FIDELITY
SPECIAL VALUES
PLC
Annual Report for the year ended 31 August 2025
Investment Objective and Overview
Fidelity Special Values PLC aims to achieve long-term capital
growth primarily through investment in equities (and their related
financial instruments) of UK companies which the Investment
Manager believes to be undervalued or where the potential has
not been recognised by the market.
The Company aims to
achieve long-term capital
growth for shareholders
by investing in ‘special
situations’. It primarily invests
in companies listed in the
UK, but can invest up to 20%
of the portfolio in companies
listed on overseas
exchanges.
Contrarian stock-picking
approach – The Portfolio
Manager, Alex Wright, looks
for unloved companies
that are entering a period
of positive change that
the market has not yet
recognised. He follows a
highly disciplined investment
process that focuses first on
evaluating downside risk and
then on identifying positive
change and potential upside.
The focus is first and foremost
on downside protection.
Alex’s philosophy is to
base investment decisions
on company fundamentals
rather than top-down factors
(market or macroeconomic
drivers).
Leveraging Fidelity’s global
research platform – This
contrarian approach is
research intensive in order to
identify and gain conviction
in opportunities that are out
of favour with other investors.
The depth of Fidelity’s
research ensures that there
is a sufficient number of
strong investment ideas to
build a diversified portfolio
at all points of the market
cycle.
Performance – In the
reporting year, the
Company’s net asset value
total return was +14.3% and
the share price total return
was +21.8%, compared to
the FTSE All-Share Index
(Benchmark) return of +12.6%.
Dean Buckley,
Chairman
At a Glance
In the reporting year, the Company’s net asset value per ordinary
share increased by 14.3% and the share price by 21.8%, whilst the
Benchmark increased by 12.6% (all performance data on a total
return basis).
Fidelity Special Values PLC
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Annual Report 2025
2021
2022
2023
2024
2025
Net Asset Value per Ordinary Share total return
1, 2
+56.2%
-4.4%
+5.9%
+14.3%
Year ended 31 August
+24.1%
2021
2022
2023
2024
2025
Ordinary Share Price total return
1, 2
+73.8%
-13.5%
+5.6%
Year ended 31 August
+24.3%
+21.8%
0
2
4
6
8
10
20252024202320222021
Dividends per Ordinary Share
6.84p
6.67p
7.75p
Year ended 31 August
8.80p
9.54p
2021
2022
2023
2024
2025
FTSE All-Share Index (Benchmark) total return
1
+26.9%
+1.0%
+5.2%
Year ended 31 August
+17.0%
+12.6%
1 Includes reinvested income.
2 Alternative Performance Measures (see pages 91 and 92).
As at 31 August 2025
Shareholders’ Funds
£1,267.2m
Market Capitalisation
£1,227.6m
Capital Structure
Ordinary Shares of 5 pence each
323,048,920
Summary of the key aspects
of the Investment Policy
The investment approach is flexible, with positions in large,
medium and smaller sized companies, across all industries.
The Company may make limited investments in companies
outside the UK.
The Company may also invest in other transferable securities,
collective investment schemes, money market instruments, cash
and deposits, and is also able to use derivatives for efficient
portfolio management and investment purposes.
The Company is able to gear the portfolio and the Board
takes the view that long-term returns for shareholders can be
enhanced by the use of gearing in a carefully considered and
monitored way.
2025 2024
Assets at 31 August
Shareholders’ funds £1,267.2m £1,143.5m
Net Asset Value (“NAV”) per ordinary share
1
392.26p 352.84p
Dividends for the year to 31 August
Final dividend proposed per ordinary share 6.84p 6.30p
Interim dividend paid per ordinary share 3.36p 3.24p
Total dividends proposed and paid for the year 10.20p 9.54p
Share price and discount data for the year ended 31 August
Share price at the year end 380.00p 321.50p
Share price: year high 388.50p 334.00p
Share price: year low 295.50p 252.50p
Discount at the year end
1
3.1% 8.9%
Discount: year high 10.6% 10.0%
Discount: year low 2.3% 4.8%
Ongoing Charges for the year ended 31 August
1,2
0.68% 0.70%
1 Alternative Performance Measures (see pages 91 and 92).
2 Ongoing Charges (excluding finance costs and taxation) expressed as a percentage of the average net asset values for the year (prepared in accordance with guidance
issued by the Association of Investment Companies (“AIC”)). A definition of Ongoing Charges is in the Glossary of Terms on page 94.
Total Return Performance
1
(%)
10 years5 years3 years1 year
+14.3
+21.8
+12.6
+50.2
+59.9
+124.3
+140.4
+77.7
+38.6
+147.3
+146.8
+108.5
NAV per ordinary share
Share price
FTSE All-Share Index (Benchmark)
Periods ended 31 August 2025.
1 Includes reinvested income.
Financial Highlights
Sources: Fidelity and Datastream.
Past Performance is not a guide to future returns.
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Fidelity Special Values PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Contents
Strategy
Chairman’s Statement 02
Portfolio Manager’s Review 07
Spotlight on the Top 10 Holdings 11
Portfolio Listing 13
Distribution of the Portfolio 17
Ten Year Record 19
Summary of Performance Charts 20
Attribution Analysis 22
Strategic Report 23
Governance
Board of Directors 33
Directors’ Report 34
Corporate Governance Statement 39
Directors’ Remuneration Report 43
St
atement of Directors’ Responsibilities
46
Re
port of the Audit Committee
47
Financial
Independent Auditor’s Report 50
Income Statement 57
Balance Sheet 58
Statement of Changes in Equity 59
Cash Flow Statement 60
Notes to the Financial Statements 61
Alternative Performance Measures 81
Financial Calendar 83
Information for Shareholders
Notice of Meeting 84
Shareholder Information 88
Data Protection 90
Alternative Investment Fund Manager’s Disclosure 91
Glossary of Terms 93
Chairman’s Statement
Read more on pages 02 to 06
Portfolio Manager’s Review
Read more on pages 07 to 10
Ten Year Record
Read more on page 19
Share Price as at 31 August
2023
2024
2025
380.00p
321.50p
267.50p
Spotlight on the Top 10 Holdings
Read more on pages 11 and 12
02
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Chairman’s Statement
In last year’s Annual Report I noted that, despite potentially
destabilising world events such as the conflicts in Ukraine
and Gaza and the forthcoming US presidential election,
there was a growing feeling of normalisation in the global
economy and stock markets. In fact, the year under review
has been far from ‘normal’, dominated as it has been by
efforts in the US to reshape global trade via various tariff
announcements. Since April’s ‘Liberation Day’ trade tariff
announcement, US policymaking has taken centre stage
for market watchers as tariffs were announced, paused
and renegotiated.
If the scale of this upheaval had been clear when I
wrote my statement last year, I might have thought twice
before using the word ‘normality’. But what has been truly
remarkable in the face of such uncertainty is how well stock
markets, and in particular the UK market, have performed.
UK equities remain deeply unloved on the domestic stage,
with more than £12bn pulled out of open-ended funds
across the UK All Companies, UK Equity Income and UK
Smaller Companies sectors between July 2024 and July
2025
1
. The last month to see aggregate inflows rather than
outflows was July 2021, since which time more than £48bn
has been withdrawn. Funds under management in UK
equities have fallen by one-fifth, with the biggest reduction (c
60%) being in the UK Smaller Companies sector. Somewhat
paradoxically, the start of this period of sustained outflows
(mid to late 2021) almost exactly tracks the beginning of a
recovery in the UK equity market versus the rest of the world,
following a time of relative decline that began with the
Brexit vote in 2016 and lasted until late 2020.
