Half-yearly Report
FIDELITY SPECIAL VALUES PLC
AVAILABILITY OF THE HALF-YEARLY REPORT FOR THE SIX MONTHS TO 28 FEBRUARY 2011
Further to the disclosure of the Company's Half-Yearly report for the six
months ended 28 February 2011 by way of an announcement dated 20 April 2011, in
accordance with Disclosure and Transparency Rules 4.2 and 6.3.5 (the "Rules")
this announcement contains the text of the announcement dated 20 April 2011
together with detail on the availability of the printed form of the report in
compliance with the Rules.
The Company's Half-Yearly report for the six months ended 28 February 2011 has
been submitted to the UK Listing Authority, and will shortly be available for
inspection on the National Storage Mechanism (NSM):
www.hemscott.com/nsm.do
(Documents will usually be available for inspection within two business days of
this notice being given)
The Half-Yearly report will shortly be available on the Company's website at
www.fidelity.co.uk/static/pdf/common/investment-trusts/special/half-yearly-report.pdf
Rebecca Burtonwood
FIL Investments International
Company Secretary
5 May 2011
01737 836 869
Fidelity Special Values PLC
Preliminary announcement of unaudited Half-Yearly results for the six months
ended 28 February 2011.
Contents
Objective and Highlights
Summary of Results
Chairman's Statement
Manager's Half-Yearly Review
Responsibility Statement
Twenty Largest Investment Exposures
Financial Statements
Investor Information
Directory
Warning to Shareholders -"Boiler Room" Scams
Objective and Highlights
To achieve long term capital growth from an actively managed portfolio of
special situation investments, consisting primarily of securities listed or
traded on the London Stock Exchange.
Returns (%)
From launch on
Six months to 17 November 1994
28 February to 28 February
2011 2011
Capital Returns
Net Asset Value (NAV) per share +9.9 +576.4
Share price +9.4 +510.8
FTSE All-Share Index +15.2 +100.0
Total Returns1
NAV per share +11.8 +707.6
Share price +11.6 +640.6
FTSE All-Share Index +16.5 +233.5
1 Total returns include reinvested income
Total Annual Returns1 (%)
01/03/ 01/03/ 01/03/ 01/03/ 01/03/
10 09 08 07 06
to to to to to
28/02/ 28/02/ 28/02/ 29/02/ 28/02/
11 10 09 08 07
NAV per share +14.9 +54.2 -31.0 -2.8 +11.5
Share price +13.0 +54.1 -29.6 -7.5 +8.4
FTSE All-Share Index +17.0 +47.3 -33.0 -2.7 +11.6
1 Total returns include reinvested income
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
Summary of Results
28 February 31 August % change
2011 2010
Assets
Total assets employed1 £366.77m £333.78m +9.9
Shareholders' funds £366.77m £333.78m +9.9
NAV per share 644.14p 586.21p +9.9
Number of ordinary shares in issue 56,938,896 56,938,896
Stock market data
FTSE All-Share Index 3,106.58 2,696.72 +15.2
Share price at period end 580.00p 530.00p +9.4
high 595.00p 585.00p
low 530.00p 502.50p
Discount at period end (10.0)% (9.6)%
(Discount) low/premium high (6.5)% 0.4%
Discount high (10.4)% (12.3)%
Returns for the six months to end 2011 2010
February
Revenue return per ordinary share 3.42p 2.71p
Capital return/(loss) per ordinary 65.01p (10.98p)
share
Total return/(loss) per ordinary share 68.43p (8.27p)
1 Total assets less current liabilities
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
Chairman's Statement
SIX MONTH RETURNS TO 28 FEBRUARY 2011 (TOTAL RETURNS)
NAV: 644.14P PER SHARE (+11.8%) SHARE PRICE: 580.00P PER SHARE (+11.6%)
BENCHMARK INDEX: 3,106.58 (+16.5%)
The NAV and share price posted positive returns during the six months under
review (11.8% and 11.6% respectively), although this was below the return from
the overall UK equity market, which rose by 16.5% (FTSE All-Share Index, total
returns).
