Half-yearly Report
FIDELITY SPECIAL VALUES PLC
AVAILABILITY OF THE HALF-YEARLY REPORT FOR THE SIX MONTHS TO 29 FEBRUARY 2012
Further to the disclosure of the Company's Half-Yearly report for the six
months ended 29 February 2012 by way of an announcement dated 20 April 2012, 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 2012
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 29 February 2012 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-2012.pdf
Rebecca Burtonwood
FIL Investments International
Company Secretary
3 May 2012
01737 836 869
FIDELITY SPECIAL VALUES PLC
Preliminary announcement of unaudited Half-Yearly results for the six months
ended 29 February 2012
Contents
Objective and Highlights
Financial Summary
Chairman's Statement
Manager's Half-Yearly Review
Principal Risks and Uncertainties and Going Concern
Directors' Responsibility Statement
Twenty Largest Investments
Financial Statements
Investor Information
Directory
Glossary of Terms
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.
Total Return %
Six months to From launch on
29 February 2012 17 November 1994
to 29 February
2012
Net Asset Value ("NAV") per share +10.9 +668.5
Share price +9.0 +587.4
FTSE All-Share Index1 +10.3 +238.6
1 The Company's Benchmark Index
Performance Total Return %
01/03/07 01/03/08 01/03/09 01/03/10 01/03/11
to to to to to
29/02/08 28/02/09 28/02/10 28/02/11 29/02/12
NAV per share -2.8 -31.0 +54.2 +14.9 -4.8
Share price -7.5 -29.6 +54.1 +13.0 -7.2
FTSE All-Share Index -2.7 -33.0 +47.3 +17.0 +1.5
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
Financial Summary
29 February 31 August
2012 2011
Assets
Shareholders' funds £331.7m £312.5m
NAV per share 600.42p 552.85p
Number of ordinary shares in issue 55,243,896 56,528,896
Share price data
Share price at period end 526.00p 494.00p
Share price period high 526.50p 595.00p
Share price period low 443.00p 469.00p
Discount at period end 12.4% 10.6%
Discount period high 14.8% 12.1%
Discount period low 10.7% 6.8%
Returns for the six months to end February 2012 2011
Revenue return per ordinary share 3.95p 3.42p
Capital return per ordinary share 52.88p 65.01p
Total return per ordinary share 56.83p 68.43p
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
Chairman's Statement
RESULTS FOR THE SIX MONTHS TO
29 FEBRUARY 2012
NAV PER SHARE: +10.9%
SHARE PRICE: +9.0%
BENCHMARK INDEX: +10.3%
(TOTAL RETURN)
Over the six month period under review the Net Asset Value ("NAV") return of
the Company grew by 10.9% against the return of the FTSE All-Share Index
(benchmark index) of 10.3%. The share price of the Company lagged that of the
UK equity market, returning 9.0%.
In his report to shareholders, the Company's Portfolio Manager, Sanjeev Shah,
explains that the six months under review fell into two distinct parts with
very different characteristics. In the first, from the Company's last full year
at the end of August 2011 until the end of the calendar year, the NAV of the
Company failed to keep pace with the overall UK equity market. However in the
first two months of 2012 the Company outperformed strongly to make up the lost
ground and this performance has continued since the end of February. In last
year's full report Sanjeev commented that he did not anticipate the global
economy entering into the much feared `double dip' in a magnitude equal to that
of 2008, but that he felt we were instead only part of the way through a long
and painful period of low growth as the world moves back to full recovery. He
also commented that he was finding more stocks that met with his contrarian
value criteria for investments. The renewed concern over Eurozone sovereign
debt caused a significant correction at the very start of the Company's new
financial year, giving rise to concerns that a `double dip' was indeed a likely
outcome; however since then the domestic recovery in the US allied to more
positive long term actions by the European Central Bank ("ECB") has created the
type of environment for which Sanjeev has positioned the Company's portfolio.
SHARE REPURCHASES
During the six months to 29 February 2012, 1,285,000 ordinary shares were
repurchased for cancellation. Following the end of the period, a further
230,000 ordinary shares were repurchased for cancellation.
