Half-yearly Report

FIDELITY SPECIAL VALUES PLC

                Preliminary Announcement of Unaudited Half-Yearly Report
                       for the six months ended 28 February 2007

HALF-YEARLY REPORT

 
                               Half Year Review:                               


Half Year Returns:    NAV     591.5p per share;     + 8.0%;

Share price                     561p;               + 7.6%

Benchmark                                            +6.3%

In the six months to 28 February 2007 the Company has made further progress in
achieving its goal of capital growth for shareholders. The net asset value per
share (NAV) has risen from 547.7p to 591.5p per share, an increase of 8.0% and
compares with a rise in our benchmark, the FTSE All-Share Index, of 6.3%. The
share price rose by 7.6% to 561p, leaving the shares selling on a discount of
5.2%.

STOCK MARKET & PORTFOLIO REVIEW:

Our financial year started shortly after the end of the 2006 summer sell off;
this reaction had been triggered by fears of rising inflation and interest
rates, following the huge rise in

commodity prices, notably oil, in the first part of that calendar year. In the
event, commodity prices, as well as equities declined and brought relief to
investors starting a recovery which lasted for most of the period under review.
Mergers and acquisition activity continued unabated, giving encouragement to
investors that a sell off would encourage companies to make bids for others.
However, the Bank of England signalled that it remained on "inflation watch"
raising interest rates twice - by a quarter of a percent in November and,
rather unexpectedly, also in January 2007. The continued growth of the economy
and higher interest rates have attracted currency investors to Sterling and the
Pound rose yet further to end at US$1.96, up from US$1.90 at the beginning of
the period.

In the stock market the key sectors which have the greatest effect on the
market's return are Banks, Oil & Gas, Pharmaceuticals and Telecommunications
which produced mixed returns. Oil & Gas were affected by weak oil prices and
Pharmaceuticals lost money being influenced by the election in the US of a
Democrat controlled Congress; Banks strengthened but underperformed the
benchmark and only Telecommunications outperformed. Medium sized companies did
particularly well.

Our biggest portfolio exposure was to the Media sector which helped our returns
- aided particularly by BSkyB buying a significant stake in ITV at a premium to
the then market price. We also benefited from our investments in those food
retailers which succeeded in improving their margins through tight cost
controls. We suffered from our holdings in the online gaming companies which
were affected by the US Congress passing laws banning such activities. The
three best contributors to our returns were, not withstanding the weakness in
the Oil and Gas sector, Royal Dutch Shell (+6.15p per share), ITV (+5.63p per
share) and  J Sainsbury (+4.77p per share) while Sportingbet (-8.65p per
share), Statoil (-2.18p per share) and Roche (-2.11p per share) were our
greatest detractors.

During the six month period we retained a good deal of cash liquidity, which
offset the effect of our borrowings. While it is our long term policy to have
borrowings of between 15% and 20% of shareholders funds, our - that is the
Board's and the Manager's - view of the market, after nearly four years of
largely uninterrupted bull market, is one of caution. Whilst we still have £40
million of borrowings, our borrowings net of cash and cash equivalents position
at the end of the period amounted to £6.6 million.

Change of Portfolio Manager

Shareholders will be well aware that Anthony Bolton, who has been our portfolio
manager since the inception of the Company in 1994, will be stepping down at
the end of 2007.  The annual report, due out in November, will pay tribute to
his considerable achievement while at the helm.  In his place we are pleased to
welcome Sanjeev Shah.  The careful process of choosing a successor has involved
both the Board and the Manager.  Sanjeev, like most portfolio managers in
Fidelity, started his Fidelity career as an analyst, joining in 1996, and he
has progressed from there, becoming a portfolio manager in 2002.  He managed
the Fidelity UK Aggressive Fund between October 2002 and August 2005 and, since
September 2005, he has managed Fidelity Funds European Aggressive Fund. We look
forward to working with him and are confident that he will be able to continue
to provide shareholders with good returns over the longer term.

By order of the Board
Fidelity Investments International
15 May 2007

 

Enquiries:   

Miss Tracey A Bennett
Fidelity Investments International
01737 836883  

Mr Stephen Westwood 
Fidelity Investments International 
020 7961 4477

 
CB31297/NA


FIDELITY SPECIAL VALUES PLC
Income Statement

                 for the six months ended   for the year ended      for the six months   
                                                                           ended         
                         28.02.07                31.08.06                28.02.06        
                                                                                         
                        unaudited                 audited                unaudited       
                                                                                         
                                                                                         
                                                                                         
                 revenue capital    total revenue capital  total  revenue capital  total 
                                                                                         
                  £'000    £'000   £'000   £'000   £'000   £'000   £'000   £'000   £'000 
                                                                                         
Gains on               -   30,412  30,412       -  56,746  56,746       -  50,947  50,947
investments                                                                              
                                                                                         
Dividend income    2,965        -   2,965   8,832       -   8,832   2,439       -   2,439
                                                                                         