In the Manager's Review, which follows, Sanjeev Shah explains why he has chosen
to invest in, or avoid, particular sectors and how these views have contributed
towards performance. The Board supports Sanjeev's approach to identifying
fundamental value and his consequent avoidance of some areas of the market,
like commodities, which he assesses to be fundamentally overvalued. Although,
in the short term, this has led to performance being below that of the Index,
the objective of the Company is to achieve good long term performance. In
particular, we look at the five year returns, where the NAV and share price
performance has provided shareholders with positive returns (although the
latter is slightly below the Index) as the total returns table shows. The three
year returns are also relevant as Sanjeev has been managing the portfolio since
the beginning of 2008. Both the NAV and share price returns are positive and
above the Index for this period.
Since
Total returns (%) 3 years 5 years launch
NAV +22.2 +32.5 +707.6
Share price +22.7 +22.9 +640.6
Index +15.6 +25.6 +233.5
The attribution of the Company's return for the latest six months is detailed
in the table below.
Pence
NAV @ 31 August 2010 586.21
Impact of index (ungeared) 96.87
Impact of equities -25.38
Impact of derivatives 0.61
Operational costs -3.42
Dividend paid -10.50
Currency -0.03
Residual -0.22
NAV @ 28 February 2011 644.14
BOARD APPOINTMENTS
Following my appointment as Chairman on 9 July 2010 and a transitional handover
period, Sharon Brown was appointed as Audit Committee Chairman on 26 October
2010.
SHARE REPURCHASES
Following the end of the period under review, the Company's discount widened to
slightly over 10%. The Board believed this to be too high and therefore took
the opportunity to repurchase 115,000 ordinary shares for cancellation. Such
repurchases will be carried out when deemed necessary and will only take place
when the resulting NAV per share increases for the remaining shareholders.
OUTLOOK
Although the Company mainly invests in UK stocks, this does not protect it from
the continued impact of the multitude of world events: shareholder and market
concerns due to the situation in Libya and the Arab world; the earthquake,
tsunami and nuclear problems in Japan; and, closer to home, the impacts of the
UK coalition government's deficit reduction measures and Eurozone sovereign
debt crisis. Against the backdrop of all these uncertainties, Sanjeev continues
to focus investments in those companies where he recognises a valuation
anomaly. The Board believes that this approach will continue to serve the
Company well over the medium and long term.
Lynn Ruddick
Chairman
19 April 2011
Manager's Half-Yearly Review
HALF-YEARLY RETURNS:
NAV: +11.8% to 644.14p per share; Share price: +11.6% to 580.00p; Benchmark
FTSE All-Share Index: +16.5% (All figures on a total return basis)
The six months under review produced positive gains for shareholders, although
both the NAV and share price increased by less than the FTSE All-Share Index.
This Half-Yearly Review covers the factors behind the performance of the net
asset value, and outlines the portfolio's positioning going into the second
half of the Company's year.
STOCK MARKET REVIEW
The UK stock market continued to rise strongly from the outset of our new
financial year, buoyed by increasing investor confidence as a result of several
factors. These included the continuation of low interest rates, anticipation of
further quantitative easing in the US and strong economic growth in developing
economies such as China which are important for UK exporters. The market
largely ignored the potential impact of the UK coalition government's deficit
reduction measures, and even a second leg of the Eurozone sovereign debt crisis
resulting in November's Irish bailout failed to cause more than a short term
downward blip in the Benchmark's rise. In the meantime, investor sentiment was
given a further boost when the publication of GDP figures for the calendar
quarter July to September suggested the UK economy was growing at a much higher
rate than expected. Even the associated nervousness about possible interest
rate rises would not dampen enthusiasm. Mining stocks listed in the UK proved
unstintingly popular, their attraction to investors driven by optimism that
global demand for commodities would keep growing from developing economies
including China. However, share prices of banks were hurt by the Eurozone debt
concerns.
Total return performance for the six months to
28 February 2011
Sources: Fidelity and Datastream
Towards the end of the half year period, a number of factors combined to cool
investor sentiment. Economic data released in January indicated the UK economy
had shrunk by 0.5% in the final three months of 2010. It became clear that
China would take action on its interest rates in order to manage the rate of
economic growth within a range conducive to controlling inflation. The oil
price spiked sharply, not least in response to a wave of instability amongst
regimes either within or close to oil producing countries. Back in the UK, it
became increasingly evident to people that the economy might be in for a tough
couple of years. That evidence took the form of a stubbornly high inflation
rate, an increase in the number of people unemployed, greater recognition of
the impact of tax increases and a realisation that any raising of interest
rates to counter inflation would create a risk to the economy.
