Interim Results

Fidelity European Values PLC
23 August 2001



FIDELITY EUROPEAN VALUES PLC

Preliminary Announcement of Unaudited Results

For the six months ended 30 June 2001

Comment from the Chairman


Performance

In the period under review the net asset value per share of your Company fell
by 10.4% compared to a fall of 13.7% in the FTSE Europe (ex UK) Index. (All
figures are in sterling and are on a total return basis). This is a somewhat
harsh reflection of the Manager's performance as this includes the
crystallisation of the dilution effect of the warrants, which were converted
into ordinary shares with effect from 30 April. When compared with the fully
diluted net asset value at 31 December 2000, the net asset value fell by 4.5%
in the period which we believe is a fairer reflection of the situation. The
share price rose by 2.3% over the period reflecting a narrowing in the
discount. The Company was the only trust in the AITC's European sector that
maintained its value in the year to 30 June 2001 (Source: AITC monthly
information statistics 30 June 2001). We congratulate the Manager on this
performance. A detailed review of the performance of the portfolio is provided
in the Manager's Review.


Outlook

It has now become apparent that the European economy's growth rate is slowing,
partially due to the US economic downturn. Consensus data suggests that the
outlook for companies in continental Europe is likely to improve in 2002 and
this should provide a good environment for stockpickers.


Continuation Vote

At the last AGM, the shareholders voted for the Company to continue as an
investment trust for a further two years, with 99.6% of the votes for the
resolution and 0.4% against.


Company Gearing

The Company announced on 23 May 2001 that it had entered into a loan agreement
with National Australia Bank. This loan is for an amount of 40 million euros
at a fixed all in rate of 5.54% for a period of five years and will be drawn
down on 31 December 2001 (repayment date 29 December 2006). It is the Board's
current intention that the Company will enter into a second loan agreement in
the year which, together with this loan, will replace the Equity Index-Linked
Loan Stock, which was issued for a fixed period and is due to be repaid on 31
December 2001.

Directorate

Sir Charles Fraser retired as Chairman and director of the Company at the
Annual General Meeting in May and I am honoured to have been appointed as
Chairman in his place. We are greatly indebted to him for his valuable
contribution to the Company in the first ten years of its life.



Robert Walther

Chairman

23 August 2001



Investment Manager's Report

Market performance

European equity bourses, as represented by the FTSE Europe ex-UK Index,
declined 13.7% (all market numbers are in sterling terms) during the first six
months of 2001. Economic data pointed to a steeper than expected slowdown and
the gloomier outlook was reflected in a spate of corporate profit warnings and
earnings downgrades across the region, including high profile companies such
as Ericsson and Nokia. The Irish exchange was the best performer, up 9.9%.
Finland and Sweden posted the largest falls, down 41.1% and 23.6%
respectively.

Information technology and telecommunication stocks continued to suffer from
poor investor sentiment. Profit warnings and concerns over rising debt levels
pushed these sectors to new lows.

The German economy grew by 0.5% in the first quarter of 2001 and German
manufacturing fell in June to its lowest level in two years. The Italian
economy held up somewhat better against the global economic slowdown, rising
by 0.7%.

Inflationary pressures mounted in the twelve countries that share the euro.
Consumer prices rose sharply by 2.9% from the previous year, exceeding the 2%
inflation target set by the European Central Bank (ECB). It noted that high
oil prices and the weakness in the euro had started to affect inflation. In
June, however, consumer price rises did moderate.

In May, the ECB cut interest rates for the first time in 2001 by a quarter of
one percentage point to 4.5%, observing that the outlook for lower inflation
had improved amid signs of slowing job creation and gross domestic product
growth in member states. Employment conditions deteriorated for the most part
as the period progressed; particularly in Germany, the region's largest
economy. The more pessimistic outlook for euroland led its single currency to
weaken. The euro slid 3.2% against the US dollar and 4.4% against the yen.

