remain
uncertain, there are reasons to be rather more encouraged at the corporate
level. There is an increasing number of companies in Japan that are undergoing
restructuring. Substantial cost-cutting at Japanese companies helped to
produce a 26% rise in operating profits for the year ended March 2003, even
though sales remained flat. Furthermore an increasing number of companies are
now shifting their focus from cost-cutting to managing for growth and starting
to take commercial risks. Cost restraints alone may not serve to enhance a
company's prospects, whereas corporate investment, such as capital expenditure,
mergers & acquisitions and research & development all could provide stimulants
to growth - all of which is beginning to happen.
Recent developments at the corporate level, referred to above, has led to an
increasing number of investment opportunities emerging at attractive prices.
Nevertheless the key to success will continue to lie in careful stock picking;
the Manager continues to look for reasonably valued shares of companies whose
increasing competitive strength can be expected to sustain their earnings
growth over the longer term. Indeed we believes that those companies whose
shares make up the Company's portfolio are examples of such investment
opportunities and that therefore - in time - the Company's net asset value
should benefit from their progress.
By order of the Board
Fidelity Investments International
15 August 2003
Enquiries: Barbara Powley - Fidelity Investments International 01737 836883
FIDELITY JAPANESE VALUES PLC
Statement of Total Return (incorporating the revenue account)
For the six months ended 30 June 2003
for the six months for the year ended for the six months
ended ended
31.12.02
30.06.03 30.06.02
audited
unaudited unaudited
revenue capital total Revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/ - 2,064 2,064 - (9,805) (9,805) - 8,077 8,077
(losses) on
investments
Income - 389 - 389 677 - 677 411 - 411
dividends
- interest 4 - 4 6 - 6 3 - 3
Investment (287) - (287) (657) - (657) (371) - (371)
management
fee
Other (115) - (115) (204) - (204) (70) - (70)
expenses
Exchange - (267) (267) - (61) (61) - 110 110
(losses)/
gains
Net (loss)/ (9) 1,797 1,788 (178) (9,866) (10,044) (27) 8,187 8,160
return
before
finance
costs and
taxation
Exchange - 572 572 - 150 150 - (753) (753)
gains/
(losses) on
loans
Interest (140) - (140) (384) - (384) (194) - (194)
payable
(Loss)/ (149) 2,369 2,220 (562) (9,716) (10,278) (221) 7,434 7,213
return on
ordinary
activities
before
taxation
Tax on (39) - (39) (119) - (119) (64) - (64)
ordinary
activities
(Loss)/ (188) 2,369 2,181 (681) (9,716) (10,397) (285) 7,434 7,149
return on
ordinary
activities
after tax
for the
period,
attributable
to equity
shareholders
(Loss)/
return per
ordinary
share
Basic (0.19p) 2.41p 2.22p (0.69p) (9.83p) (10.52p) (0.28p) 7.40p 7.12p
Fully (0.16p) 2.01p 1.85p - - - (0.24p) 6.17p 5.93p
diluted
These accounts have been prepared in accordance with the AITC Statement of
Recommended Practice (SORP) issued in January 2003.
FIDELITY JAPANESE VALUES PLC
Balance Sheet
As at 30 June 2003
30.06.03 31.12.02 30.06.02
audited unaudited
unaudited
£'000 £'000 £'000
Fixed assets
Investments 54,795 55,492 74,419
Current assets
Debtors 292 548 250
Cash at bank 5,867 2,921 3,169
6,159 3,469 3,419
Creditors - amounts falling
due within one year
Fixed rate unsecured loan - - (8,228)
Other creditors (672) (288) (790)
(672) (288) (9,018)
Net current assets / 5,487 3,181 (5,599)
(liabilities)
Total assets less current 60,282 58,673 68,820
liabilities
Creditors - amounts falling
due after more than one year
Fixed rate unsecured loans (16,048) (16,620) (9,221)
Total net assets 44,234 42,053 59,599
Capital and reserves
Called up share capital 24,551 24,551 24,551
Capital redemption reserve 1,780 1,780 1,780
Share premium account 40 40 40
Other reserves
Other reserve 60,369 60,639 60,369
Warrant exercise reserve 2 2 2
Warrant reserve 10,198 10,198 10,198
Capital reserve - realised (12,277) (7,193) (183)
Capital reserve - unrealised (31,550) (39,003) (28,863)
Revenue reserve (8,879) (8,691) (8,295)
Total equity shareholders' 44,234 42,053 59,599
funds
Net asset value per ordinary
share
Basic 45.04p 42.82p 60.69p
FIDELITY JAPANESE VALUES PLC
Cash Flow Statement
For the six months ended 30 June 2003
30.06.03 31.12.02 30.06.02
unaudited audited unaudited
£'000 £'000 £'000
Operating activities
Investment income 342 557 341
received
Deposit interest 4 6 3
received
Investment management (284) (712) (350)
fee paid
Directors' fees paid (24) (54) (38)
Other cash payments (84) (237) (200)
Net cash outflow from (46) (440) (244)
operating activities
Returns on investments
and servicing of
finance
Interest paid (141) (389) (187)
Net cash outflow from (141) (389) (187)
returns on investments
and servicing of
finance
Financial investment
Purchase of (8,026) (16,682) (5,206)
investments
Exchange (losses)/ (34) (377) 5
gains
Disposals of 11,427 20,409 8,686
investments
Net cash inflow/ 3,367 3,350 3,485
(outflow) from
financial investment
Net cash inflow/ 3,180 2,521 3,054
(outflow) before
financing
Financing
Repurchase of ordinary - (1,470) (1,470)
shares
1.05% fixed rate - 8,300 -
unsecured loan drawn
down
2.16% fixed rate - (8,226)
unsecured loan repaid
Net cash outflow from - (1,396) (1,470)
financing
Increase in cash 3,180 1,125 1,584
The results for the six months to 30 June 2003 and 30 June 2002, which are
unaudited, constitute non-statutory accounts within the meaning of s240 of the
Companies Act 1985. The figures and financial information for the year ended
31 December 2002 have been extracted from the latest published accounts of the
Company and do not constitute the statutory accounts for that year. Those
accounts have been delivered to the Registrar of Companies and included the
report of the auditors, which was unqualified and did not contain a statement
under either sections 237(2) or 237(3) of the Companies Act 1985.
Copies of the interim report will be posted to shareholders as soon as
practicable. Copies will also be available to the public at the Company's
registered office Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey
KT20 6RP.