OUTLOOK
The domestic US economy is showing early but consistent signs of a more natural
increase in economic activity, this time without the previous levels of
financial stimulus. At the same time the immediate action taken by the new Head
of the ECB to cut the euro interest rate and to underpin the commitment to
support the region's banks over at least the medium term did much, initially,
to allay the worst of the markets concerns about Eurozone solvency. However
there continue to be significant worries about the debt levels in Spain and
elsewhere. The sustained increase in oil prices in UK sterling terms remains a
key threat to full global recovery, and this is an issue which is as much the
result of political instability in the oil producing world as supply and demand
economics. Against this background Sanjeev continues to work on shareholders'
behalf to identify companies whose true value is not fully appreciated. The
Board is confident that the true value of many of the stocks he holds will be
increasingly appreciated by the wider market.
Total 3 years 5 years Since
returns (%) launch
NAV per share +68.6 +13.0 +668.5
Share price +61.7 +5.3 +587.4
Index +75.0 +14.2 +238.6
The attribution of the Company's return for the six months to 29 February 2012
is detailed in the table below.
Analysis of change in NAV pence
in the period
NAV @ 31 August 2011 552.85
Impact of Index1 +56.27
Impact of Portfolio Management1 +3.65
Impact of Other Derivatives2 +0.39
Operational Costs -3.33
Dividend Paid -11.25
Share Repurchases +1.65
Cash and Residual -1.11
NAV @ 29 February 2012 600.42
1 Equities purchased via cash or long CFDs
2 Futures, options and short CFDs
Lynn Ruddick
Chairman
20 April 2012
Manager's Half-Yearly Review
HALF-YEARLY RETURNS:
NAV per share: +10.9% to 600.42p
Share price: +9.0% to 526.00p
Benchmark Index: +10.3%
Over the first six month period of its new financial year the Company's assets
increased by more than the FTSE All-Share Index to record a return of 10.9%
against the 10.3% increase posted by the Index. During the first four months of
the period the Company's net asset value declined by 0.4% whilst the Index rose
by 3.0%; however the first two months of 2012 saw the Company's net asset value
increase by 11.2% compared to the 7.1% rise in the Index. The last part of
calendar year 2011 was difficult for the Company's performance as the market
began to fear a `double dip' scenario as the Eurozone sovereign debt crisis
evolved. However this market environment, when fear and pessimism are at the
most extreme, is exactly the sort of environment when contrarian value stock
picking opportunities are most plentiful. I indicated in my report to
shareholders at the end of the Company's last financial year that although
economic recovery post the financial crisis would be slow and prolonged, I saw
a significant `double dip' as being a low probability event. This led me to use
the most recent crisis to reposition the Company's portfolio further towards
financial and consumer cyclical stocks. Both of these sectors have subsequently
benefited from improving US economic data and the stronger policy response from
the ECB such as its Long Term Refinancing Operations.
As part of this repositioning I have continued to look for ways to gain
exposure to the stabilisation of housing markets in developed countries. The US
subprime market was at the heart of the global financial crisis and now, five
years on, there is increasing evidence that house prices and the level of
housing transactions are stabilising. As an example, Wolseley, a construction
materials distributor, has become a top ten position as we entered the
Company's new financial year and it was the strongest contributor to
performance over the past six months. I also have exposure to UK housebuilders
such as Redrow and DIY retailers such as Kingfisher which are beneficiaries of
the same theme.
Total return performance
for the six months to 29 February 2012
Overall my long held stance in being overweight banks detracted from relative
performance; however this negative contribution was all in the first four
months of the Company's financial year. Since January, my banking positions,
including Lloyds, have been the strongest contributing sector to performance.
This is still a contrarian position as most of my peers are underweight in the
banks sector. However, I continue to have robust conviction that owning retail
and commercial banks with strong market positions will prove to be a highly
rewarding multi year investment opportunity. Funding and capital positions are
better than 2008, business is being written at more attractive rates of return,
disruptive competition has withdrawn from several markets and valuations are at
multi decade lows.