Against this background, it is very pleasing to report
another year of strong absolute and relative performance
for the Company, with a net asset value (“NAV”) total return
of +14.3% and a share price total return of 21.8% for the
year ended 31 August 2025, versus a total return of +12.6%
for our Benchmark, the FTSE All-Share Index. Returns have
been both positive and ahead of the Benchmark in four
of the past five years, building a cumulative five-year
NAV total return of 124.3% and a share price total return
of 140.4%, compared with 77.7% for the FTSE All-Share
Index. In a world where the investment headlines are
often dominated by the ‘AI revolution’ in general, and US
technology stocks in particular, shareholders may also be
pleasantly surprised to know that the Company has also
substantially outperformed the 87.5% sterling total return
from the Nasdaq index over the same period.
This is my last report to you after nearly 10 years as
a Director and almost three years as Chairman, so I
also wanted to reflect on the Company’s longer-term
performance, which has been remarkable. Your Portfolio
Manager, Alex Wright, has been in post since September
2012, with Jonathan Winton alongside him as Co-Portfolio
I have pleasure in presenting the
Annual Report of Fidelity Special
Values PLC for the year ended
31 August 2025.
Dean Buckley, Chairman
£1,267.2m
(As at 31 August 2025)
Shareholders’ Funds
+14.3%
(Year ended 31 August 2025)
Net Asset Value per Ordinary Share
total return
+21.8%
(Year ended 31 August 2025)
Share Price total return
+12.6%
(Year ended 31 August 2025)
Benchmark total return
1 Based on monthly net retail sales figures from The Investment Association.
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Fidelity Special Values PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Manager since February 2020. During Alex’s tenure, the
Company has produced an annualised NAV total return
of 11.8%, which represents an outperformance of 4.0% per
year versus the Benchmark’s 7.8% annualised return. As I
step down as your Chairman, I would like to congratulate
Alex and also Jonathan for this tremendous record, which
is testament both to a robust investment process and to
the long-term value of investing in good quality companies
when they are unloved.
Dividends
While your Company’s investment approach is focused on
long-term capital growth rather than income generation,
dividends have historically formed an important part of
the total shareholder return. The Board’s policy is to pay
dividends twice a year in order to smooth the dividend
payments for the Company’s financial year.
The Company’s revenue return for the year to
31 August 2025 was 12.28 pence per share (2024:
11.58 pence). An interim dividend of 3.36 pence per share
(2024: 3.24 pence) was paid on 19 June 2025. The Board
is recommending a final dividend of 6.84 pence per share
for the year ended 31 August 2025 (2024: 6.30 pence) for
approval by shareholders at the Annual General Meeting
(“AGM”) on 11 December 2025. Together, the interim
and final dividends total 10.20 pence, representing an
increase of 6.9% over the 9.54 pence paid for the year
ended 31 August 2024. The final dividend will be payable
on 13 January 2026 to shareholders on the register at the
close of business on 28 November 2025 (ex-dividend date
27 November 2025).
The total dividends for the year will provide shareholders
with a 16th consecutive year of sustained annual dividend
growth. While income is not the core objective of your
Company’s investment strategy, we as a Board understand
the value of a regular dividend stream to smooth the less
certain trajectory of short-term capital performance.
Gearing
Net gearing fell in aggregate during the financial year,
from 7.9% on 31 August 2024 to 5.4% as at 31 August
2025, although it was higher in the intervening period
(10.9% at the half-year end, 28 February 2025). Normally
a lower level of gearing (within the stated range of 0-25%)
might indicate that there are fewer attractive investment
opportunities to be found. However, this has not been the
case in the year under review, with Alex and Jonathan
keen to stress they still see plenty of exciting investment
ideas, particularly lower down the market capitalisation
spectrum. Rather, an elevated level of merger and
acquisition (“M&A”) activity has seen an unusually large
amount of cash coming back into the portfolio, which has
the natural effect of reducing the level of gearing. Detailed
due diligence is a key tenet of the investment process,
particularly among smaller companies that may be less
widely researched, so there is something of a time lag
between receiving M&A proceeds and reinvesting in new
positions. Should the pace of M&A (which has largely been
driven by overseas private equity funds and trade buyers)
moderate, we would expect to see the level of gearing
rise somewhat in the medium-term.
The ability to gear is a key structural advantage of
investment trusts compared with their open-ended
counterparts. Combined with Alex and Jonathan’s
contrarian and value-focused investment approach, your
Board believes that the judicious use of gearing should
continue to add value for shareholders over the longer-
term, as has been proven historically. The Board believes
that a gearing range of 0-25% remains appropriate in
normal market conditions.
Discount
Across the investment trust sector, discounts to NAV have
remained at wider than average levels, standing at 14.1%
on 31 August 2025
2
, a similar level to a year earlier. Your
Company’s discount has remained appreciably narrower
than this, beginning the review year at 8.4% and ending
it at 3.1%, although it did briefly widen to more than
10% in October 2024. Under the Company’s discount
management policy, the Board seeks to maintain the
discount in single digits in normal market conditions. We
therefore undertook a limited number of share buybacks
in early 2025, repurchasing a total of 1,050,000 shares into
Treasury between January and March. Following this, and
without the need for further action, the discount narrowed
sharply and has remained in the low single digits since
May 2025, averaging 6.3% for the year. At the time of
writing, the Company’s discount to NAV remains the lowest
in its AIC UK All Companies sector by some margin, a
testament to our strong performance record.
Each year at the AGM, the Board seeks shareholders’
authority to repurchase up to 14.99% of the issued share
capital. Rest assured that we continue to monitor the level
of the Company’s discount closely and will take further
action when we believe that to do so will be effective and
to the benefit of shareholders.
Raising our profile
Share repurchases are only one of the tools available
to investment company boards seeking to ensure that
share prices do not materially diverge from the value of
underlying investments. Increasing demand is arguably of
far greater value than absorbing excess supply through
share repurchases, and your Board and Fidelity – helped
enormously by your Portfolio Managers’ strong long
term performance record and differentiated investment
approach – have continued to work hard to raise the
Company’s profile with both retail and institutional
investors. This is critically important work, and while a lot
2 Source: Winterflood Investment Trusts, Refinitiv.
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Chairman’s Statement continued
of it happens behind the scenes, you may have also seen
coverage in the press as a result of Alex and Jonathan’s
engagement.
While some coverage comes as a direct result of the
efforts of Fidelity and external PR partners, in other cases
it arises naturally as a consequence of your Company’s
strong long-term track record. We were very pleased
this year to have been included on the Association of
Investment Companies’ annual ‘ISA millionaires’ list again.
This list looks at the returns’ investors could have achieved
by investing their full ISA allowance each year (and
reinvesting any dividends) since the vehicle was introduced
in 1999. A total investment of £326,560 in your Company
over the period from 6 April 1999 to 31 January 2025
would have grown to £1,198,034 – an impressive result that
illustrates the value of investing for the long-term.
We were also delighted to have won the prestigious
Investment Company of the Year award from Investment
Week magazine for the best trust in the UK All Companies
sector for a third year running in November 2024, and we
have the chance to make it four in a row, having been
shortlisted once again for this year’s award.
Board of Directors
It has been an enormous pleasure and a privilege for
me to help guide your Company over the past decade.