PORTFOLIO REVIEW
My style is contrarian, focussing in particular on significant valuation
anomalies in sectors and shares which are unloved and underowned by other
institutions.
I consequently continue to have virtually no exposure to commodity related
areas such as mining stocks, with the only exception being the position in BP
which I bought during the Macondo well crisis. Mining stocks are trading at 50
year highs on some valuation measures and I have a more negative view than the
consensus on the demand and supply environment for a number of base metals.
China today represents over 50% of the end demand for several commodities and
any slowing of demand for infrastructure development will have a significant
negative impact on commodity prices. The underweight in mining was the largest
detractor to performance over the half year. However, I have strong conviction
that I do not want exposure to this space.
I continue to be strongly overweight in financial stocks in the portfolio
including banks and non-banks. Post the crisis, the valuation of financials is
very attractive on a historic relative price to book basis, and financials
continue to be significantly underowned by institutional investors - a good
stock picking environment for contrarian value investors. During the half year,
banks such as Lloyds detracted from performance largely as a result of
regulatory concerns and questions over the long term returns that can be
achieved by banks in the new environment. I continue to believe that this is
the time to be owning good retail banking franchises and have added to my
position in banks as a result. Within the broader financials space including
real estate, British Land and Land Securities have been significant positions
in the portfolio as I felt the yield credentials of property and the rental
outlook in areas such as the City of London were being overlooked. Both these
stocks contributed to performance in the half year and I have scaled back my
exposure as a result. London Stock Exchange, a top 10 stock position, announced
a potential tie up with the Toronto Stock Exchange and delivered strong
performance during the period.
I continue to have a strong position in technology and internet related names.
This is despite the technology sector not being a typical contrarian idea.
However in a low economic growth environment, the cash generative growth
characteristics of technology companies should command a premium valuation. The
3 themes I am exposed to are names benefiting from a recovery in corporate
capital expenditure such as Logica, companies benefiting from the growth of
mobile data such as Vodafone, and finally companies such as Ocado benefiting
from the internet transforming business models. Logica and Ocado were strong
contributors to performance over the half year. Distributors such as Premier
Farnell, whose business models have been transformed by the internet, also
contributed to performance.
I continue to have a large exposure to media related names in the portfolio
given the valuations are looking attractive from an historical context. Names
such as ITV have contributed strongly to performance given the cyclical
recovery in TV advertising, and I have used the strength in cyclically exposed
media names to reduce their weighting in the portfolio. Yell has been a costly
mistake in terms of performance, including this half year. This has been
attributable to the lack of recovery in the advertising spending intentions of
small and medium sized businesses in this downturn, the difficult transition
away from physical directory books, and Yell's geared balance sheet. Yell is a
materially smaller position in the portfolio and I continue to believe there is
long term value that can be unlocked under the new management team.
During the half year, online gaming stocks detracted from performance due to
concerns over regulatory costs and competition. I have used the weakness in
PartyGaming to add to my position. I continue to believe online gaming stocks
will benefit from the structural growth of the internet and improving
visibility around regulation in the US and EU. Xchanging in the support
services space was a negative contributor to performance due to problems at an
acquired company, Cambridge, and to concerns over cashflow. Having been through
issues with the new interim CEO, I believe the stock price reaction is overdone
and have added to my position.
Derivatives
I continued to use Contracts For Difference ("CFDs") for the purpose of
gearing, as a cheaper alternative to conventional borrowing. As with borrowing,
the use of CFDs in this way will magnify the direction of underlying share
prices, one way or the other. I am also able to seek to derive performance from
shares that I consider to be overvalued and likely to fall over time, and I
continued to use CFDs for this purpose too. Although the latter strategy
detracted from performance during the review period, the positive contribution
provided by gearing meant that the use of CFDs added value in total.
OUTLOOK
I continue to believe the UK economy will see a slow economic growth
environment for the foreseeable future, but I am not a believer in a double dip
recession scenario. However, there is a risk that the market begins to
extrapolate what has been a sharp recovery from an economic abyss, into the
future. In fact as a result of the strong cyclical recovery, higher growth
companies were trading at similar valuations to their lower growth counterparts
at the start of 2011. As a result I have been increasing my exposure to quality
growth companies and reducing the consumer cyclical exposure in the portfolio.
