Interim Results

FIDELITY SPECIAL VALUES PLC

Preliminary Announcement of Unaudited Interim Results

for the six months ended 28 February 2003

INTERIM REPORT

PERFORMANCE

During the first six months of the year the fully diluted net asset value of
our ordinary shares has fallen by 14.5% to 204.26p per share, a decline just a
little bit more than that of our benchmark (the FTSE All Share Index) which
fell by 14.0%. Over the period the market was weak and during February 2003 we
increased our borrowings by £5m, taking them to £25m because we felt that the
pessimism was overdone and that there were good investment opportunities for
our Manager to take advantage of. Although the portfolio itself outperformed
the benchmark, the net asset value slightly under-performed it, the gearing
being responsible for the difference.

The share price fell by 18.3% as the premium at which the shares sold in
relation to the net asset value narrowed from 6.0% to 1.8%.

MARKET REVIEW

At the beginning of this period markets were weak, suffering as they were from
a series of corporate scandal announcements in the United States. Investor
confidence in management integrity and the reporting of profits was badly
shaken by these revelations and the resulting weakness of US stock markets
affected markets in the rest of the world. By the beginning of October, markets
had fallen so far that a recovery took place in the weeks leading up to
Christmas. Since then, however, the prospect of war in Iraq made investors very
cautious and so the weakness of stock markets resumed. Until the war with Iraq
is finally over, it will not be possible to tell how much of the weakness was
caused by the fear of war and how much by the fear of another recession in the
United States.

PORTFOLIO MANAGER'S REPORT

There were no major changes at sector level during the period. The Manager
increased the Company's exposure to the shares of selected companies in the
non-life insurance sector, where the pricing environment continues to look
attractive. Insurance underwriters Wellington Underwriting performed well,
while Amlin's share price was boosted by news of a strong rise in premiums.
Elsewhere in the financial sector, the Company's holding in the French bank
Credit Lyonnais, which became the subject of intense takeover speculation
towards the end of 2002, was a strong contributor to overall performance. The
theme of corporate activity continued into early 2003 with the battle for food
retailer Safeway, the Company's largest holding.

Investments were made in some of the more high growth sectors, such as
biotechnology, support services and technology but reduced in the more
defensive sectors, such as tobacco and food producers. Paradoxically, the
current environment of uncertainty has thrown up a large number of undervalued
opportunities.

OUTLOOK

At the moment the UK's economy appears to be in rather better shape than those
of the other G7 countries. Although inflation has risen a little recently -
influenced by certain short term factors - the prospects for low inflation
remain good. Unemployment is low and the public sector is booming, aided and
abetted by massive increases in the Government's expenditures.

Investors' confidence however remains fragile, concerned as it is by the global
geopolitical situation generally and by the war in Iraq specifically, about the
global economy in the light of doubts about the American economy, about
consumer expenditure in the UK and about the effect of the increases in
taxation and regulation on corporate profits in the UK. At the time of writing
the worst of the war in Iraq appears to be over and investors can now focus on
economic and financial matters. Share prices have declined a long way over the
last three years, investors' expectations are low and the US Government is
taking strong measures to enhance growth in the US economy. Given these points,
we - both board and management - have assumed a rather more positive view about
the prospects of making money from a portfolio of carefully selected shares -
as our decision to increase our borrowings demonstrates.

By order of the Board

Fidelity Investments International

10 April 2003

Enquiries: Barbara Powley - Fidelity Investments International 01737 836883  

FIDELITY SPECIAL VALUES PLC

Statement of Total Return (incorporating the revenue account)

For the six months ended 28 February 2003

               for the six months ended      for the year ended       for the six months   
                                                                             ended         
                                                                                           
                       28.02.03                   31.08.02                 28.02.02        
                                                                                           
                       Unaudited                  audited                  unaudited       
                                                                                           
               revenue capital    total  revenue  capital    total  revenue capital  total 
                                                                                           
                £'000    £'000    £'000    £'000    £'000    £'000   £'000   £'000   £'000 
                                                                                           
Losses on            - (15,912) (15,912)        - (14,511) (14,511)       - (4,841) (4,841)
investments                                                                                
                                                                                           
Dividend         1,282        -    1,282    3,595        -    3,595   1,291       -   1,291
income                                                                                     
                                                                                           
Interest            35        -       35      149        -      149     101       -     101
income                                                                                     
                                                                                           
Underwriting         7        -        7       15        -       15       4       -       4
Commission                                                                                 
income                                                                                     
                                                                                           
Investment       (623)        -    (623)  (1,404)        -  (1,404)   (630)       -   (630)
management fee                                                                             
                                                                                           
Other expenses   (200)        -    (200)    (388)        -    (388)   (158)       -   (158)
                                                                                           
Exchange gains       -       61       61        -    (163)    (163)       -     (2)     (2)
/(losses)                                                                                  
                                                                                           
Net return/        501 (15,851) (15,350)    1,967 (14,674) (12,707)     608 (4,843) (4,235)
(loss) before                                                                              
finance costs                                                                              
and taxation                                                                               
                                                                                           
Interest         (715)        -    (715)  (1,409)        -  (1,409)   (682)       -   (682)
payable                                                                                    
                                                                                           
(Loss)/return    (214) (15,851) (16,065)      558 (14,674) (14,116)    (74) (4,843) (4,917)
on ordinary                                                                                
activities                                                                                 
before tax                                                                                 
                                                                                           
Tax on            (10)        -     (10)      (9)        -      (9)       5       -       5
ordinary                                                                                   
activities                                                                                 
                                                                                           