Upon my retirement from the Board at the conclusion of
the AGM on 11 December 2025, I am delighted to advise
that Claire Boyle, who was appointed to the Board in June
2019, will take on the role as Chair of the Board. I firmly
believe that Claire has the relevant sector and market
expertise to lead the Board going forwards and will
provide continuity in the stewardship of your Company. In
addition, Claire has extensive experience as an investment
trust director, currently serving on the boards of three
other investment trusts. The Board is confident that Claire
has sufficient capacity to act as Chair of your Company
in light of the time commitments ordinarily associated
with the board of an investment company. I know that
Claire will continue to serve shareholders well. Christopher
Casey joined the Board on 1 January 2025 as part of the
Board’s succession planning and he will replace Claire
as Chair of the Audit Committee and Senior Independent
Director. He is a chartered accountant by profession and
a highly experienced Non-Executive Director, particularly of
investment trusts, and we are pleased to have a candidate
of his calibre to Chair our Audit Committee as Claire steps
up to replace me as Chair of the Board. I wish them both
every success in their new roles.
In accordance with the UK Corporate Governance Code for
Directors of FTSE 350 companies, all Directors are subject
to annual re-election at the AGM on 11 December 2025.
The Directors’ biographies can be found on page 33, and,
between them, they have a wide range of appropriate skills
and experience to form a balanced Board for the Company.
Articles of Association
The Board is proposing to increase the aggregate cap on
Directors’ fees to provide greater flexibility for any future
changes. The proposed new cap is £350,000 in aggregate
per annum, which replaces the existing cap of £250,000
per annum which was put in place in 2021.
The Board is also proposing to extend the time period
allowed to draw up proposals regarding the Company’s
voluntary liquidation and/or reorganisation and to hold a
general meeting at which such proposals are submitted
to members following an unsuccessful continuation vote,
from three to six months. The proposed new time period,
which runs from the date of the general meeting at
which the unsuccessful vote occurred, is felt to provide a
more practicable period to allow proposals to be fully
considered and to be in line with market practice. The
continuation votes are held every three years, and the next
such vote is due at the 2025 AGM.
We have also taken the opportunity to make other
changes of a minor, clarificatory or technical nature,
including clarifications in relation to hybrid general
meetings to follow how practice has developed. However,
the amendments do not provide for, and the Board
has no intention to move to, fully virtual meetings. A full
tracked version of all the changes proposed to the Articles
is available at www.fidelity.co.uk/specialvalues.The
principal changes proposed to the Articles are set out in
more detail in the Directors’ Report at pages 37 and 38.
Annual General Meeting and Continuation Vote
The Company’s AGM will be held at 11.00am on Thursday,
11 December 2025 at 4 Cannon Street, London EC4M 5AB
and virtually via the online Lumi AGM meeting platform.
The AGM provides a great opportunity for shareholders to
hear first-hand from Alex Wright, your Portfolio Manager,
to meet the Company’s Directors, and of course, for us to
meet you. We hope to see as many of you as possible on
the day. Full details of the AGM are on the next page.
In accordance with the Articles of Association, your
Company is subject to a continuation vote every three
years. The next continuation vote will take place at this
year’s AGM on 11 December 2025. At the last continuation
vote in December 2022, it was pleasing to see strong
evidence of shareholder support from the 99.89% of
votes cast in favour of continuation of the Company. The
enfranchisement of shareholders is a key advantage
for investment trust investors over open-ended company
investors, and we would urge all shareholders to use
their vote at the forthcoming AGM to vote in favour of the
continuation of the Company.
Items of special business to be proposed at the AGM are
detailed in the Directors’ Report on pages 37 and 38.
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Fidelity Special Values PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Outlook
Although your Company invests in UK equities, the UK
is a very international market, with around 75% of FTSE
All-Share revenues (and around 65% of portfolio holdings’
revenues) coming from overseas. As such, the global
backdrop – which on current evidence is likely to remain
fractious – will continue to be relevant in shaping the
fortunes of your Company in the year ahead. While
performance has been very positive in the year under
review, the UK economic outlook remains muted and
subject to further uncertainty ahead of the Budget in late
November. However, as Alex pointed out in a recent
webinar, just because there is a lot of negativity on
politics and the economy, this does not mean there are
not good returns on offer and, in fact, this is often why
there are good returns to be had. However, while the UK
equity market remains the cheapest (on a forward P/E
basis) compared with the US, Europe, Japan and Asia, its
valuation has risen somewhat from the bargain-basement
levels seen in the last few years, and is now in line with
long-term averages.
With much of the market return in recent years having
come from re-rating rather than earnings growth, the
prospect of another strong year for UK equities as a
whole is less than certain, particularly given the economic
backdrop. That said, the valuation of your Company’s
portfolio remains substantially below the market average
(at around 11x forward P/E, versus 14x for the FTSE All-
Share), despite superior growth metrics compared with
the index average. Although the near-term outlook may be
clouded, we believe these characteristics underscore your
Portfolio Managers’ commitment to finding out-of-favour
companies across the market capitalisation spectrum
that have the potential to make good progress well into
the future.
Dean Buckley
Chairman
5 November 2025
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Chairman’s Statement continued
Annual General Meeting – Thursday, 11 December 2025 at 11.00 am
The AGM of the Company will be held at 11.00 am on Thursday, 11 December 2025 at 4 Cannon Street, London
EC4M 5AB (nearest tube stations are St Paul’s or Mansion House) and virtually via the online Lumi AGM meeting
platform. Full details of the meeting are given in the Notice of Meeting on pages 84 to 87.
For those shareholders who are unable to attend in person, we will live-stream the formal business and presentations
of the meeting online.
Alex Wright, the Portfolio Manager, will be making a presentation to shareholders highlighting the achievements
and challenges of the year past and the prospects for the year to come. He and the Board will be very happy
to answer any questions that shareholders may have. Copies of his presentation can be requested by email at
investmenttrusts@fil.com or in writing to the Secretary at FIL Investments International, Beech Gate, Millfield Lane,
Lower Kingswood, Tadworth, Surrey KT20 6RP.
Properly registered shareholders joining the AGM virtually will be able to vote on the proposed resolutions. Please
see Note 9 to the Notes to the Notice of Meeting on pages 86 and 87 for details on how to vote virtually. Investors
viewing the AGM online will be able to submit live written questions to the Board and the Portfolio Manager and we
will answer as many of these as possible at an appropriate juncture during the meeting.
Further information and links to the Lumi platform may be found on the Company’s website www.fidelity.co.uk/
specialvalues. On the day of the AGM, in order to join electronically and ask questions via the Lumi platform,
shareholders will need to connect to the website https://web.lumiagm.com.
Please note that investors on platforms, such as Fidelity Personal Investing, Hargreaves Lansdown, Interactive Investor
or AJ Bell Youinvest, will need to request attendance at the AGM in accordance with the policies of their chosen
platform. They may request that you submit electronic votes in advance of the meeting. If you are unable to obtain a
unique IVC and PIN from your nominee or platform, we will also welcome online participation as a guest. Once you
have accessed https://meetings.lumiconnect.com from your web browser on a tablet, smartphone or computer, you
will need to enter the Lumi Meeting ID which is 100-720-059-199. You should then select the ‘Guest Access’ option
before entering your name and who you are representing, if applicable. This will allow you to view the meeting and
ask questions, but you will not be able to vote.
Further information on how to vote across the most common investment platforms is available at the following
link: https://www.theaic.co.uk/how-to-vote-your-shares
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Portfolio Manager’s Review
Question
How has the Company performed in the
year to 31 August 2025?
Answer
The Company has recorded strong absolute returns over
the reporting year with a net asset value and a share price
total return of +14.3% and +21.8% respectively, compared to
the Benchmark (FTSE All-Share Index) total return of +12.6%.
Overall, our portfolio holdings have delivered robust
performance against a dynamic market environment. UK
equities reached new all-time highs, driven by large-cap
stocks, while improving investor confidence has sparked
renewed interest in domestic shares. However, these
positive results conceal a volatile period as markets
navigated shifting trade policy announcements, elevated
interest rates, subdued domestic economic data and
stubborn inflation.