For example I have been adding to my position in GlaxoSmithKline. Even taking
into account concerns over patent expiries, lack of new products, and
regulatory risks I believe pharmaceutical companies offer compelling value but
it will be contingent on the respective management teams unlocking that value
through perhaps more radical measures.
I continue to have strong exposure to financials given the attractive
valuations and have recently increased my exposure to Lloyds, RBS and Aviva.
Meanwhile I have used the strength in property companies to reduce the exposure
there. I continue to be very comfortable with my lack of exposure in commodity
and industrial cyclical related areas and this is unlikely to change in the
short term. The fund has benefited from M&A activity in top 10 positions such
as BSkyB and London Stock Exchange. M&A activity is likely to increase and I
continue to search out names which may be attractive targets for corporate
activity.
The portfolio has always taken a bottom up stock picking approach, and I firmly
believe that with the increasing uncertainty likely to be created by UK
economic data and recent geopolitical events, a stock picking investment style
is going to be essential in generating good returns. I favour stocks which are
valuation anomalies, which are unfashionable amongst brokers' analysts and
which are under owned by mainstream investment institutions. Those
opportunities are still available in the UK market, and I believe the recent
increase in the level of investor uncertainty is itself likely to create an
investment environment which can favour a stock picking investor such as
myself.
Sanjeev Shah
Portfolio Manager
PRINCIPAL RISKS AND UNCERTAINTIES
The Board believes that the principal risks and uncertainties faced by the
Company continue to fall into two broad categories. The first, external risks,
being stock market, share price and discount and the second, internal risks,
being portfolio and governance, operational, financial, compliance,
administration etc. Information on each of these is given in the Business
Review section of the Annual Report for the year ended 31 August 2010.
By order of the Board
FIL Investments International
19 April 2011
Responsibility Statement
The Directors confirm to the best of their knowledge that:
a) the condensed set of financial statements contained within the Half-Yearly
financial report has been prepared in accordance with the UK Accounting
Standards Board's Statement `Half-Yearly Financial Reports';
b) the Chairman's Statement and Manager's Half-Yearly Review of the Half-Yearly
report narrative on pages 3 to 8 (constituting the interim management report)
includes a fair review of the information required by Rule 4.2.7R of the FSA's
Disclosure and Transparency Rules and their impact on the condensed set of
financial statements and a description of the principal risks and uncertainties
for the remaining six months of the financial year; and
c) in accordance with Disclosure and Transparency Rule 4.2.8R there have been
no related parties transactions during the six months to 28 February 2011 and
therefore nothing to report on any material effect by such a transaction on the
financial position or the performance of the Company during that period; and
there have been no changes in this position since the last Annual Report that
could have a material effect on the financial position or performance of the
Company in the first six months of the current financial year.
The Half-Yearly financial report has not been audited or reviewed by the
Company's Independent Auditor.
The Half-Yearly financial report was approved by the Board on 19 April 2011 and
the above responsibility statement was signed on its behalf by Lynn Ruddick,
Chairman.
