Fidelity Special Values plc- Annual Financial Report

FIDELITY SPECIAL VALUES PLC

Final Results for the year ended 31 August 2021

Financial Highlights:

• The Board of Fidelity Special Values PLC (the “Company”) recommends a final dividend of 4.50 pence which together with the interim dividend payment of 2.17 pence per share (totalling 6.67 pence) represents an increase of 15% over the dividend of 5.80 pence paid in the prior year.

• The net asset value (“NAV”) of the Company increased by +56.2% for the year ended 31 August 2021, outperforming the Benchmark Index, which returned +26.9%.

• As a result of the Company’s +73.8% share price performance, the level of discount narrowed from 9.1% at the start of the reporting year to a premium of 1.2% as at 31 August 2021.

• Performance figures over Alex Wright’s tenure as Portfolio Manager are also strong, with a NAV return of +196.2% and a share price return of +257.1%, compared to a Benchmark Index return of +90.8%. The strong long term performance of the Company has enabled it to expand the Shareholder base through the issuance of a significant number of shares.

• While the UK market has looked cheap over the past five years, the key differentiator in 2021 compared to prior years is that fundamentals on the ground look very good.

CHAIRMAN’S STATEMENT

The year under review was an extraordinary one, in terms of the global and external factors affecting the companies in which we invest, the broader market, the daily lives of our Shareholders, and their personal investments. This in turn led to extraordinary changes in investor confidence and sentiment leading to a remarkable, if uneven, recovery of asset prices.

Last year I wrote of the challenges posed by COVID-19, and it is therefore with a sense of relief, even hope, that we can reflect on improving prospects for a global recovery from the virus and its consequential social, economic and market impacts and how this may play out in the UK.

The Company aims to achieve long term capital growth for Shareholders by investing in ‘special situations’ and the last year has resulted in an abundance of such opportunities. The investment trust is primarily invested in UK equities, but may invest up to 20% of total net assets outside of UK companies. The portfolio consists of around 80-120 positions and the Portfolio Manager’s strategy invests across the market capitalisation spectrum, usually with an overweight to medium sized and smaller companies. It is an actively managed contrarian strategy that seeks out undervalued opportunities – this typically means investing in companies that have underperformed and where there is little or no value ascribed to any recovery potential.

By building a portfolio of stocks that are at different stages of their recovery process, the intention is to deliver outperformance across different market environments.