Market performance diverged sharply between large-cap
and mid-to-small-cap stocks. The FTSE 100 delivered a
gain of 13.6%, significantly outpacing the FTSE 250 and
FTSE Small Cap Indices, which returned 6.0% and 6.9%,
respectively. Despite our significant underweight position in
large-cap stocks, the outperformance was primarily driven
by stock selection within this part of the market.
Compared to the Benchmark, our underweight position in
health care group AstraZeneca was the top contributor to
relative performance. The company’s shares came under
pressure after corruption allegations in its China operations
and broader concerns that US drug pricing reforms could
weigh on the pharmaceutical sector. We used this weakness
as an opportunity to initiate a position in AstraZeneca,
supported by its attractive drug pipeline and its relatively
lower exposure to US drug pricing reforms.
Within the banking sector, several of our holdings,
including Standard Chartered, NatWest Group and
AIB Group, benefited from strong trading updates,
share buyback announcements and rising interest rate
expectations. In February 2025, Standard Chartered
unveiled a new $1.5 billion share buyback program after
reporting a substantial increase in annual pre-tax profits.
The diversified bank, which has an emerging market focus,
is continuing to make strides in its turnaround journey.
Meanwhile, NatWest and Irish bank AIB consistently
delivered results ahead of consensus expectations
throughout the year.
Defence has also been a key theme in the market. Our
holding in defence contractor Babcock International Group
benefited from a supportive environment with increased
government spending commitments. In recent years,
Babcock has made strong progress in its turnaround
activity. The company has strengthened its balance sheet,
exited lower quality businesses and improved contract
Alex Wright was appointed
as Portfolio Manager of
Fidelity Special Values PLC on
1 September 2012. He joined
Fidelity in 2001 as a research
analyst and covered a number
of sectors across the market
cap spectrum, both in the UK
and developed and emerging
Europe. He became a portfolio
manager in 2007, launching the
Fidelity UK Smaller Companies
Fund in 2008. He is also Portfolio
Manager of Fidelity Special
Situations Fund.
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execution. Similarly, outsourcing company Serco Group,
which has half of its business linked to defence, saw
greater returns after securing three meaningful contracts
from the Ministry of Defence to provide maritime services
for the Royal Navy. Conversely, the underweight position in
Rolls Royce, while delivering strong absolute gains for the
Company’s portfolio, weighed on performance relative to
the Benchmark.
Merger and acquisition (“M&A”) activity continued to
provide a positive tailwind and also contributed to the
portfolio’s performance. Our holding in Bakkavor Group,
a leading UK supplier of freshly prepared foods, gained
after peer Greencore agreed to acquire the company in
a £1.2 billion cash-and-share deal. Direct Line Insurance
Group also advanced following Aviva’s agreement to
acquire the company for £3.7 billion, which completed in
July 2025 and created the UK’s largest motor insurer. The
latest announcement is from Just Group, a life insurance
company, which struck a deal to be acquired by Canada’s
Brookfield Wealth Solutions. M&As also supported our
holdings in gold pawnbroker H&T Group, Alpha Group, a
foreign exchange broker (helping corporates with currency
management) and alternative banking provider, and
Warehouse REIT, an investor in large logistic warehouses.
Elsewhere, our position in tobacco group Imperial
Brands added value, with its results showing continued
progress in stabilising its core tobacco business across
key markets. The company also continues to provide an
attractive distribution to shareholders. In addition, not
holding Unilever and Diageo contributed positively, as both
companies came under pressure from weaker earnings,
and in Diageo’s case, structural concerns around future
demand for spirits.
Question
What were some of the major changes
you made to the Company’s portfolio
during the year and what drove those?
Answer
We have actively recycled capital from areas of strong
performance and leaned into unloved businesses with
attractive turnaround potential. While the investment
process is driven by bottom-up stock selection, we
group the market into four super sectors – financials,
resources, defensive and other GDP sensitive companies.
Encouragingly, we have increasingly been finding attractive
ideas across the full range of these sectors and the market
capitalisation spectrum.
Within financials, banks have remained a standout source
of returns. We exited our position in Barclays and reduced
our stake in AIB Group following strong rallies in the shares
of both companies and redeployed some of these profits
into Lloyds Banking Group, Close Brothers Group and
Secure Trust Bank, following a more constructive outlook
on the motor-finance review. We also sold our holding in
leading UK insurer Phoenix Group Holdings after a period
of positive performance, with our investment thesis largely
playing out. Financials remain well represented in the
portfolio and offer diversification across different business
models and geographic exposure.
Elsewhere, we continue to find attractive opportunities in
defensives. We increased our position in medical device
company Smith & Nephew, driven by stronger conviction
in its orthopaedics turnaround, and it subsequently rallied
after revealing positive progress in its quarterly results.
We took profits from Imperial Brands and recycled
it into British American Tobacco, given its attractive
valuation, geographical footprint and greater exposure to
next-generation products. The company is particularly well
positioned to benefit from possible regulatory changes
in the US, where illicit products currently dominate the
next generation nicotine market. We exited our position in
pharmaceutical company GSK due to waning confidence in
its ability to sustain growth in HIV treatments ahead of an
upcoming patent cliff.
Within resources, our underweight position has narrowed
as we have identified selective investment opportunities.
While we continue to hold a cautious stance on oil given
the challenging demand and supply backdrop, it has
increasingly become an unloved area. We initiated a
position in our preferred oil major, TotalEnergies, while
exiting OMV, Shell, and Schlumberger. In mining, we
continue to remain underweight in large-cap names due to
a weak outlook on iron ore. However, we added a position
in Glencore, which offers attractive commodity exposure
and supports our constructive view on copper.
Our exposure to domestically focused businesses has
increased, particularly linked to UK consumption. This
includes holdings in retailers such as Frasers Group and
DFS, housing-related stocks such as Genuit and Travis
Perkins, as well as three smaller UK housebuilders. These
businesses combine attractive stock-specific opportunities
with depressed industry volumes, offering multiple catalysts
to support a turnaround. While consumers have been
saving heavily over the past few years, consumption
levels are historically low due to concerns around
inflation, interest rates and ongoing geopolitical conflicts.
We anticipate an improving outlook as housing market
volumes strengthen and interest rates decline.
Until recently, we maintained limited exposure to the
property sector due to tight yields and an oversupply
of office space following the rise of working from home.
However, this has started to unwind, and we have
selectively increased exposure to areas offering higher
yields, rising rental growth and attractive total returns.
Many of these stocks trade at significant discounts to their
net asset values, for example, in student accommodation
(Empiric Student Properties), industrial logistics (Warehouse
Portfolio Manager’s Review continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
REIT) and prime London office space (Derwent). We
have favoured smaller companies within the sector given
the potential for economies of scale from consolidation.
Notably, both Empiric Student Properties and Warehouse
REIT are currently subject to takeover activity.
Question
UK equities continue to trade at a
discount to global markets. What
opportunities does this present for
investors and what could drive this
valuation gap to close?
Answer
UK equities have performed strongly over the past year,
yet many domestic investors continue to withdraw funds
from the UK market. This investment behaviour has been
a long-standing trend, leaving UK shares trading at a
substantial valuation discount compared with other regions.
Nevertheless, inflows are not necessary to generate good
performance and capital exiting industries can present
exciting investment opportunities, as it leads to greater
market inefficiencies.
We have seen a reduction in competitor resources and
fewer investors following UK companies, particularly further
down the market capitalisation spectrum. This allows us to
gain an analytical edge, supported by Fidelity’s extensive
analyst network, helping us to explore unloved areas of the
market and uncover hidden investment gems.