Conversely I continue to avoid significant commodity exposure, and in
particular mining stocks. Here I am more bearish of underlying demand and
supply fundamentals across several base metals and there are more and more
negative data points around Chinese construction growth, a key driver of demand
in the previous decade. The underweight stance in mining contributed
significantly to performance over the six month review period.
I hold a number of positions in the Company's portfolio which I term
`turnaround situations'. Often this is where there has been a change in the top
management of a company and the new team has embarked on a comprehensive drive
to recover operational performance. This is quite normal given the economic
upheaval we have seen over the last few years. Top positions such as QinetiQ in
the defence sector, Ladbrokes in the leisure sector and ITV in the media sector
are examples of such turnaround situations and were all in the top contributors
to relative performance over the six month review period.
Another theme to which I have significant exposure to is a slow but steady
recovery in corporate spending. Corporate balance sheets are strong relative to
history but given the uncertain economic climate over the last few years
corporate capital expenditure and, more broadly corporate spending, are now at
multi decade lows. United Business Media, a leading events company, benefits
from an improvement in business spending intentions and was a top ten
contributor to performance over the review period. This is also one of the
reasons I have exposure to IT service companies such as Logica; unfortunately
weakness in the Benelux and Scandinavian operations led to Logica being a
significant detractor to performance over the six months as a whole, but again
performance has been strong since January.
The consumption of mobile data is growing at exponential rates and the internet
is transforming and disrupting many business models. More and more individuals
have smartphones and tablets and are using these devices in ways we would not
have imagined possible a few years ago. I have exposure to the mobile data
theme through small companies such as Anite which is geared to the testing of
next generation networks of mobile operators. The company has almost quadrupled
over the past four years and was again a top contributor to performance over
the review period. However Ericsson, a top ten position, was a significant
detractor to the Company's performance as a result of weakness in its margins.
Ericsson provides equipment to mobile operators to make their network more data
enabled. With its market leading position and multi year low valuation I have
conviction that over time it will contribute strongly to performance and as a
result I have added to my exposure. Pure-play ecommerce stocks such as
Moneysupermarket and Ocado also feature heavily in the Company's portfolio.
There are a number of other holdings which are also beneficiaries of the
internet and the move to `digital'. For example, Electrocomponents was a top
contributor to performance and it continues to benefit from shifting its
catalogue based distribution model to a more internet based distribution model.
I believe we are likely to be in a low economic growth environment in the
Western world for many years given the high sovereign and consumer debt in many
countries. Interestingly, despite this shortage of economic growth, within
equity markets many high growth stocks are trading at a multi year low premium
versus low growth stocks.
The Company has significant exposure to companies where I believe their
structural growth is under appreciated and which, to my mind, still represent
contrarian value. The Emerging Market consumer theme is one which I believe
will persist for several years hence my exposure to names such as Burberry and
L'Oreal. I have chosen, however, to avoid companies in the foods, beverages and
tobacco sectors where many stocks are trading at multi decade high relative
valuations, a decision which detracted from the Company's performance up until
January.
Since the end of the review period in February the Company has continued to
perform well and has outperformed the benchmark index by 3.4% in the month of
March and by 1.6% since the period end to 17 April. In 2012 I believe
fundamentals have begun to reassert themselves in stock valuations after a
period in which valuations converged across the market. I remain positive on
equities overall as an asset class given both the low interest rate environment
and the low exposure to equities in the portfolios of most retail and
institutional investors. I continue to position the portfolio for a long,
prolonged road to economic recovery but not for a `depression-like'
environment, and hence feel we are very much in the early cycle phase of stock
market evolution. There are some very good contrarian value opportunities which
exist in the stock market today.
Sanjeev Shah
Portfolio Manager
20 April 2012
Principal Risks and Uncertainties and Going Concern
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
comprising market, share price and discount risks and the second, internal
risks, comprising investment management 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 2011.
GOING CONCERN
The Board receives regular reports from the Manager and the Directors have a
reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the financial statements as
outlined in the Annual Report for the year ended 31 August 2011.