Portfolio Review

The portfolio remained biased towards medium-sized and larger small companies.
The proportion that was invested in larger companies in excess of £3 billion
was approximately 30%. Medium-sized to smaller companies outperformed larger
ones, as well as the broader market.

The Manager invests in companies that meet his criteria. They are selected on
their individual merits, rather than broad countrywide economic conditions. As
a result, geographic and sector allocations continue to be determined by stock
selection.

The portfolio began the year with a relatively higher exposure than the
benchmark to the media, consumer, transportation and pharmaceutical sectors.
This remained true at the end of June 2001, except for pharmaceuticals, where
the Company had moved to a lower relative exposure. Underweight positions were
maintained in information technology, telecommunications and banks.

As a result of stock selection, the portfolio finished the review period with
exposures to the Norwegian, Irish, Finnish and Swedish markets relatively
higher than the benchmark, but underweight in Swiss, French and Italian
stocks. The portfolio has generally had a higher relative exposure to
countries where companies focus on shareholder value.


Portfolio performance

The portfolio performed well over the period. Most of this could be attributed
to stock selection. Swedish Match, a major producer of non-smoking tobacco
products, is one of the Company's largest holdings and was a major
contributor. The business is growing well and its management is highly
motivated, with executive remuneration based on company performance.

The Company had a lower exposure to banks than the benchmark index, because of
few buying opportunities. This had a marginally negative impact on its
performance, although the individual stocks selected performed well. The same
was true for stocks held in the life assurance sector.

Bank of Ireland was one of the largest holdings in the portfolio throughout
the report period and was a major contributor to its overall performance.
Though one of the lower-valued banks in Europe, it appeared to have better
than average growth prospects as the Irish economy continued to outstrip all
others in the eurozone. Bank of Ireland also benefited from Ireland's low rate
of corporation tax compared with the rest of Europe. Irish Life & Permanent
was also a positive contributor to returns.

The holding in Wella, the German manufacturer of hair care products, performed
well as demand for its products amongst an ageing population continued to
grow. Generally, the portfolio benefited from having a relatively low exposure
to telecommunications and IT shares. The exposure to these sectors was
significantly reduced in 2000. Many high profile companies in the sector
reported disappointing results, particularly mobile telephone firms.

Media stocks provided the Manager with a number of interesting opportunities,
even though the poor performance of the sector overall hurt performance. Media
companies had the advantage of deriving most of their earnings from domestic
markets, and thereby avoided the volatility of international conditions.

The wide diversity of companies in European markets was an ideal environment
for the stock-picker, which helped the portfolio. Its strong value bias and
focus on medium-sized and smaller companies aided the company's performance.


Outlook

European economies are growing more strongly than the US, though recent data
indicate that they are slowing rapidly. They are clearly being affected by the
US led global economic slowdown. Manufacturing in particular is suffering yet
inflation remains above the ECB's 2% target. However, there have been
encouraging signs that inflation is falling in France and Germany. This has
led to increased speculation that the central bank will soon reduce rates,
which has benefited the euro. Much will depend on the timing of the US
economic recovery. A stronger euro and lower inflation should give the ECB
more room for manoeuvre.

Investors remain cautious and a sustained recovery in equity markets is not
likely before an improvement in the outlook for the economy and corporate
earnings. Nevertheless, the more defensive areas of the market continue to
benefit from investor interest amidst the uncertainty. Interesting
opportunities are arising in the peripheral eurozone economies, which have
benefited from the ECB's monetary policy. Meanwhile companies across the
region are becoming increasingly 'shareholder friendly'.