The valuation gap between the UK and global markets
has narrowed, following a period of strong returns.
Encouragingly, buying interest has returned from
international investors, helping to support a revival in
UK equities. The UK has been an attractive destination,
particularly for US investors, given the highly international
nature of many domestic companies and the cheap
valuations on offer.
We have seen another strong year of M&A activity, with
several of our holdings subject to bids, reflecting the value
on offer in the UK market. This activity has been broad-
based, ranging from domestic consolidation, overseas
acquirers and private equity interest. The increase in bid
activity highlights an additional channel to unlock value in
our positions. Other supportive dynamics include attractive
dividends compared to global markets and a record
number of UK companies buying back their own shares.
The UK’s unpopularity in recent years has prompted
frequent questions around what catalyst is needed to
improve domestic performance and close the valuation
gap. My response continues to be that nothing needs to
change, we do not require a re-rating to deliver attractive
returns. Importantly, forecasts for company earnings across
our holdings remain strong and we work closely with
Fidelity’s analyst teams to assess the likelihood of these
earnings being delivered. Overall, we remain happy with
the performance environment, and it remains a fertile
hunting ground for contrarian stock pickers.
Question
Can you elaborate on the Company’s
increased tilt towards mid and small-cap
companies, domestically focused
businesses and how their recovery is
playing out?
Answer
One of the key advantages of the investment company
structure is that we can hold meaningful exposure
further down the market cap spectrum. We have always
maintained a structural bias towards these smaller
companies, as they are typically less well known to
investors and often poorly covered by the sell side.
Over the past twelve months, we have selectively
increased our exposure to this part of the market given
the attractive turnaround opportunities, particularly within
more cyclical areas. Many of these businesses have been
hit hard in recent years, and also investors have tended
to favour larger, global companies. At the time of writing,
large-cap companies were trading marginally above
their long-term averages, with the FTSE 100 on 14.1x
forward price-to-earnings, whereas mid-cap and small-cap
companies present a more pronounced valuation
opportunity, trading at c12x forward price-to-earnings.
We have exposure to the domestic consumer through
retail and housing-related stocks, as well as property
companies. These areas are particularly attractive as
industry cycles are depressed compared with history, such
as housebuilding volumes, sofa sales and new kitchens,
which are 10-25% below pre-Covid volumes. There have
been tentative signs of a recovery, with DFS and Halfords
delivering positive profit updates earlier in the year.
However, consumer spending remains low and sentiment
poor, and these stocks are sensitive to what is going on
in the domestic economic environment. While it is difficult
to predict when a turnaround will materialise, importantly
they have idiosyncratic factors that could drive their growth
and valuations without pricing in a recovery in volumes.
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Portfolio Manager’s Review continued
Question
M&A activity has been a positive source
of performance for the Company over the
past few years. Why is this a consistent
feature and do you expect these levels of
M&A to continue going forward?
Answer
Our contrarian-value approach focuses on finding unloved
companies with the potential for positive change. We
firstly evaluate the downside protection of a company
before considering its prospects over a three-to-five-year
view. While the investment thesis is not predicated on a
takeover, it can be a secondary effect arising from our
investment approach. This is due to our structural bias
towards investing in undervalued medium and smaller
sized companies, where takeover activity is typically higher.
As companies progress through their positive change
journey, we conduct extensive due diligence and closely
monitor developments with support from Fidelity’s analyst
network. We generally find that our contrarian ideas
typically re-rate as positive developments excite the
market and more investors buy into the story. However,
occasionally the route is a takeover, which can unlock
shareholder value earlier. While not every takeover bid
is what we consider fair value, the majority of deals have
offered attractive premiums, and our process recycles this
capital into new ideas.
Despite turbulent markets and sharp currency movements,
there has been no pause in takeover activity this year.
We have seen a flurry of bids for companies within the
portfolio. The surge in activity underscores the inherent
value and investment opportunities available in the UK
market. There are numerous overlooked companies across
the market cap spectrum and our holdings continue to
trade at an attractive discount to the broader market.
Our contrarian investment approach should continue to
benefit from an active takeover market. While the level
of M&A activity will not always remain this high, we are
excited that our holdings have this additional potential
channel to unlock value. The investment universe remains
deep and attractive, offering plenty of choice and
investment opportunities.
Question
There has been a resurgence in
UK equities – do you expect this
outperformance to continue over the next
12 months and beyond?
Answer
The return of overseas investors is an encouraging trend,
as they capitalise on the relative value available in the UK
market. Given that the UK represents only a small share of
global indices, even modest reallocations from overseas
can have a meaningful positive impact.
Encouragingly, despite subdued domestic economic
data and political uncertainty prevailing in the market,
performance recently has remained positive. This
underscores the fact that attractive returns are available
in an uncertain environment, which can act as a driver
of investment opportunities. We continue to believe that
the combination of attractive valuations and the large
divergence in performance between different parts of the
market creates good opportunities for returns from UK
stocks on a three-to-five-year view.
While there has been some narrowing in regional
valuations following strong performance, we believe that
the UK has room to run further. It continues to trade at a
meaningful discount to other regions, both on an absolute
basis and when adjusting for sectoral differences in
markets. Importantly, this gives investors a more attractive
starting point compared to other more expensive markets.
We remain excited with the prospects for our
holdings. Overall, we believe the UK market has an
underappreciated richness of opportunity, combining
strong earnings growth, high dividend yields and low
valuations. The portfolio benefits from a favourable
upside/downside profile and our holdings trade at a
meaningful discount to the broader UK market, despite
exhibiting resilient earnings, strong returns on capital and
relatively low levels of debt. This quality profile reinforces
our confidence in delivering attractive long-term returns for
investors.
Alex Wright
Portfolio Manager
5 November 2025
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Spotlight on the Top 10 Holdings
as at 31 August 2025
(Based on Asset Exposure expressed as a percentage of Net Assets. Asset Exposure comprises
the value of direct equity investments plus market exposure to derivative instruments.)
British American Tobacco
% of Net Assets
4.0%
British American Tobacco (“BAT”) is the second largest producer in its sector
and has meaningful exposure to next generation products. The company has
developed fast growing products, including Velo+, which is gaining market share in
the United States. BAT maintains a disciplined approach to capital allocation and
continues to return cash to shareholders through dividends and share buybacks.
Industry Tobacco
Standard Chartered
% of Net Assets
3.7%
Standard Chartered is an international banking group with a strong presence
in Asia, Africa and the Middle East. The bank provides a full range of retail,
corporate and institutional banking services, and benefits from deep local
relationships and strong brand recognition across fast-growing emerging markets.
Management have de-risked the business over the past decade and made
progress in its turnaround.
Industry Banks
Aviva
% of Net Assets
4.1%
Aviva is a composite insurer offering both life and non-life insurance, as well as
asset management services. Following its acquisition of Direct Line, it is now the
UK’s largest motor insurer. The company also holds strong positions in pensions
and retirement income within its portfolio. The life insurance sector presents
an appealing combination of cheap valuations, attractive dividend yields and
favourable market dynamics.
Industry Life Insurance
DCC
% of Net Assets
3.4%
DCC is a global distributor of thermal products and has been restructuring its
portfolio through planned divestments in its healthcare and technology businesses.
The proceeds from these sales will be used to support share buybacks and
strengthen its balance sheet. The company has a strong track record of disciplined
capital allocation and value-accretive acquisitions, and these have generated
long-term attractive returns.
Industry Industrial Support Services
NatWest Group
% of Net Assets
3.4%
NatWest Group has made significant strides in repositioning itself. It is now a
smaller, mostly UK focused, bank with good retail and commercial banking
franchises, a solid balance sheet, a high-quality deposit base and a well
diversified loan book. Capital generation is strong, allowing for very attractive
dividends and share buybacks.