By order of the Board
FIL Investments International
20 April 2012
Directors' 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 the Manager's Half-Yearly Review on pages 3 to
7 (constituting the interim management report) include 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;
c) a description of the principal risks and uncertainties and going concern for
the remaining six months of the financial year are detailed on page 8; and
d) in accordance with Disclosure and Transparency Rule 4.2.8R there have been
no related parties transactions during the six months to 29 February 2012 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 20 April 2012 and
the above responsibility statement was signed on its behalf by Lynn Ruddick,
Chairman.
Twenty Largest Investments as at 29 February 2012
Investments including derivatives Exposure Fair value1 %2
£'000 £'000
HSBC
Banking and financial services 24,059 24,011 6.6
GlaxoSmithKline
Pharmaceuticals 18,783 18,783 5.1
BP
International oil and gas 17,984 17,984 4.9
Lloyds Banking Group
Banking and financial services 16,885 16,885 4.6
Ericsson
Global telecommunications equipment and 11,547 2,941 3.2
related services
Vodafone
Mobile telecommunications 11,170 11,170 3.1
ITV
Media 10,570 10,570 2.9
Wolseley
Construction materials 10,550 10,550 2.9
Centrica
Integrated energy 10,280 10,280 2.8
Ladbrokes
Betting and gaming 10,113 10,113 2.8
British Sky Broadcasting
Broadcasting 9,946 9,946 2.7
Kingfisher
International home improvement retailer 9,817 9,817 2.7
Pearson
Global publishing 9,662 9,662 2.6
QinetiQ
International defence and security 9,589 9,589 2.6
technology services
BT
Communications services 8,316 8,316 2.3
Citigroup
Global diversified financial services 7,825 7,825 2.1
London Stock Exchange
United Kingdom's primary stock exchange 7,659 7,659 2.1
United Business Media
Global business media 7,541 7,541 2.1
Burberry
Luxury clothing and non-apparel accessories 7,266 7,266 2.0
Logica
Information technology consultancy services 7,163 7,163 2.0
Twenty largest investments including 226,725 218,071 62.1
derivatives
1 Fair value recognised in the Balance Sheet on page 16 is measured as:
- Listed and AIM quoted investments are valued at bid prices or last prices,
where available, otherwise at published price quotations;
- Unlisted investments are valued using an appropriate valuation technique in
the absence of an active market;
- Futures and options are valued at the quoted trade price for the contract;
and
- Contracts For Difference ("CFDs") are valued as the difference between the
settlement price and the value of the underlying shares in the contract
(unrealised gains/(losses))
2 % based on total exposure which is the fixed asset investments plus the fair
value of the underlying securities within the derivatives
Income Statement
for the six months for the year ended for the six months
ended 31 August 2011 ended
29 February 2012 audited 28 February 2011
unaudited unaudited
Notes revenue capital total revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on - 30,334 30,334 - (17,846) (17,846) - 35,458 35,458
investments
designated at fair
value through
profit or loss
(Losses)/gains on - (911) (911) - (6,642) (6,642) - 5,645 5,645
investments via
long CFDs held at
fair value through
profit or loss
Gains/(losses) on - 214 214 - 5,147 5,147 - (4,102) (4,102)
futures, options
and short CFDs held
at fair value
through profit or
loss
Net income 2 4,019 - 4,019 10,517 - 10,517 4,122 - 4,122
Investment (1,644) - (1,644) (3,711) - (3,711) (1,906) - (1,906)
management fee
Other expenses (283) - (283) (562) - (562) (268) - (268)
Exchange gains/ 3 (14) (11) 1 (67) (66) - 16 16
(losses) on other
net assets
Net return/(loss) 2,095 29,623 31,718 6,245 (19,408) (13,163) 1,948 37,017 38,965
on ordinary
activities before
taxation
Taxation on return/ 3 120 - 120 250 - 250 - - -
(loss) on ordinary
activities
Net return/(loss) 2,215 29,623 31,838 6,495 (19,408) (12,913) 1,948 37,017 38,965
on ordinary
activities after
taxation for the
period
Return/(loss) per 4 3.95p 52.88p 56.83p 11.43p (34.17p) (22.74p) 3.42p 65.01p 68.43p
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
Association of Investment Companies ("AIC") Statement of Recommended Practice
("SORP") issued in January 2009.