Twenty Largest Investment Exposures as at 28 February 2011
Exposure Fair
Value2
Investments including derivatives £'000 £'000 %1
HSBC 26,188 26,188 6.9
Banking and financial services
Vodafone 22,862 22,862 6.0
Mobile telecommunications
GlaxoSmithKline 19,972 19,972 5.3
Pharmaceuticals
Lloyds Banking Group 18,924 18,924 5.0
Banking and financial services
British Sky Broadcasting 18,658 18,658 4.9
Broadcasting
BP 13,849 13,849 3.6
International oil and gas
AstraZeneca 12,598 12,598 3.3
Pharmaceuticals
London Stock Exchange 11,421 11,421 3.0
United Kingdom's primary stock exchange
Ericsson 10,907 2,498 2.9
Global telecommunications equipment and related
services
J Sainsbury 10,015 10,015 2.6
Grocery and related retailing and financial services
Aviva 9,584 9,584 2.5
Global financial services
British Land 9,318 9,318 2.5
Property
Logica 8,704 8,704 2.3
Information technology consulting services
Kingfisher 8,239 8,239 2.2
International home improvement retailer
Royal Bank of Scotland 7,937 7,937 2.1
Global financial services
Wolters Kluwer 7,385 633 1.9
Global information services and publishing
ITV 7,245 7,245 1.9
Media
Citigroup 7,039 3,302 1.9
Global diversified financial services
Land Securities 6,404 6,404 1.7
Real estate investment trust
PartyGaming 5,979 5,979 1.5
Online gaming
Twenty largest investments including derivatives 243,228 224,330 64.0
1 % based on total exposure which is the fixed asset investments and options at
fair value plus the fair value of the underlying securities within the CFD
contracts
2 Fair value is measured as:
- Listed and AIM quoted investments are valued at bid prices where available
otherwise, at published price quotations
- Unlisted investments are valued using an appropriate valuation technique in
the absence of an active market
- Options are valued at the quoted trade price for the contract
- CFDs - the difference between the settlement price and the value of the
underlying shares in the contract (unrealised gains/(losses))
Income Statement
for the six months for the year ended for the six months ended
ended 31 August 2010 28 February 2010
28 February 2011 audited unaudited
unaudited
revenue capital total revenue capital total revenue capital total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) - 35,458 35,458 - 3,613 3,613 - (922) (922)
on investments
designated at
fair value
through profit
or loss
Gains/(losses) - 1,543 1,543 - (5,219) (5,219) - (5,189) (5,189)
on derivative
instruments
held at fair
value through
profit or loss
Income 2 4,296 - 4,296 10,605 - 10,605 4,151 - 4,151
Net derivative 3 (174) - (174) 261 - 261 54 - 54
(expenses)/
income
Investment (1,906) - (1,906) (3,515) - (3,515) (1,730) - (1,730)
management fee
Other expenses (268) - (268) (587) - (587) (315) - (315)
Exchange gains/ - 16 16 (4) (117) (121) (5) (141) (146)
(losses) on
other net
assets
Net return/ 1,948 37,017 38,965 6,760 (1,723) 5,037 2,155 (6,252) (4,097)
(loss) before
finance costs
and taxation
Interest paid - - - (591) - (591) (591) - (591)
on bank loans
Net return/ 1,948 37,017 38,965 6,169 (1,723) 4,446 1,564 (6,252) (4,688)
(loss) on
ordinary
activities
before taxation
Taxation on 4 - - - (56) - (56) (22) - (22)
return/(loss)
on ordinary
activities
Net return/ 1,948 37,017 38,965 6,113 (1,723) 4,390 1,542 (6,252) (4,710)
(loss) on
ordinary
activities
after taxation
for the period
Return/(loss) 5 3.42p 65.01p 68.43p 10.74p (3.03p) 7.71p 2.71p (10.98p) (8.27p)
per ordinary
share
A Statement of Total Recognised Gains and Losses has not been prepared as there
are no gains and losses other than those reported in this Income Statement.
The total column of this Income Statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the period.
These financial statements have been prepared in accordance with the AIC
Statement of Recommended Practice ("SORP") issued in January 2009.
Reconciliation of Movements in Shareholders' Funds
share capital other non-
share premium redemption distributable capital revenue total
capital account reserve reserve reserve reserve equity
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening shareholders' 14,234 95,767 2,554 5,152 210,488 6,323 334,518
funds: 1 September
2009
Net recognised - - - - (6,252) - (6,252)
capital losses for
the period
Net revenue return - - - - - 1,542 1,542
after taxation for
the period
Dividend paid to 6 - - - - - (5,125) (5,125)
shareholders
Closing shareholders' 14,234 95,767 2,554 5,152 204,236 2,740 324,683
funds: 28 February
2010
Opening shareholders' 14,234 95,767 2,554 5,152 210,488 6,323 334,518
funds: 1 September
2009
Net recognised - - - - (1,723) - (1,723)
capital losses for
the year
Net revenue return - - - - - 6,113 6,113
after taxation for
the year
Dividend paid to 6 - - - - - (5,125) (5,125)
shareholders
Closing shareholders' 14,234 95,767 2,554 5,152 208,765 7,311 333,783
funds: 31 August 2010
Net recognised - - - - 37,017 - 37,017
capital gains for the
period
Net revenue return - - - - - 1,948 1,948
after taxation for
the period
Dividend paid to 6 - - - - - (5,979) (5,979)
shareholder
Closing shareholders' 14,234 95,767 2,554 5,152 245,782 3,280 366,769