Industry Banks
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TotalEnergies
% of Net Assets
2.9%
TotalEnergies is a global multi-energy company operating in over 130 countries,
producing and marketing fuels, natural gas, and electricity. The French-listed
company has a strong long-term track record and demonstrates consistent
execution, particularly relative to UK peers. TotalEnergies offers attractive growth
potential as it balances profitability with renewable energy sources including solar,
wind, biomass, hydrogen and electricity, as well as traditional natural gas and oil
business.
Industry Oil, Gas & Coal
Glenveagh Properties
% of Net Assets
2.7%
Glenveagh Properties is one of two prominent Irish housebuilders, reflecting the
attractive fundamentals in the Irish housing market. The company is a beneficiary
of a prolonged period of undersupply and growing structural demand, supported
by favourable demographics and government initiatives.
Industry Household Goods & Home
Construction
AstraZeneca
% of Net Assets
2.7%
Astrazeneca is the largest UK pharmaceutical company, specialising in oncology,
respiratory and cardiovascular drugs. The company’s broad and diverse pipeline
presents attractive growth opportunities, particularly within its oncology business.
Industry Pharmaceuticals &
Biotechnology
Just Group
% of Net Assets
2.4%
Just Group is a UK based life insurance company with exposure to writing
individual annuities as well as corporate bulk purchase annuities. In July 2025,
Just Group agreed to a £2.4 billion all-cash takeover by Canadian insurer
Brookfield Wealth Solutions.
Industry Life Insurance
Spotlight on the Top 10 Holdings continued
Imperial Brands
% of Net Assets
3.2%
Imperial Brands is a global fast-moving consumer goods company, the fourth
largest in its industry sector. It has made progress with stabilising its tobacco
revenue and catching up with the competition in developing a range of less
harmful next generation products. Imperial Brands maintains a disciplined
approach to capital allocation and continues to return cash to shareholders
through dividends and share buybacks.
Industry Tobacco
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Portfolio Listing
as at 31 August 2025
The Asset Exposures shown below and on pages 14 to 16 measure exposure to market price movements as a result of owning shares,
bonds and derivative instruments. The Fair Value is the realisable value of the portfolio as reported in the Balance Sheet. Where the
Company holds shares and bonds, the Asset Exposure and Fair Value will be the same. For derivative instruments, Asset Exposure is the
market value of the underlying asset to which the Company is exposed, while the Fair Value reflects the profit or loss on the contract since
it was opened, and is based on how much the share price of the underlying asset has moved.
Asset Exposure Fair Value
£’000 %
1
£’000
Long Exposures – shares unless otherwise stated
Aviva – Life Insurance 52,125 4.1 52,125
British American Tobacco – Tobacco 51,154 4.0 51,154
Standard Chartered – Banks 46,445 3.7 46,445
DCC – Industrial Support Services 42,965 3.4 42,965
NatWest Group – Banks 42,790 3.4 42,790
Imperial Brands – Tobacco 40,032 3.2 40,032
TotalEnergies (long CFDs) – Oil, Gas & Coal 37,190 2.9 (699)
Glenveagh Properties – Household Goods & Home Construction 34,255 2.7 34,255
AstraZeneca – Pharmaceuticals & Biotechnology 33,690 2.7 33,690
Just Group – Life Insurance 30,650 2.4 30,650
Smith & Nephew – Medical Equipment & Services 30,424 2.4 30,424
Mitie Group – Industrial Support Services 30,123 2.4 30,123
Bakkavor Group – Food Producers 27,596 2.2 27,596
Cairn Homes (long CFDs) – Household Goods & Home Construction 26,276 2.1 113
SSE – Electricity 26,228 2.1 26,228
Serco Group (shares and long CFD) – Industrial Support Services 25,823 2.0 23,252
Reckitt Benckiser Group – Personal Care, Drug & Grocery Stores 24,342 1.9 24,342
AIB Group (long CFD) – Banks 23,361 1.8 (776)
Lloyds Banking Group – Banks 22,211 1.8 22,211
Frasers Group – Retailers 20,157 1.6 20,157
C&C Group (shares and long CFDs) – Beverages 19,385 1.5 17,066
Coats Group – General Industrials 18,358 1.4 18,358
National Grid – Gas, Water & Multi-Utilities 18,071 1.4 18,071
Genuit Group (shares and long CFDs) – Construction & Materials 18,058 1.4 11,944
Keller Group – Construction & Materials 17,499 1.4 17,499
Hellenic Telecommunications Organisation – Telecommunications Service Providers 17,335 1.4 17,335
Babcock International Group – Aerospace & Defense 17,321 1.4 17,321
Energean – Oil, Gas & Coal 15,850 1.3 15,850
Elementis – Chemicals 15,095 1.2 15,095
West African Resources – Precious Metals & Mining 14,744 1.2 14,744
Conduit Holdings (shares and long CFDs) – Non-Life Insurance 14,117 1.1 10,886
Moonpig Group – Retailers 13,794 1.1 13,794
WPP (long CFD) – Media 13,659 1.1 433
Ryanair Holdings (long CFD) – Travel & Leisure 13,066 1.0 (467)
Zigup – Industrial Transportation 13,054 1.0 13,054
St. James’s Place – Investment Banking & Brokerage Services 12,946 1.0 12,946
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Asset Exposure Fair Value
£’000 %
1
£’000
Warehouse REIT (shares and long CFD) – Real Estate Investment Trusts 12,893 1.0 11,194
TBC Bank Group – Banks 12,824 1.0 12,824
Spire Healthcare Group – Health Care Providers 12,815 1.0 12,815
Close Brothers Group – Banks 12,734 1.0 12,734
Glencore – Industrial Metals & Mining 12,653 1.0 12,653
Future – Media 12,620 1.0 12,620
Howden Joinery Group – Retailers 12,186 1.0 12,186
Morgan Advanced Materials (shares and long CFDs) – Electronic & Electrical Equipment 12,125 1.0 10,245
Hays – Industrial Support Services 11,808 0.9 11,808
Rolls-Royce Holdings – Aerospace & Defense 11,506 0.9 11,506
Roche Holding – Pharmaceuticals & Biotechnology 11,268 0.9 11,268
Halfords Group (shares and long CFDs) – Retailers 11,168 0.9 6,821
Norcros (shares and long CFD) – Construction & Materials 10,580 0.8 7,236
Jupiter Fund Management – Investment Banking & Brokerage Services 9,753 0.8 9,753
DFS Furniture (shares and long CFD) – Retailers 9,590 0.8 7,285
