Interim Results
FIDELITY SPECIAL VALUES PLC
Preliminary Announcement of Unaudited Interim Results
for the six months ended 28 February 2005
INTERIM REPORT
Performance: NAV +19.9% to 410.0p per share
During the first half of the current year, the net asset value of the ordinary
shares increased by 19.9% to 410.0p, while the share price rose a little more,
increasing by 21.3% to 422p. At the half-year end, 28 February 2005, the shares
were selling at a premium of 2.9% to the underlying net asset value.
The stock market - as measured by the benchmark, the FTSE All-share Index -
performed consistently well, rising in each and every month and ending the
period 12.7% higher. The net asset value outperformance relative to the
benchmark is mainly attributable to good stock selection by the Manager and to
the gearing, adding circa 16p per share (4.8%) and 13p (3.8%) respectively to
the net asset value ('NAV').
NAV at 31 August 2004 341.9p
Impact of: Stock market +43.4p +12.7%
Stock Selection +16.3p +4.8%
Gearing +13.2p +3.8%
Other, including -4.8p -1.4%
costs
NAV at 28 February 2005 410.0p +19.9%
The portfolio's performance benefited particularly from its exposure to
holdings within two sectors, the Oil & Gas Sector, with the holdings in BP and
BG making important contributions, and the Media & Entertainment Sector with
the holdings in Yell and ITV contributing to its performance. The breadth of
the stock market's rise meant that there were no sectors which particularly
hurt the performance of the portfolio, although the holding in Cairn Energy
suffered following some disappointing drilling news it remains as the top
contributor over a 12 month period.
The sector distribution of the portfolio was much the same at the end of the
period as it had been at the beginning of the year - with the exposure to the
Oil & Gas (19.3% of total assets) and Media & Entertainment (13.7%) sectors
being the largest two. Eight of the top ten holdings in the portfolio at the
year end remained in the top ten at the half year end; the holdings in Rank
Organisation and MM02 gave way to holdings in Statoil, the Norwegian oil & gas
company and to BT, the telecommunications company.
Borrowings: £40 million (+£7m)
Two of the borrowing facilities, amounting to £20 million, fell due for
repayment in January 2005. Their repayment was financed with a new 5 year loan
for £20 million fixed at a lower rate of 5.4% per annum and at the same time a
new facility for £7 million was established on the same terms. At the end of
February 2005, the total borrowings amounted to £40 million and represented
15.0% of shareholders' funds. It is the Board's policy to have gearing of
between 15% and 20% in normal circumstances.
Outlook:
It is a little difficult to make predictions about the future course of the
economy and the stock market two weeks ahead of a general election, although
there does not seem to be much doubt in most commentators' minds about the
outcome. The global economy continues to do well, driven largely by the
economies of the United States and China. In both those cases there are some
causes for concern but growth for 2005 at least seems reasonably assured.
Interest rates in most of the major economies are rising - with the notable
exception of the Euro Zone and Japan - which will act as a restraint on growth
but hopefully not a brake. All the major economies are running public sector
budget deficits which tend to act as a stimulant. The British economy is
obviously affected by these influences and has certain ones of its own. It
would appear that there is likely to be a further rise in taxes after the
election and interest rates are higher than they have been. However the British
economy still remains internationally competitive and is performing rather
better than most of those in Continental Europe.
The UK Stock Market has made a good recovery from the lows established in March
2003 when the FTSE All-share Index reached 1593.3; at the end of February,
nearly two years later it stood at 2,495.5, 57% above the low. Corporate
profits have proved to be quite robust and valuations are not unreasonable,
although there are variations within the valuation spectrum. All things
considered the stock market appears to be providing some good opportunities to
make money.