funds: 28 February
2011
Balance Sheet
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
Note £'000 £'000 £'000
Fixed assets
Investments designated at fair value 353,545 323,663 318,651
through profit or loss
Current assets
Derivative assets held at fair value 3,669 1,995 1,934
through profit or loss
Debtors 3,644 2,451 3,659
Amounts held at futures clearing houses 2,302 2,470 2,395
Cash at bank 10,408 11,165 3,460
20,023 18,081 11,448
Creditors - amounts falling due within
one year
Derivative liabilities held at fair (5,253) (4,180) (3,568)
value through profit or loss
Other creditors (1,546) (3,781) (1,848)
(6,799) (7,961) (5,416)
Net current assets 13,224 10,120 6,032
Total net assets 366,769 333,783 324,683
Capital and reserves
Share capital 14,234 14,234 14,234
Share premium account 95,767 95,767 95,767
Capital redemption reserve 2,554 2,554 2,554
Other non-distributable reserve 5,152 5,152 5,152
Capital reserve 245,782 208,765 204,236
Revenue reserve 3,280 7,311 2,740
Total equity shareholders' funds 366,769 333,783 324,683
Net asset value per ordinary share 7 644.14p 586.21p 570.23p
Cash Flow Statement
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
£'000 £'000 £'000
Operating activities
Investment income received 1,288 4,823 2,741
Net derivative (expenses)/income (200) 236 (67)
Underwriting commission received - 28 28
Deposit interest received 14 17 8
Investment management fee paid (1,856) (3,518) (1,746)
Directors' fees paid (65) (122) (68)
Other cash (payments)/receipts (220) 52 274
Net cash (outflow)/inflow from operating (1,039) 1,516 1,170
activities
Servicing of finance
Interest paid on bank loans - (736) (736)
Net cash outflow from servicing of finance - (736) (736)
Overseas taxation recovered 12 25 5
Financial investment
Purchase of investments (88,715) (187,551) (91,611)
Disposal of investments 93,987 223,444 120,610
Net cash inflow from financial investment 5,272 35,893 28,999
Derivative activities
Premium received on options 300 1,111 172
Premium paid on options - (1,390) (182)
Proceeds/(costs) of derivative instruments 642 406 (384)
Movements in amounts held at futures clearing 35 (1,627) -
houses and brokers
Net cash inflow/(outflow) from derivative 977 (1,500) (394)
instruments
Dividend paid to shareholders (5,979) (5,125) (5,125)
Net cash (outflow)/inflow before financing (757) 30,073 23,919
Financing
5.435% fixed rate unsecured loan repaid - (27,000) (27,000)
Net cash outflow from financing - (27,000) (27,000)
(Decrease)/increase in cash (757) 3,073 (3,081)
Notes to the Financial Statements
1 ACCOUNTING POLICIES
The Half-Yearly financial statements have been prepared on the basis of the
accounting policies set out in the Company's annual report and financial
statements dated 31 August 2010.
2 INCOME
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
£'000 £'000 £'000
Income from investments designated at fair
value through profit or loss
Franked investment income 1,603 3,671 1,898
UK scrip dividends 2,279 5,531 1,534
Overseas dividends 57 764 367
Overseas scrip dividends 31 320 47
Income from REIT investments 312 273 269
4,282 10,559 4,115
Other income
Deposit interest 14 18 8
Underwriting commission - 28 28
Total income 4,296 10,605 4,151
3 DERIVATIVE (EXPENSES)/INCOME
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
£'000 £'000 £'000
Income from derivative instruments held at
fair value through profit or loss
Interest received on short CFDs 13 11 6
Dividends received on long CFDs 59 680 215
72 691 221
Expenses from derivative instruments held at
fair value through profit or loss
Interest paid on long CFDs (194) (329) (150)
Dividends paid on short CFDs (52) (92) (17)
Derivative expenses on futures and equity - (9) -
forwards
Net derivative (expenses)/income (174) 261 54
4 TAXATION ON RETURN/(LOSS) ON ORDINARY ACTIVITIES
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
£'000 £'000 £'000
Overseas taxation suffered - 56 22
5 RETURN/(LOSS) PER ORDINARY SHARE
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
Revenue return per ordinary share 3.42p 10.74p 2.71p
Capital return/(loss) per ordinary share 65.01p (3.03p) (10.98p)
Total return/(loss) per ordinary share 68.43p 7.71p (8.27p)
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
£'000 £'000 £'000
Revenue return 1,948 6,113 1,542
Capital return/(loss) 37,017 (1,723) (6,252)
Total return/(loss) 38,965 4,390 (4,710)
Weighted average number of ordinary 56,938,896 56,938,896 56,938,896
shares in issue
6 DIVIDENDS
No dividend has been declared in respect of the current period. The dividend
shown in the Reconciliation of Movements in Shareholders' Funds for the six
months ended 28 February 2011 is the final dividend of 10.50 pence per ordinary
share in respect of the year ended 31 August 2010 which was paid on 21 December
2010. The dividend shown in the Reconciliation of Shareholders' Funds for the
six months ended 28 February 2010 and the year ended 31 August 2010 is the
final dividend of 9.00 pence per ordinary share in respect of the year ended 31
August 2009 which was paid on 23 December 2009.