Reconciliation of Movements in Shareholders' Funds
Notes share share capital other non- capital revenue total
capital premium redemption distributable reserve reserve equity
£'000 account reserve reserve £'000 £'000 £'000
£'000 £'000 £'000
Opening 14,234 95,767 2,554 5,152 208,765 7,311 333,783
shareholders'
funds: 1
September 2010
Net return on - - - - 37,017 1,948 38,965
ordinary
activities after
taxation for the
period
Dividend paid to 5 - - - - - (5,979) (5,979)
shareholders
Closing 14,234 95,767 2,554 5,152 245,782 3,280 366,769
shareholders'
funds: 28
February 2011
Opening 14,234 95,767 2,554 5,152 208,765 7,311 333,783
shareholders'
funds: 1
September 2010
Repurchase of 6 (103) - 103 - (2,370) - (2,370)
ordinary shares
Net (loss)/ - - - - (19,408) 6,495 (12,913)
return on
ordinary
activities after
taxation for the
year
Dividend paid to 5 - - - - - (5,979) (5,979)
shareholders
Closing 14,131 95,767 2,657 5,152 186,987 7,827 312,521
shareholders'
funds: 31 August
2011
Repurchase of 6 (321) - 321 - (6,342) - (6,342)
ordinary shares
Net return on - - - - 29,623 2,215 31,838
ordinary
activities after
taxation for the
period
Dividend paid to 5 - - - - - (6,319) (6,319)
shareholders
Closing 13,810 95,767 2,978 5,152 210,268 3,723 331,698
shareholders'
funds: 29
February 2012
Balance Sheet
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
Notes £'000 £'000 £'000
Fixed assets
Investments designated at fair value 327,853 301,931 353,545
through profit or loss
Current assets
Derivative assets held at fair value 1,870 1,553 3,669
through profit or loss
Debtors 3,377 3,077 3,644
Amounts held at futures clearing houses 3,563 5,359 2,302
and brokers
Cash at bank 4,518 7,716 10,408
13,328 17,705 20,023
Creditors
Derivative liabilities held at fair value (4,930) (4,881) (5,253)
through profit or loss
Other creditors (4,553) (2,234) (1,546)
(9,483) (7,115) (6,799)
Net current assets 3,845 10,590 13,224
Total net assets 331,698 312,521 366,769
Capital and reserves
Share capital 6 13,810 14,131 14,234
Share premium account 95,767 95,767 95,767
Capital redemption reserve 2,978 2,657 2,554
Other non-distributable reserve 5,152 5,152 5,152
Capital reserve 210,268 186,987 245,782
Revenue reserve 3,723 7,827 3,280
Total equity shareholders' funds 331,698 312,521 366,769
Net asset value per ordinary share 7 600.42p 552.85p 644.14p
Cash Flow Statement
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
£'000 £'000 £'000
Operating activities
Investment income received 4,211 4,093 1,288
Net derivative expenses (166) (54) (200)
Deposit interest received 28 57 14
Investment management fee paid (2,564) (2,790) (1,856)
Directors' fees paid (92) (121) (65)
Other cash receipts/(payments) 209 (367) (220)
Net cash inflow/(outflow) from operating 1,626 818 (1,039)
activities
Taxation
Overseas taxation recovered 122 290 12
Taxation recovered 122 290 12
Financial investment
Purchase of investments (65,702) (197,893) (88,715)
Disposal of investments 72,602 204,937 93,987
Net cash inflow from financial investment 6,900 7,044 5,272
Derivative activities
Premium paid on options (33) (810) -
Premium received on options 84 2,134 300
(Payments)/proceeds on derivative instruments (1,016) (1,676) 642
Movements on amounts held at futures clearing 1,796 (2,889) 35
houses and brokers
Net cash inflow/(outflow) from derivative 831 (3,241) 977
activities
Dividend paid to shareholders (6,319) (5,979) (5,979)
Net cash inflow/(outflow) before financing 3,160 (1,068) (757)
Financing
Repurchase of ordinary shares (6,342) (2,370) -
Net cash outflow from financing (6,342) (2,370) -
Decrease in cash (3,182) (3,438) (757)
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 for the year ended 31 August 2011.