Enquiries: Barbara Powley

Fidelity Investment International

01737 836883



FIDELITY EUROPEAN VALUES PLC

Statement of Total Return (incorporating the revenue account)
For the six months ended 30 June 2001

                    for the six months ended          for the year ended
                                                           (restated)
                            30.06.01                        31.12.00
                           unaudited                        audited 
                                                                              
                  revenue   capital      total     revenue   capital   total  
                   £'000      £'000      £'000     £'000     £'000     £'000 
 
  (Losses)/gains       -    (28,640)   (28,640)         -    66,149    66,149 
  on                                                                          
  investments                                                                 
  Income            8,355         -       8,355     7,927        -      7,927 
  Investment      (2,260)         -     (2,260)   (4,701)        -    (4,701) 
  management                                                                  
  fee                                                                         
  Other             (291)         -       (291)     (746)          -    (746) 
  expenses                                                                    
  Exchange             -         112        112         -        61        61 
  gains                                                                       
  Repurchase of         -      (928)      (928)         -     (303)     (303) 
  warrants                                                                    
  Net               5,804   (29,456)   (23,652)     2,480    65,907    68,387 
  return/(loss)                                                               
  before                                                                      
  finance costs                                                               
  and taxation                                                                
  Interest          (503)         -       (503)     (950)        -      (950) 
  payable                                                                     
  Revaluation           -      8,546      8,546         -     (106)     (106) 
  of Loan Stock                                                               
  Return/(loss)     5,301   (20,910)   (15,609)     1,530    65,801    67,331 
  on ordinary                                                                 
  activities                                                                  
  before tax                                                                  
  Tax on          (1,956)         -     (1,956)     (908)          -    (908) 
  ordinary                                                                    
  activities                                                                  
  Return/(loss)     3,345   (20,910)   (17,565)       622    65,801    66,423 
  on ordinary                                                                 
  activities                                                                  
  after tax for                                                               
  the period,                                                                 
  attributable                                                                
  to equity                                                                   
  shareholders                                                                
  Dividend               -          -          -    (350)          -    (350) 
  Transfer to       3,345   (20,910)   (17,565)       272    65,801    66,073 
  reserves                                                                    
  Return/(loss)                                                               
  per ordinary                                                                
  share                                                                       
  Basic             5.59p   (34.93p)   (29.34p)     1.07p   113.09p   114.16p 
  Fully-diluted         -          -          -     1.00p   105.92p   106.92p 
 
 

                                                   
                                                 for the six months ended
                                                         (restated)
                                                          30.06.00
                                                          unaudited 
                                                                              
                                              revenue     capital      total  
                                                £'000       £'000      £'000  
  (Losses)/gains on investments                     -       53,442     53,442 
  Income                                         5,421          -       5,421 
  Investment management fee                    (2,305)          -     (2,305) 
  Other expenses                                 (395)            -     (395) 
  Exchange gains                                    -          337        337 
  Repurchase of warrants                            -        (303)      (303) 
  Net return/(loss) before finance costs         2,721      53,476     56,197 
  and taxation                                                                
  Interest payable                               (462)          -       (462) 
  Revaluation of Loan Stock                          -     (3,056)    (3,056) 
  Return/(loss) on ordinary activities           2,259      50,420     52,679 
  before tax                                                                  
  Tax on ordinary activities                     (478)          -       (478) 
  Return/(loss) on ordinary activities           1,781      50,420     52,201 
  after tax for the period, attributable                                      
  to equity shareholders                                                      
  Dividend                                            -           -          -
  Transfer to reserves                           1,781      50,420     52,201 
  Return/(loss) per ordinary share                                            
  Basic                                          3.07p      86.91p     89.98p 
  Fully-diluted                                  2.87p      81.24p     84.11p 


These accounts have been prepared in accordance with the AITC Statement of
Recommended Practice (SORP) issued in December 1995. Figures for the year
ended 30 December 2000 and for the six months ended 30 June 2000 have been
restated.