Interest income      887        -     887     700       -     700     116       -     116
                                                                                         
Underwriting           -        -       -      16       -      16       7       -       7
commission                                                                               
income                                                                                   
                                                                                         
Investment       (2,276)        - (2,276) (4,303)       - (4,303) (2,082)       - (2,082)
management fee                                                                           
                                                                                         
Other expenses     (227)        -   (227)   (542)       -   (542)   (241)       -   (241)
                                                                                         
Exchange gains/        1      (1)       -     (4)    (17)    (21)     (2)       5       3
(losses)                                                                                 
                                                                                         
Net return         1,350   30,411  31,761   4,699  56,729  61,428     237  50,952  51,189
before finance                                                                           
costs and                                                                                
taxation                                                                                 
                                                                                         
Interest payable (1,074)        - (1,074) (2,165)       - (2,165) (1,074)       - (1,074)
                                                                                         
Return/(loss) on     276   30,411  30,687   2,534  56,729  59,263   (837)  50,952  50,115
ordinary                                                                                 
activities                                                                               
before taxation                                                                          
                                                                                         
Taxation on          (1)        -     (1)   (149)       -   (149)       7       -       7
ordinary                                                                                 
activities*                                                                              
                                                                                         
Return/(loss) on     275   30,411  30,686   2,385  56,729  59,114   (830)  50,952  50,122
ordinary                                                                                 
activities after                                                                         
taxation for the                                                                         
period                                                                                   
                                                                                         
Return/(loss)    0.42p   46.81p   47.23p  3.65p   86.80p  90.45p  (1.27p) 77.96p  76.69p 
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. 
All revenue and capital items in the Income Statement derive from continuing
operations. No operations were acquired or discontinued in the year.

* This relates to overseas taxation only. 


Reconciliation of Movements in Shareholders' Funds

                called-up   share    capital             other  capital    capital revenue   total
                    share premium redemption non-distributable  reserve    reserve reserve  equity
                  capital account    reserve           reserve realised unrealised                
                                                                                                  
                   £'000   £'000      £'000             £'000    £'000      £'000   £'000   £'000 
                                                                                                  
Opening            16,339  95,058        404             5,152  113,023     68,475   2,988 301,439
shareholders'                                                                                     
funds: 1                                                                                          
September 2005                                                                                    
                                                                                                  
Effect of               -       -          -                 -        -      (833)       -   (833)
changing prices                                                                                   
from middle                                                                                       
market to bid                                                                                     
market at 1                                                                                       
September 2005                                                                                    
                                                                                                  
Net recognised          -       -          -                 -   36,881     14,071       -  50,952
gains for the                                                                                     
year                                                                                              
                                                                                                  
Revenue loss            -       -          -                 -        -          -   (830)   (830)
after taxation                                                                                    
                                                                                                  
Dividend paid           -       -          -                 -        -          - (1,797) (1,797)
                                                                                                  
Closing            16,339  95,058        404             5,152  149,904     81,713     361 348,931
shareholders'                                                                                     
funds:  28                                                                                        
February 2006                                                                                   
                                                                                                  
Opening            16,339  95,058        404             5,152  113,023     68,475   2,988 301,439
shareholders'                                                                                     
funds: 1                                                                                          
September 2005                                                                                    
                                                                                                  
Effect of               -       -          -                 -        -      (833)       -   (833)
changing prices                                                                                   
from middle                                                                                       
market to bid                                                                                     
market at 1                                                                                       
September 2005                                                                                    
                                                                                                  
Net recognised          -       -          -                 -   80,370   (23,641)       -  56,729
gains/(losses)                                                                                    
for the period                                                                                    
                                                                                                  
Revenue after           -       -          -                 -        -          -   2,385   2,385
taxation                                                                                          
                                                                                                  
Dividend paid           -       -          -                 -        -          - (1,797) (1,797)
                                                                                                  
Closing            16,339  95,058        404             5,152  193,393     44,001   3,576 357,923
shareholders'                                                                                     
funds: 31                                                                                         
August 2006                                                                                       
                                                                                                  
Net recognised          -       -          -                 -   36,221    (5,810)       -  30,411
gains/(losses)                                                                                    
for the period                                                                                    
                                                                                                  
Repurchase of       (284)                284                    (6,286)          -         (6,286)
shares                                                                                            
                                                                                                  
Revenue after           -       -          -                 -        -          -     275     275
taxation                                                                                          
                                                                                                  
Dividend paid           -       -          -                 -        -          - (2,437) (2,437)
                                                                                                  
Closing            16,055  95,058        688             5,152  223,328     38,191   1,414 379,886
shareholders'                                                                                     
funds: 28                                                                                         
February 2007                                                                                     
                                                                                                  
                                                                                                  

Balance Sheet

                                               28.02.07 31.08.06  28.02.06
                                              unaudited  audited unaudited
                                                                          