7 NET ASSET VALUE PER ORDINARY SHARE
The net asset value per ordinary share is based on net assets of £366,769,000
(31.08.10: £333,783,000; 28.02.10: £324,683,000) and on 56,938,896 (31.08.10:
56,938,896; 28.02.10: 56,938,896) ordinary shares, being the number of ordinary
shares in issue at the period end.
8 INVESTMENT TRANSACTION COSTS
Included in the gains/(losses) on investments are the following investment
transaction costs:
28.02.11 31.08.10 28.02.10
unaudited audited unaudited
£'000 £'000 £'000
Purchases expenses 440 821 298
Sales expenses 108 204 90
548 1,025 388
9 UNAUDITED FINANCIAL STATEMENTS
The results for the six months to 28 February 2011 and 28 February 2010, which
are unaudited, constitute non-statutory accounts within the meaning of s435 of
the Companies Act 2006. The figures and financial information for the year
ended 31 August 2010 are extracted from the latest published financial
statements. These financial statements, on which the Independent Auditor gave
an unqualified report, have been delivered to the Registrar of Companies.
Investor Information
CONTACT INFORMATION
Private investors can call free on: 0800 41 41 10 9am to 6pm, Monday to
Saturday.
Financial advisers can call free on: 0800 41 41 81 8am to 6pm, Monday to
Friday.
www.fidelity.co.uk/its
Existing shareholders who have a specific query regarding their holding or need
to provide update information, for example a change of address, should contact
the appropriate administrator.
Holders of ordinary shares:
Capita Registrars, Registrars to Fidelity Special Values PLC, The Registry, 34
Beckenham Road, Beckenham, Kent, BR3 4TU.
Telephone: 0871 664 0300 (calls cost 10p per minute plus network extras) Lines
are open from 8.30am to 5.30pm, Monday to Friday. If calling from overseas,
telephone +44 208 639 3399 Email: ssd@capitaregistrars.com
Details of individual shareholdings and other information can also be obtained
from the Registrars' website: www.capitaregistrars.com
Fidelity Share Plan investors:
Fidelity Investment Trust Share Plan, BNP Paribas Securities Services, Block C,
Western House, Lynchwood Business Park, Peterborough PE2 6BP.
Telephone: 0845 358 1107 (calls to this number are charged at 4p per minute
from a BT landline. Other telephone providers' costs may vary).
Fidelity ISA investors:
Fidelity, using the freephone numbers given opposite, or by writing to: UK
Customer Service, Fidelity International, Oakhill House, 130 Tonbridge Road,
Hildenborough, Tonbridge, Kent, TN11 9DZ. www.fidelity.co.uk/its
Fidelity ShareNetwork:
www.fidelity.co.uk/sharenetwork
General enquiries should be made to Fidelity, the Investment Manager and
Secretary, at the Company's registered office: FIL Investments International,
Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey, KT20 6RP.
Telephone: 01732 36 11 44
Fax: 01737 83 68 92
www.fidelity.co.uk/its
FINANCIAL CALENDAR 2011
28 February - Half-Yearly period end
20 April - Announcement of
Half-Yearly results
Beginning of May - Publication of Half-Yearly report
July - Interim Management
Statement
(as at 31 May 2011)
31 August - Financial year end
November - Publication of Annual Report
December - Annual General Meeting
Directory
BOARD OF DIRECTORS
Lynn Ruddick (Chairman)
Sharon Brown (Chairman of the Audit Committee)
Ben Thomson (Senior Independent Director)
Andy Irvine
Douglas Kinloch Anderson
Nicky McCabe
MANAGER, SECRETARY AND REGISTERED OFFICE
FIL Investments International,
Beech Gate, Millfield Lane,
Lower Kingswood,
Tadworth,
Surrey, KT20 6RP.