TT Electronics (shares and long CFDs) – Technology Hardware & Equipment 9,576 0.8 4,807
Alpha Group International – Investment Banking & Brokerage Services 9,262 0.7 9,262
Origin Enterprises (shares and long CFD) – Food Producers 8,650 0.7 7,969
Essentra (shares and long CFDs) – Industrial Support Services 8,578 0.7 6,906
Central Asia Metals (shares and long CFD) – Industrial Metals & Mining 8,373 0.7 3,750
Crest Nicholson Holdings (shares and long CFD) – Household Goods &
Home Construction 8,356 0.7 5,504
PZ Cussons – Personal Care, Drug & Grocery Stores 7,788 0.6 7,788
Sherborne Investors Guernsey (shares and long CFDs) – Closed End Investments 7,663 0.6 4,614
Kaspi.kz – Banks 7,467 0.6 7,467
PetroTal – Oil, Gas & Coal 6,838 0.5 6,838
Travis Perkins – Industrial Support Services 6,590 0.5 6,590
Permanent TSB Group Holdings (shares and long CFDs) – Banks 6,365 0.5 520
Johnson Service Group – Industrial Support Services 6,355 0.5 6,355
NewRiver REIT – Real Estate Investment Trusts 6,204 0.5 6,204
RS Group – Industrial Support Services 6,143 0.5 6,143
IG Design Group (shares and long CFDs) – Personal Care, Drug & Grocery Stores 5,458 0.4 3,185
Victrex – Chemicals 5,418 0.4 5,418
Derwent London – Real Estate Investment Trusts 5,392 0.4 5,392
LSL Property Services – Real Estate Investment & Services 5,350 0.4 5,350
Hikma Pharmaceuticals – Pharmaceuticals & Biotechnology 4,931 0.4 4,931
Greencore Group – Food Producers 4,828 0.4 4,828
Pan African Resources – Precious Metals & Mining 4,603 0.4 4,603
Gooch & Housego – Technology Hardware & Equipment 4,452 0.4 4,452
Man Group – Investment Banking & Brokerage Services 4,419 0.3 4,419
Watkin Jones (shares and long CFDs) – Household Goods & Home Construction 4,362 0.3 3,147
Gateley Holdings – Industrial Support Services 4,117 0.3 4,117
Portfolio Listing continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Asset Exposure Fair Value
£’000 %
1
£’000
Senior – Aerospace & Defense 3,958 0.3 3,958
Empiric Student Property – Real Estate Investment Trusts 3,876 0.3 3,876
Begbies Traynor Group – Investment Banking & Brokerage Services 3,634 0.3 3,634
Secure Trust Bank – Banks 3,570 0.3 3,570
VP – Industrial Transportation 3,528 0.3 3,528
NAC Kazatomprom – Oil, Gas & Coal 3,424 0.3 3,424
Bango – Software & Computer Services 3,317 0.3 3,317
James Fisher & Sons – Industrial Transportation 3,289 0.3 3,289
Henry Boot – Real Estate Investment & Services 3,153 0.2 3,153
Speedy Hire – Industrial Support Services 3,150 0.2 3,150
Savills – Real Estate Investment & Services 2,967 0.2 2,967
Kenmare Resources (long CFDs) – Industrial Metals & Mining 2,718 0.2 (54)
Capital – Industrial Metals & Mining 2,658 0.2 2,658
Costain Group – Industrial Support Services 2,452 0.2 2,452
Tritax Big Box REIT – Real Estate Investment Trusts 2,384 0.2 2,384
Shaftesbury Capital (convertible bond) – Real Estate Investment Trusts 2,357 0.2 2,357
MJ Gleeson – Household Goods & Home Construction 2,316 0.2 2,316
Jadestone Energy (shares and long CFDs) – Oil, Gas & Coal 2,284 0.2 1,580
PageGroup – Industrial Support Services 2,186 0.2 2,186
John Wood Group (shares and long CFD) – Oil, Gas & Coal 1,996 0.2 1,728
Digital 9 Infrastructure – Closed End Investments 1,903 0.2 1,903
Premier Miton Group – Investment Banking & Brokerage Services 1,760 0.1 1,760
BT Group – Telecommunications Service Providers 1,567 0.1 1,567
Foresight Group Holdings – Investment Banking & Brokerage Services 1,559 0.1 1,559
Gemfields Group – Precious Metals & Mining 1,347 0.1 1,347
Schroders – Investment Banking & Brokerage Services 1,347 0.1 1,347
FDM Group Holdings – Industrial Support Services 744 0.0 744
Worsley Investors – Closed End Investments 580 0.0 580
Atlantic Lithium – Industrial Metals & Mining 495 0.0 495
Prax Exploration & Production – Oil, Gas & Coal 390 0.0 390
abrdn Property Income Trust – Closed End Investments 225 0.0 225
Marwyn Value Investors – Closed End Investments 154 0.0 154
TVC Holdings – Investment Banking & Brokerage Services 49 0.0 49
McColl’s Retail Group – Personal Care, Drug & Grocery Stores – 0.0 –
Hostmore – Travel & Leisure – 0.0 –
Studio Retail Group – Retailers – 0.0 –
Unbound Group (shares and long CFD) – Retailers – 0.0 –
Gross Asset Exposure (114 holdings) 1,335,587 105.4
Portfolio Fair Value 1,162,106
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
See the next page for details of the Fair Value and Asset Exposure of Investments.
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Portfolio Listing continued
Fair Value and Asset Exposure of Investments
as at 31 August 2025
2025 2024
Fair Value Asset Exposure Asset Exposure
£’000 £’000 %
1
£’000 %
1
Investments (Note 10 – see page 68) 1,164,423 1,164,423 91.9 1,120,686 98.0
Long CFDs (Note 11 – see page 69) (2,317) 171,164 13.5 115,050 10.1
Short CFDs (Note 11 – see page 69) – – – 2,117 0.2
1,162,106 1,335,587 105.4 1,237,853 108.3
Cash at bank
2
1,937 (171,544) (13.6) (110,977) (9.7)
Fidelity Institutional Liquidity Fund 92,172 92,172 7.3 9,677 0.8
Other net current assets (excluding derivative assets and
liabilities) 10,973 10,973 0.9 6,988 0.6
Shareholders’ Funds 1,267,188 1,267,188 100.0 1,143,541 100.0
The Company uses gearing through the use of CFD positions. Gross gearing as at 31 August 2025 was 5.4% (2024: 8.3%) and net
gearing was 5.4% (2024: 7.9%) – see Note 18 on page 79 for further details.
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 The asset exposure column for cash at bank has been adjusted to assume the Company traded direct holdings rather than exposure being gained through CFD
positions. The amount is derived by taking the cost of the shares underlying the CFDs when the contracts were opened less the cash at bank balance at the year end.
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Distribution of the Portfolio
as at 31 August 2025
The table below and on the next page details the Distribution of the Portfolio based on Asset Exposure which measures the exposure
of the portfolio to market price movements as a result of owning shares, bonds and derivatives instruments.