2 INCOME
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
£'000 £'000 £'000
Income from investments designated at fair value
through profit or loss
UK dividends 3,259 4,413 1,603
UK scrip dividends 541 5,499 2,279
Overseas dividends 139 178 57
Overseas scrip dividends 181 - 31
Income from REIT investments 38 481 312
4,158 10,571 4,282
Income from derivative instruments held at fair
value through profit
or loss
Interest received on short CFDs 12 41 13
Dividends received on long CFDs 39 727 59
4,209 11,339 4,354
Other income
Deposit interest 27 57 14
Total income 4,236 11,396 4,368
Expenses of derivative instruments held at fair
value through
profit or loss
Interest paid on long CFDs (162) (452) (194)
Dividends paid on short CFDs (55) (427) (52)
Total net income 4,019 10,517 4,122
3 TAXATION ON RETURN/(LOSS) ON ORDINARY ACTIVITIES
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
£'000 £'000 £'000
Overseas taxation (credit)/charge for the period
Overseas taxation recovered (121) (253) -
Overseas taxation suffered 1 3 -
(120) (250) -
4 RETURN/(LOSS) PER ORDINARY SHARE
The return/(loss) per ordinary share is based on the net return/(loss) on
ordinary activities after taxation for the period and by the weighted average
number of ordinary shares in issue during the period.
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
Revenue return per ordinary share 3.95p 11.43p 3.42p
Capital return/(loss) per ordinary share 52.88p (34.17p) 65.01p
Total return/(loss) per ordinary share 56.83p (22.74p) 68.43p
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
£'000 £'000 £'000
Revenue return 2,215 6,495 1,948
Capital return/(loss) 29,623 (19,408) 37,017
Total return/(loss) 31,838 (12,913) 38,965
Weighted average number of ordinary shares in 56,021,478 56,801,156 56,938,896
issue during the period
5 DIVIDENDS
No dividend has been declared in respect of the current period. The dividend
payment of £6,319,000 shown in the Reconciliation of Movements in Shareholders'
Funds for the six months ended 29 February 2012 is the final dividend of 11.25
pence per ordinary share for the year ended 31 August 2011 that was paid on 19
December 2011. The dividend payment of £5,979,000 shown in the Reconciliation
of Movements in Shareholders' Funds for the six months ended 28 February 2011
and for the year ended 31 August 2011 is the final dividend of 10.50 pence per
ordinary share for the year ended 31 August 2010 that was paid on 21 December
2010.
6 SHARE CAPITAL
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
shares shares shares
Issued, allotted and fully paid:
Ordinary shares of 25 pence each
Beginning of the period 56,528,896 56,938,896 56,938,896
Repurchase of ordinary shares (1,285,000) (410,000) -
End of the period 55,243,896 56,528,896 56,938,896
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
£'000 £'000 £'000
Issued, allotted and fully paid:
Ordinary shares of 25 pence each
Beginning of the period 14,131 14,234 14,234
Repurchase of ordinary shares (321) (103) -
End of the period 13,810 14,131 14,234
7 NET ASSET VALUE PER ORDINARY SHARE
The net asset value per ordinary share is based on total net assets of £
331,698,000 (31.08.11: £312,521,000; 28.02.11: £366,769,000) and on 55,243,896
(31.08.11: 56,528,896; 28.02.11: 56,938,896) ordinary shares, being the number
of ordinary shares in issue at the period end.