By order of the Board
Fidelity Investments International
21 April 2005
Enquiries: Barbara Powley - Fidelity Investments International 01737 836883
Stephen Westwood - Fidelity Investments International 020 7961 4477
CB22349
FIDELITY SPECIAL VALUES PLC
Statement of Total Return (incorporating the revenue account) of the Company
for the six months ended for the year ended for the six months
ended
28.02.05 31.08.04 29.02.04
unaudited audited restated (1)
unaudited
revenue capital total revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on - 43,941 43,941 - 30,404 30,404 - 32,560 32,560
investments
Dividend income 2,420 - 2,420 5,362 - 5,362 1,402 - 1,402
Interest income 153 - 153 212 - 212 108 - 108
Underwriting 5 - 5 17 - 17 17 - 17
commission income
Investment (1,611) - (1,611) (2,238) - (2,238) (816) - (816)
management fee
Other expenses (238) - (238) (434) - (434) (244) - (244)
Exchange losses - (11) (11) - (43) (43) - (36) (36)
Net return before 729 43,930 44,659 2,919 30,361 33,280 467 32,524 32,991
finance costs and
taxation
Interest payable (1,154) - (1,154) (1,965) - (1,965) (894) - (894)
(Loss)/return on (425) 43,930 43,505 954 30,361 31,315 (427) 32,524 32,097
ordinary
activities before
taxation
Taxation on 17 - 17 (68) - (68) (7) - (7)
ordinary
activities
(Loss)/return on (408) 43,930 43,522 886 30,361 31,247 (434) 32,524 32,090
ordinary
activities after
taxation for the
period
attributable to
equity
shareholders
Dividend (8) - (8) (890) - (890) (2) - (2)
Transfer (from)/ (416) 43,930 43,514 (4) 30,361 30,357 (436) 32,524 32,088
to reserves
(Loss)/return per
ordinary share
Basic (0.64p) 68.37p 67.73p 1.55p 52.98p 54.53p (0.96p) 72.34p 71.38p
These accounts have been prepared in accordance with the AITC Statement of
Recommended Practice (SORP) issued in January 2003. FIDELITY SPECIAL VALUES PLC
Balance Sheet
28.02.05 31.08.04 29.02.04
unaudited audited restated (1)
unaudited
£'000 £'000 £'000
Fixed assets
Investments 306,298 251,138 244,034
Current assets
Debtors - amounts falling due 3,450 3,470 4,267
within one year
Cash at bank 895 1,007 5,496
4,345 4,477 9,763
Creditors - amounts falling due
within one year
Fixed rate unsecured loans - (20,000) (20,000)
Other creditors (3,287) (5,758) (6,068)
(3,287) (25,758) (26,068)
Net current assets/(liabilities) 1,058 (21,281) (16,305)
Total assets less current 307,356 229,857 227,729
liabilities
Creditors - amounts falling due
after more than one year
Fixed rate unsecured loans (40,000) (13,000) (13,000)
Total net assets 267,356 216,857 214,729
Capital and reserves
Called up share capital 16,301 15,855 15,583
Share premium account 94,462 87,923 84,336
Capital redemption reserve 404 404 404
Other reserves
Other non-distributable reserve 5,152 5,152 5,152
Capital reserve - realised 96,979 82,169 70,552
Capital reserve - unrealised 53,264 24,144 37,924
Revenue reserve 794 1,210 778
Total equity shareholders' funds 267,356 216,857 214,729
Net asset value per ordinary share:
Basic 410.02p 341.94p 344.50p
FIDELITY SPECIAL VALUES PLC
Cash Flow Statement
28.02.05 31.08.04 29.02.04
unaudited audited restated (1)
unaudited
£'000 £'000 £'000
Operating activities
Investment income received 1,193 2,903 943
Underwriting commission 5 17 17
received
Interest received 100 134 70
Investment management fee paid (1,532) (2,080) (680)
Directors' fees paid (30) (64) (31)
Other cash payments (136) (468) (52)
Net cash (outflow)/inflow from (400) 442 267
operating activities
Returns on investments and
servicing of finance
Interest paid (1,159) (1,905) (846)
Net cash outflow from returns (1,159) (1,905) (846)
on investments and servicing of
finance
Financial investment
Purchase of investments (107,810) (194,591) (97,206)
Disposals of investments 96,177 175,555 85,691
Net cash outflow from financial (11,633) (19,036) (11,515)
investment
Equity dividend paid (896) (457) (457)
Net cash outflow before (14,088) (20,956) (12,551)
financing
Financing
Exercise of warrants - 3,309 3,309
5.655% fixed rate unsecured - 8,000 8,000
loan drawn down
5.435% fixed rate unsecured 27,000 - -
loan drawn down
7.82% fixed rate unsecured loan (10,000) - -
repaid
6.42% fixed rate unsecured loan (10,000) - -
repaid
Issue of ordinary shares 6,976 8,495 4,574
Cash element from issue of - 931 931
shares to shareholders of
Govett Strategic Trust and The
Derby Trust
Issue costs relating to issue - (454) (454)
of shares to shareholders of
Govett Strategic Trust and The
Derby Trust
Net cash inflow from financing 13,976 20,281 16,360
(Decrease)/increase in cash (112) (675) 3,809
1. The accounting presentation of the issue of shares to shareholders in Govett
Strategic Trust and The Derby Trust undertaken in the six months to 29 February
2004 has been restated to be consistent with that in the annual audited
accounts for the year ended 31 August 2004. As explained in the annual audited
accounts, issue costs of £454,000 previously shown as revenue expenses in the
interim accounts for the six months to 29 February 2004 have been offset
against share premium and the revenue return for that interim period is
restated to a loss of £434,000. Cash flows associated with the issue of shares
have also been restated in line with the presentation in the annual audited
accounts but there is no change to the net asset value as at 29 February 2004.
2. The figures and financial information for the year ended 31 August 2004 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.
3. 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.
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