(Loss)/return    (224) (15,851) (16,075)      549 (14,674) (14,125)    (69) (4,843) (4,912)
on ordinary                                                                                
activities                                                                                 
after tax for                                                                              
the period,                                                                                
attributable                                                                               
to equity                                                                                  
shareholders                                                                               
                                                                                           
Dividends         (11)        -     (11)    (600)        -    (600)    (11)       -    (11)
                                                                                           
Transferred      (235) (15,851) (16,086)     (51) (14,674) (14,725)    (80) (4,843) (4,923)
from reserves                                                                              
                                                                                           
(Loss)/return                                                                              
per ordinary                                                                               
share                                                                                      
                                                                                           
Basic          (0.52)p (36.87)p (37.39)p    1.39p (37.08)p (35.69)p (0.18)p (12.60) (12.78)
                                                                                  p       p
                                                                                           
Fully-diluted        -        -        -    1.35p (36.16)p (34.81)p       -       -       -

These accounts have been prepared in accordance with the AITC Statement of
Recommended Practice (SORP) issued in December 1995.

FIDELITY SPECIAL VALUES PLC

Balance Sheet

As at 28 February 2003

                                     28.02.03     31.08.02     28.02.02
                                                                       
                                                   audited    unaudited
                                    unaudited                          
                                                                       
                                       £'000        £'000        £'000 

Fixed assets                                                          
                                                                      
Investments                          117,616      125,652      126,081
                                                                      
Current assets                                                        
                                                                      
Debtors                                  369          446        2,896
                                                                      
Cash at bank                             947        1,917          583
                                                                      
                                       1,316        2,363        3,479
                                                                      
Creditors- amounts falling due                                        
within one year                                                       
                                                                      
Other creditors                      (1,273)      (2,640)      (1,237)
                                                                      
Net current assets/(liabilities)          43        (277)        2,242
                                                                      
Total assets less current            117,659      125,375      128,323
liabilities                                                           
                                                                      
Creditors - amounts falling due                                       
after more than one year                                              
                                                                      
Fixed rate unsecured loan           (25,000)     (20,000)     (20,000)
                                                                      
Total net assets                      92,659      105,375      108,323
                                                                      
Capital and reserves                                                  
                                                                      
Called up share capital               10,919       10,526        9,920
                                                                      
Share premium account                 40,595       37,731       31,482
                                                                      
Capital redemption reserve               404          404          404
                                                                      
Other reserves                                                        
                                                                      
Warrant exercise reserve               1,741        1,586        1,586
                                                                      
Warrant reserve                          928          970          971
                                                                      
Capital reserve - realised            66,803       69,265       63,048
                                                                      
Capital reserve - unrealised        (29,777)     (16,388)        (340)
                                                                      
Revenue reserve                        1,046        1,281        1,252
                                                                      
Total equity shareholders' funds      92,659      105,375      108,323
                                                                      
Net asset value per ordinary                                          
share                                                                 
                                                                      
Basic                                212.15p      250.28p      272.99p
                                                                      
Fully-diluted                        204.26p      238.87p      259.11p

 

 

FIDELITY SPECIAL VALUES PLC

Cash Flow Statement

For the six months ended 28 February 2003

                                      28.02.03    31.08.02     28.02.02
                                                                       
                                     unaudited     audited    unaudited
                                                                       
                                         £'000       £'000        £'000

Operating activities                                                   
                                                                       
Investment income received                  937      2,424          946
                                                                       
Underwriting commission received              7         15            4
                                                                       
Deposit interest received                    23        117           83
                                                                       
Investment management fee paid            (651)    (1,412)        (649)
                                                                       
Directors' fees paid                       (34)       (59)         (33)
                                                                       
Other cash payments                       (178)      (334)         (52)
                                                                       
Net cash inflow from operating              104        751          299
activities                                                             
                                                                       
Returns on investments and                                             
servicing of finance                                                   
                                                                       
Interest paid                             (714)    (1,376)        (668)
                                                                       
Net cash outflow from servicing           (714)    (1,376)        (668)
of finance                                                             
                                                                       
Taxation                                                               
                                                                       
UK income tax recovered                       -          9            9
                                                                       
Tax recovered                                 -          9            9
                                                                       
Financial investment                                                   
                                                                       
Purchase of investments                (41,184)   (78,730)     (35,724)
                                                                       
Exchange gains/(losses)                      59      (163)          (2)
                                                                       
Disposal of investments                  32,965     61,925       24,080
                                                                       
Net cash outflow from financial         (8,160)   (16,968)     (11,646)
investment                                                             
                                                                       
Equity dividend paid                      (600)      (950)        (950)
                                                                       
Net cash outflow before financing       (9,370)   (18,534)     (12,956)
                                                                       
Financing                                                              
                                                                       
Exercise of warrants                        151        816          817
                                                                       
Fixed rate 6.42% unsecured loan               -     10,000       10,000
drawn down                                                             
                                                                       
Fixed rate 4.91% unsecured loan           5,000          -            -
drawn down                                                             
                                                                       
Repayment of fixed rate 5.65%                 -    (4,000)      (4,000)
unsecured loan                                                         
                                                                       
Repayment of fixed rate 5.9704%               -    (6,000)      (6,000)
unsecured loan                                                         
                                                                       
Issue of ordinary shares                  3,249     10,222        3,309
                                                                       
Net cash inflow from financing            8,400     11,038        4,126
                                                                       
Decrease in cash                          (970)    (7,496)      (8,830)

The figures and financial information for the year ended 31 August 2002 have
been extracted from the latest published accounts of the Company and do not
constitute the statutory accounts for that year. Those accounts have been
delivered to the Registrar of Companies and included the report of the
auditors, which was unqualified and did not contain a statement under either
section 237(2) or 237(3) of the Companies Act 1985.

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