                                                 £'000    £'000     £'000 
                                                                          
Fixed assets                                                              
                                                                          
Investments at fair value through profit or     388,446  376,383   384,930
loss                                                                      
                                                                          
Current assets                                                            
                                                                          
Debtors                                           3,136    2,491     3,515
                                                                          
Cash at bank                                     33,407   22,852     5,528
                                                                          
                                                 36,543   25,343     9,043
                                                                          
Creditors - amounts falling due within one                                
year                                                                      
                                                                          
Fixed rate unsecured loan                       (5,000)        -         -
                                                                          
Other creditors                                 (5,103)  (3,803)   (5,042)
                                                                          
                                               (10,103)  (3,803)   (5,042)
                                                                          
Net current assets                               26,440   21,540     4,001
                                                                          
Total assets less current liabilities           414,886  397,923   388,931
                                                                          
Creditors - amounts falling due after more                                
than one year                                                             
                                                                          
Fixed rate unsecured loans                     (35,000) (40,000)  (40,000)
                                                                          
Total net assets                                379,886  357,923   348,931
                                                                          
Capital and reserves                                                      
                                                                          
Called up share capital                          16,055   16,339    16,339
                                                                          
Share premium account                            95,058   95,058    95,058
                                                                          
Capital redemption reserve                          688      404       404
                                                                          
Other non-distributable reserve                   5,152    5,152     5,152
                                                                          
Capital reserve - realised                      223,328  193,393   149,904
                                                                          
Capital reserve - unrealised                     38,191   44,001    81,713
                                                                          
Revenue reserve                                   1,414    3,576       361
                                                                          
Total equity shareholders' funds                379,886  357,923   348,931
                                                                          
Net asset value per ordinary share:             591.53p  547.65p   533.89p
                                                                          

 


Cash Flow Statement

                                  28.02.07  31.08.06  28.02.06
                                 unaudited   audited unaudited
                                                                  
                                     £'000     £'000     £'000
                                                                  
Operating activities                                              
                                                                  
Investment income received           1,480     4,139     1,081    
                                                                  
Underwriting commission received         -        16         7    
                                                                  
Deposit interest received              852       695       117    
                                                                  
Investment management fee paid     (2,251)   (5,094)   (2,920)    
                                                                  
Directors' fees paid                  (45)      (85)      (49)    
                                                                  
Other cash payments                  (217)     (247)      (99)    
                                                                  
Net cash outflow from operating      (181)     (576)   (1,863)    
activities                                                        
                                                                  
Returns on investments and                                        
servicing of finance                                              
                                                                  
Interest paid                      (1,091)   (2,163)   (1,088)    
                                                                  
Net cash outflow from returns on   (1,091)   (2,163)   (1,088)    
investments and servicing of                                      
finance                                                           
                                                                  
Taxation                                                          
                                                                  
Overseas taxation recovered             11        50        27    
                                                                  
Taxation recovered                      11        50        27    
                                                                  
Financial investment                                              
                                                                  
Purchase of investments          (222,639) (280,761) (132,286)    
                                                                  
Disposal of investments            242,605   304,923   139,362    
                                                                  
Net cash inflow from financial      19,966    24,162     7,076    
investment                                                        
                                                                  
Equity dividend paid               (2,437)   (1,797)   (1,797)    
                                                                  
Net cash inflow before financing    16,268    19,676     2,355    
                                                                  
Financing                                                         
                                                                  
Repurchase of ordinary shares      (5,702)         -         -    
                                                                  
Net cash outflow from financing    (5,702)         -         -    
                                                                  
Increase in cash                    10,566    19,676     2,355    
                                                                  

 
1.   The results for the six months to 28 February 2007 and 28 February 2006,
which are unaudited, constitute non-statutory financial statements within the
meaning of s240 of the Companies Act 1985.  The figures and financial
information for the year ended 31 August 2006 are extracted from the latest
published financial statements.  These financial statements, on which the
auditors gave an unqualified report, have been delivered to the Registrar of
Companies.

2.  These 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 2006.

3.   The total column in the Income Statement is the profit and loss account of
the Company. 

4.   Returns per ordinary share are based on the revenue on ordinary activities
after taxation of £275,000 (31.08.06: return £2,385,000; 28.02.06: loss £
830,000), the capital return in the period of £30,411,000 (31.08.06: £
56,729,000; 28.02.06: £50,952,000) and on total return in the period of £
30,686,000 (31.08.06: £59,114,000; 28.02.06: £50,122,000) and on 64,968,965
ordinary shares (31.08.06: 65,356,053; 28.02.06: 65,356,053) being the weighted
average number of ordinary shares in issue during the period.

5.   NET ASSET VALUE PER ORDINARY SHARE

     The net asset value per ordinary share is based on net assets of £
379,886,000 (31.08.06:

£357,923,000; 28.02.06: £348,931,000) and on 64,221,173 ordinary shares
(31.08.06: 65,356,053;

28.02.06: 65,356,053), being the number of ordinary shares in issue at the
period end.

 

The half-yearly report and financial statements will be posted to shareholders
as soon as is 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.