8 INVESTMENT TRANSACTIONS COSTS
Included in gains/(losses) on investments designated at fair value through
profit or loss are the following investment transaction costs:
29.02.12 31.08.11 28.02.11
unaudited audited unaudited
£'000 £'000 £'000
Purchases 387 969 440
Sales 105 336 108
492 1,305 548
9 UNAUDITED FINANCIAL STATEMENTS
The results for the six months to 29 February 2012 and 28 February 2011, which
are unaudited, constitute non-statutory accounts within the meaning of Section
435 of the Companies Act 2006. The figures and financial information for the
year ended 31 August 2011 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: call free on:
0800 41 41 10 9am to 6pm, Monday to Saturday.
Financial advisers: 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 updated 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).
Email: ssd@capitaregistrars.com www.capitaregistrars.com
Fidelity Share Plan investors
Fidelity Investment Trust Share Plan,
Block C, Western House, Lynchwood Business Park,
Peterborough PE2 6BP.
Telephone: 0845 358 1107 (calls to this number are charged at 3.95p 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 Worldwide Investment,
Oakhill House, 130 Tonbridge Road,
Hildenborough, Tonbridge,
Kent, TN11 9DZ.
www.fidelity.co.uk/its
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 2012
29 February - Half-Yearly period end
April - Announcement of Half-Yearly results
Beginning of - Publication of Half-Yearly report
May
July - Interim Management Statement (as at 31 May 2012)
31 August - Financial year end
November - Publication of Annual Report
December - Annual General Meeting
Directory
BOARD OF DIRECTORS
Lynn Ruddick (Chairman)
Ben Thomson
(Senior Independent Director)
Sharon Brown
(Chairman of the Audit Committee)
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
INDEPENDENT AUDITOR
Grant Thornton UK LLP
Chartered Accountants and Registered Auditor
30 Finsbury Square
London EC2P 2YU
LAWYERS
Dickson Minto W.S.
Broadgate Tower
20 Primrose Street
London EC2A 2EW
BANKERS AND CUSTODIAN
JPMorgan Chase Bank (London Branch)
125 London Wall
London EC2Y 5AJ
FINANCIAL ADVISERS AND STOCKBROKERS
Cenkos Securities plc
6,7,8 Tokenhouse Yard
London EC2R 7AS
REGISTRARS
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Glossary of Terms
BENCHMARK
FTSE All-Share Index against which the performance of the Company is measured
CONTRACT FOR DIFFERENCE (CFD)
A contract between an investor and an investment house at the end of which the
parties exchange the difference between the opening price and the closing price
of the underlying asset of the specified financial instrument. It does not
involve buying or selling the underlying asset, only agreeing to receive or pay
the movement in its share price. A Contract For Difference allows the investor
to gain access to the movement in the share price by depositing a small amount
of cash known as margin. The investor may reason that the asset price will
rise, by buying ("long" position) or fall, by selling ("short" position). If
the investor trades long, dividends are received and interest is paid. If the
investor trades short, dividends are paid and interest is received
DERIVATIVES
Financial instruments (such as futures, options and Contracts For Difference)
whose value is derived from the value of an underlying asset
DISCOUNT
If the share price of the Company is lower than the net asset value per share,
the Company is said to be trading at a discount. The discount is shown as a
percentage of the net asset value. The opposite of a discount is a premium. It
is more common for an investment trust to trade at a discount than a premium
EXPOSURE
The total of fixed asset investments, futures and options at fair value plus
the fair value of the underlying securities within the Contracts For Difference
FAIR VALUE
The fair value is the best estimate of the value of the investments, including
derivatives, at a point in time and this is measured as:
• Listed and AIM quoted investments valued at bid prices, or last price, where
available otherwise at published price quotations
• Unlisted investments valued using an appropriate valuation technique in the
absence of an active market
• Futures and options valued at the quoted trade price for the contract
• Contracts For Difference valued as the difference between the settlement
price and the value of the underlying shares in the contract (unrealised gains
or losses)
FUTURE OR FUTURE CONTRACT
An agreement to buy or sell a fixed amount of an asset at a fixed future date
and a fixed price
GEARING OR GEARING EXPOSURE
Gearing or gearing exposure describes the level of a Company's debt and is
usually expressed as a percentage. It can be through the use of bank loans,
bank overdrafts or Contracts For Difference in order to increase a Company's
exposure to stocks. Borrowing is permitted to buy or gain exposure to further
investments. If assets rise in value, gearing magnifies the return to ordinary