FINANCIAL ADVISERS AND STOCKBROKERS
Cenkos Securities plc,
6,7,8 Tokenhouse Yard,
London, EC2R 7AS.
INDEPENDENT AUDITOR
Grant Thornton UK LLP,
Chartered Accountants and Registered Auditor,
30 Finsbury Square,
London, EC2P 2YU.
BANKERS AND CUSTODIAN
JPMorgan Chase Bank (London Branch),
125 London Wall, London, EC2Y 5AJ.
REGISTRARS
Capita Registrars,
The Registry,
34 Beckenham Road,
Beckenham, Kent,
BR3 4TU.
LAWYERS
Slaughter and May,
One Bunhill Row,
London, EC1Y 8YY.
The Fidelity Individual Savings Account ("ISA") is offered and managed by
Financial Administration Services Limited. The Fidelity Investment Trust Share
Plan is managed by FIL Investments International. Both companies are authorised
and regulated by the Financial Services Authority. The Fidelity Investment
Trust Share Plan is administered by BNP Paribas Securities Services and shares
will be held in the name of Puddle Dock Nominees Limited. The value of savings
and eligibility to invest in an ISA will depend on individual circumstances and
all tax rules may change in the future. Fidelity investment trusts are managed
by FIL Investments International. Fidelity only gives information about its own
products and services and does not provide investment advice based on
individual circumstances. Should you wish to seek advice, please contact a
Financial Adviser.
Please note that the value of investments and the income from them may fall as
well as rise and the investor may not get back the amount originally invested.
Past performance is not a guide to future returns. For funds that invest in
overseas markets, changes in currency exchange rates may affect the value of
your investment. Investing in small and emerging markets can be more volatile
than other more developed markets.
Reference in this document to specific securities should not be construed as a
recommendation to buy or sell these securities, but is included for the
purposes of illustration only. Investors should also note that the views
expressed may no longer be current and may already have been acted upon by
Fidelity.
The content of websites referenced in this document does not form part of this
document.
Fidelity, Fidelity International and the Pyramid Logo are trademarks of FIL
Limited.
Issued by Fidelity Special Values PLC.
WARNING TO SHAREHOLDERS - "BOILER ROOM" SCAMS
Many companies are aware that their shareholders have received unsolicited
phone calls or correspondence concerning investment matters. These are
typically from overseas based `brokers' who target UK shareholders, offering to
sell them what often turn out to be worthless or high risk shares in US or UK
investments. These operations are commonly known as `boiler rooms'. These
`brokers' can be very persistent and extremely persuasive, and a 2006 survey by
the Financial Services Authority ("FSA") reported that the average amount lost
by investors is around £20,000. It is not just the novice investor that has
been duped in this way; many of the victims had been successfully investing for
several years. Shareholders are advised to be very wary of any unsolicited
advice, offers to buy shares at a discount or offers of free company reports.
If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and organisation
• Check that they are properly authorised by the FSA before getting involved by
visiting www.fsa.gov.uk/register
• Report the matter to the FSA either by calling 0845 606 1234 or visiting
www.moneymadeclear.fsa.gov.uk
• If the calls persist, hang up.
If you deal with an unauthorised firm, you will not be eligible to receive
payment under the Financial Services Compensation Scheme. The FSA can be
contacted by completing an online form at www.fsa.gov.uk/pages/doing/regulated/
law/alerts/overseas.html
Details of any share dealing facilities that the Company endorses will be
included in Company mailings. More detailed information on this or similar
activity can be found on the FSA website www.moneymadeclear.fsa.gov.uk
Printed on FSC certified paper.
100% of the inks used are vegetable oil based 95% of press chemicals are
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The FSC logo identifies products which contain wood from well managed forests
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This document is printed on Cocoon Silk; a paper made using 50% recycled fibre
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The unavoidable carbon emissions generated during the manufacture and delivery
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offsetting project.
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