FIDELITY EUROPEAN VALUES PLC

Balance Sheet
As at 30 June 2001

                                             30.06.01   31.12.00     30.06.00
                                            unaudited    audited    unaudited 
                                                £'000      £'000        £'000  
           
                                                                              
  Fixed assets                                                                
  Investments                                 384,059     407,720     400,997 
  Current assets                                                              
  Debtors                                       4,049       1,247       6,097 
  Cash at bank                                 13,602      11,761       7,344 
                                               17,651      13,008      13,441 
  Creditors- amounts falling due within                                       
  one year                                                                    
  Equity Index-Linked Unsecured Loan         (51,055)    (59,601)           - 
  Stock                                                                       
  Other creditors                             (4,611)     (2,020)     (6,652) 
                                             (55,666)    (61,621)     (6,652) 
  Net current (liabilities)/assets           (38,015)    (48,613)       6,789 
  Total assets less current liabilities       346,044     359,107     407,786 
  Creditors- amounts falling due after                                        
  more than one year                                                          
  Equity Index-Linked Unsecured Loan                -           -    (62,551) 
  Stock                                                                       
  Total net assets                            346,044     359,107     345,235 
  Capital and reserves                                                        
  Called up share capital                      15,708      14,588      14,588 
  Capital redemption reserve                       37          37          37 
  Share premium account                        56,813      51,511      51,511 
  Other reserves                                                              
  Warrant reserve                                   -       1,920       1,920 
  Capital reserve - realised                  264,298     256,850     237,249 
  Capital reserve - unrealised                  3,866      32,224      36,444 
  Revenue reserve                               5,322       1,977       3,486 
  Total equity shareholders' funds            346,044     359,107     345,235 
  Net asset value per ordinary share                                          
  Basic                                       550.75p     615.40p     591.63p 
  Fully-diluted                                    -      576.97p     554.97p 



The balance sheet as at 31 December 2000 has been extracted from the accounts
for the year ended 31 December 2000 which have been delivered to the Registrar
of Companies and on which the auditors gave an unqualified report.



FIDELITY EUROPEAN VALUES PLC

Cash Flow Statement
For the six months ended 30 June 2001


                                            30.06.01   31.12.00     30.06.00
                                           unaudited    audited    unaudited 
                                               £'000      £'000        £'000 
           

                                                                              
  Operating activities                                                        
  Investment income                           6,465        5,229        3,947 
  Deposit interest received                     118          285          124 
  Investment management fee                 (2,341)      (4,506)      (2,149) 
  Directors' fees                              (20)         (40)         (22) 
  Other cash payments                         (395)        (662)        (427) 
  Net cash inflow from operating              3,827          306        1,473 
  activities                                                                  
  Returns on investments and servicing                                        
  of finance                                                                  
  Interest paid                               (501)      (1,122)        (635) 
  Net cash outflow from returns on             (501      (1,122)        (635) 
  investments and servicing of finance                                        
                                                                              
  Taxation                                                                    
  Overseas tax recovered                          -          480            - 
  UK income tax recovered                         1          408          414 
  UK income tax paid                           (54)            -          (6) 
  ACT recovered                                   -           86           86 
  Tax (paid)/recovered                         (53)          974          494 
  Financial investment                                                        
  Purchase of investments                 (130,675)    (281,833)    (163,843) 
  Exchange gains/(losses)                       348        (145)          233 
  Disposal of investments                   125,962      291,104      167,318 
  Net cash (outflow)/inflow from            (4,365)        9,126        3,708 
  financial investment                                                        
  Equity dividend paid                        (350)        (347)        (347) 
  Net cash (outflow)/inflow before          (1,442)        8,937        4,693 
  financing                                                                   
  Financing                                                                   
  Repurchase of warrants                    (1,030)        (340)        (340) 
  Exercise of warrants                        4,452          502          502 
  Issue of ordinary shares                      151            -            - 
  Net cash inflow from financing              3,573          162          162 
  Increase in cash                            2,131        9,099        4,855 



Copies of the interim report will be posted to shareholders as soon as
practicable. Copies will also be available to the public at the Company's
registered office Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey KT20 6RP