shareholders. Correspondingly, if the assets fall in value, gearing magnifies
the fall. The gearing percentage reflects the amount of borrowings the Company
uses to invest in the market. Contracts For Difference are used as a way of
gaining exposure to the price movements of shares without buying the underlying
shares directly
NET ASSET VALUE (NAV)
Net asset value is sometimes also described as "shareholders' funds", and
represents the total value of the Company's assets less the total value of its
liabilities. For valuation purposes it is common to express the net asset value
on a per share basis
OPTIONS
Options (call or put) are used to gain or reduce exposure to the underlying
asset on a conditional basis, for example, the purchase of a call option
provides exposure to the upside potential of an underlying stock, with the
downside risk being limited to the premium paid
PREMIUM
If the share price of the Company is higher than the net asset value per share,
the Company is said to be trading at a premium. The premium is shown as a
percentage of the net asset value. The opposite of a premium is a discount
RETURN
The return generated in the period from the investments:
• Income Return reflects the dividends and interest from investments and other
income net of expenses, finance costs and taxation.
• Capital Return reflects the return on capital, excluding any income returns.
• Total Return reflects the aggregate of capital and income returns in the
period. The net asset value total return reflects capital changes in the net
asset value and dividends paid in the period
SHARE REPURCHASES
An increasingly popular way for investment trust companies to return cash to
their shareholders is through offering to repurchase a proportion of shares
currently held. Companies seek the permission of shareholders to do so at their
annual general meetings allowing them to repurchase a proportion of their total
shares (up to 15%) in the market at prices below the prevailing net asset value
per share. This process is also used to enhance the net asset value per share
and to reduce the discount to net asset value.
TOTAL RETURN
The return on the share price or net asset value per share taking into account
the rise and fall of share prices and the dividends paid to shareholders. Any
dividends received by the shareholder are assumed to have been reinvested in
additional shares (for share price total return) or the Company's assets (for
net asset value total return)
FURTHER INFORMATION
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.
Issued by Fidelity Special Values PLC.
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.
Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo
and F symbol are trademarks of FIL Limited.
The content of websites referred to in this document do not form part of this
Half-Yearly Report.
Warning to Shareholders
SHARE FRAUD WARNING
Share fraud includes scams where investors are called out of the blue and
offered shares that often turn out to be worthless or non-existent, or an
inflated price for shares they own. These calls come from fraudsters operating
in `boiler rooms' that are mostly based abroad.
While high profits are promised, those who buy or sell shares in this way
usually lose their money.
The Financial Services Authority (FSA) has found most share fraud victims are
experienced investors who lose an average of £20,000, with around £200m lost in
the UK each year.
PROTECT YOURSELF
If you are offered unsolicited investment advice, discounted shares, a premium
price for shares you own, or free company or research reports, you should take
these steps before handing over any money:
1. Get the name of the person and organisation contacting you.
2. Check the FSA Register at www.fsa.gov.uk/fsaregister to ensure they are
authorised.
3. Use the details on the FSA Register to contact the firm.
4. Call the FSA Consumer Helpline on 0845 606 1234 if there are no contact
details on the Register or you are told they are out of date.
5. Search our list of unauthorised firms and individuals to avoid doing
business with.
6. REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other investments, you
will not have access to the Financial Ombudsman Service or Financial Services
Compensation Scheme (FSCS) if things go wrong.
REPORT A SCAM
If you are approached about a share scam you should tell the FSA using the
share fraud reporting form at www.fsa.gov.uk/scams, where you can find out
about the latest investment scams. You can also call the Consumer Helpline on
0845 606 1234.
If you have already paid money to share fraudsters you should contact Action
Fraud on
0300 123 2040
Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo
and F symbol are trademarks of FIL Limited
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The unavoidable carbon emissions generated during the manufacture and delivery
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