Shares, bonds and derivative instruments UK
1
Overseas
2
2025
Asset
Exposure
3
Index
4
2024
Asset
Exposure
3
%%%%%
Financials
Banks 10.7 3.4 14.1 13.3 14.2
Life Insurance 6.5 – 6.5 2.6 7.0
Investment Banking & Brokerage Services 3.4 – 3.4 3.5 1.6
Non-Life Insurance – 1.1 1.1 0.8 3.9
Closed End Investments – 0.8 0.8 5.6 1.3
Finance & Credit Services – – – 1.9 0.5
20.6 5.3 25.9 27.7 28.5
Industrials
Industrial Support Services 11.8 – 11.8 3.0 7.7
Construction & Materials 3.6 – 3.6 0.5 5.0
Aerospace & Defense 2.6 – 2.6 6.3 2.4
Industrial Transportation 1.6 – 1.6 1.0 2.0
General Industrials 1.4 – 1.4 0.9 2.9
Electronic & Electrical Equipment 1.0 – 1.0 1.1 0.5
Industrial Engineering – – – 0.6 –
22.0 – 22.0 13.4 20.5
Consumer Staples
Tobacco 7.2 – 7.2 4.1 6.3
Food Producers 2.2 1.1 3.3 0.6 2.3
Personal Care, Drug & Grocery Stores 2.9 – 2.9 7.6 6.2
Beverages – 1.5 1.5 2.7 1.7
12.3 2.6 14.9 15.0 16.5
Consumer Discretionary
Household Goods & Home Construction 1.2 4.8 6.0 0.8 4.8
Retailers 5.4 – 5.4 1.5 1.9
Media 2.1 – 2.1 1.1 1.5
Travel & Leisure 1.0 – 1.0 2.0 0.7
Automobiles & Parts –––– 0.6
Consumer Services – – – 1.7 –
Personal Goods – – – 0.2 –
Leisure Goods – – – 0.2 –
9.7 4.8 14.5 7.5 9.5
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Shares, bonds and derivative instruments UK
1
Overseas
2
2025
Asset
Exposure
3
Index
4
2024
Asset
Exposure
3
%%%%%
Health Care
Pharmaceuticals & Biotechnology 4.0 – 4.0 10.7 5.3
Medical Equipment & Services 2.4 – 2.4 0.6 0.1
Health Care Providers 1.0 – 1.0 – 1.9
7.4 – 7.4 11.3 7.3
Basic Materials
Industrial Metals & Mining 0.7 1.4 2.1 4.4 1.8
Precious Metals & Mining – 1.7 1.7 0.3 1.8
Chemicals 1.6 – 1.6 0.3 2.7
2.3 3.1 5.4 5.0 6.3
Energy
Oil, Gas & Coal 3.3 2.1 5.4 9.2 6.1
3.3 2.1 5.4 9.2 6.1
Utilities
Electricity 2.1 – 2.1 0.9 1.5
Gas, Water & Multi-Utilities 1.4 – 1.4 2.9 2.8
3.5 – 3.5 3.8 4.3
Real Estate
Real Estate Investment Trusts 2.6 – 2.6 1.8 1.9
Real Estate Investment & Services 0.8 – 0.8 0.4 0.6
3.4 – 3.4 2.2 2.5
Technology
Technology Hardware & Equipment 1.2 – 1.2 – 1.4
Software & Computer Services 0.3 – 0.3 3.6 2.0
1.5 – 1.5 3.6 3.4
Telecommunications
Telecommunications Service Providers 0.1 1.4 1.5 1.3 1.4
Telecommunications Equipment –––– 2.0
0.1 1.4 1.5 1.3 3.4
Total Asset Exposure – 2025 86.1 19.3 105.4 100.0 108.3
Total Asset Exposure – 2024 96.0 12.3 108.3
1 Comprises shares listed on a UK exchange, UK derivatives (classified by reference to the UK exchange of the underlying equity) and UK bonds (classified by country
of risk).
2 Comprises shares listed on an overseas exchange, overseas derivatives (classified by reference to the overseas exchange of the underlying equity) and overseas bonds
(classified by country of risk).
3 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
4 The FTSE All-Share Index which is the Company’s Benchmark Index.
Distribution of the Portfolio continued
as at 31 August 2025
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Ten Year Record
as at 31 August 2025
As at 31 August 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Capital
Shareholders’ funds (£m) 1,267.2 1,143.5 951.0 922.6 954.1 579.5 698.7 725.0 673.5 578.3
NAV per ordinary share (p)
1
392.26 352.84 293.44 284.67 304.79 199.81 252.99 271.98 254.63 217.94
Share price (p) 380.00 321.50 267.50 260.50 308.50 181.60 251.50 276.00 246.50 196.25
(Discount)/premium to NAV (%)
1
(3.1) (8.9) (8.8) (8.5) 1.2 (9.1) (0.6) 1.5 (3.2) (10.0)
Revenue
Revenue return per ordinary share (p)
1
12.28 11.58 10.67 9.42 7.22 4.81 8.65 5.70 5.33 4.15
Dividends per ordinary share (p) 10.20 9.54 8.80 7.75 6.67 5.80 7.25
2
5.00 4.60 3.70
Ongoing charges (costs of running the
Company) (%)
1
0.68 0.70 0.70 0.69 0.76 0.98 0.97 1.04 1.06 1.10
Gearing
1
Gross gearing (%)
3
5.4 8.3 6.5 10.0 14.6 14.0 2.5 10.4 9.1 15.5
Net gearing (%)
4
5.4 7.9 6.5 10.0 14.6 14.0 2.5 6.6 0.9 7.9
Performance Total Returns
NAV (%)
1
+14.3 +24.1 +5.9 -4.4 +56.2 -18.5 -4.9 +8.7 +19.1 +9.9
Share price (%)
1
+21.8 +24.3 +5.6 -13.5 +73.8 -25.4 -6.9 +14.0 +28.1 +1.1
Benchmark (%) +12.6 +17.0 +5.2 +1.0 +26.9 -12.6 +0.4 +4.7 +14.3 +11.7
1 Alternative Performance Measures.
2 Includes a special dividend of 1.50 pence per ordinary share.
3 Gross gearing is the total of: long exposures, plus short exposures and less exposures hedging the portfolio, expressed as a percentage of Shareholders’ Funds.
4 Net gearing is the total of: long exposures, less short exposures and less exposures hedging the portfolio, expressed as a percentage of Shareholders’ Funds.
Sources: Fidelity and Datastream.
Past performance is not a guide to future returns.
Dividends per ordinary share forten years to 31 August 2025
0
1
2
3
4
5
6
7
8
9
10
11
2016201720182019202020212022202320242025
5.00p
5.80p
6.67p
4.60p
10.20p
5.75p
8.80p
9.54p
1.50p
1
3.70p
7.75p
1 Special dividend from the increased income generated for the year ended 31 August 2019.
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Total return performance for ten years to 31 August 2025
+146.8%
+147.3%
+108.5%
-25.3%
Prices rebased to 100.
Sources: Fidelity and Datastream.
Share Price
FTSE Gilts over 15 years
FTSE All-Share Index
NAV per ordinary share
50
75
100
125
150
175
200
225
250
Aug 24 Aug 25Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 Aug 20 Aug 21 Aug 23Aug 22
NAV and share price for ten years to 31 August 2025
380.00p
392.26p
Sources: Fidelity and Datastream.
Share Price
NAV per ordinary share
50
75
100
125
150
175
200
225
250
275
300
325
350
375
400
Aug 24 Aug 25Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 Aug 20 Aug 21 Aug 23Aug 22
Summary of Performance Charts
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Fidelity Special Values PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Total return performance relative to the Benchmark for ten years to 31 August 2025
+18.4%
+18.6%
Prices rebased to 100.
Sources: Fidelity and Datastream.
Share Price
FTSE All-Share Index
NAV per ordinary share
80
90
100
110
120
130
Aug 24 Aug 25Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 Aug 20 Aug 21 Aug 23Aug 22
Share price premium/(discount) to NAV for ten years to 31 August 2025 (%)
-8.8
Source: Fidelity.
-14
-12
-10
-8
-6
-4
-2
0
2
4
2025202420232022202120202019201820172016
-0.6
-9.1
+1.2
-10.0
-3.2
+1.5
-8.5
-8.9
-3.1
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Analysis of change in NAV total return for the year ended 31 August 2025 %
Impact of:
Index +12.6
Stock selection +0.8
Gearing +1.0
Operational Costs -0.7
Cash +0.6
NAV total return for the year ended 31 August 2025 +14.3
Sector contributors and detractors as at 31 August 2025 (in absolute terms)
Top 5 Sector Contributors % Bottom 5 Sector Detractors %
Banks +5.6 Media -1.1
Tobacco +3.4 Oil, Gas & Coal -1.0
Life Insurance +2.1 Construction & Metals -0.7
Aerospace & Defense +1.7 General Industrials -0.6
Investment Banking & Brokerage Services +1.1 Software & Computer Services -0.3
Stock contributors and detractors as at 31 August 2025 (in absolute terms)
Top 5 Stock Contributors % Bottom 5 Stock Detractors %
Standard Chartered +2.1 John Wood Group -1.1
Imperial Brands +1.8 WPP -0.9
British American Tobacco +1.6 Conduit Holdings -0.7
NatWest Group +1.4 IG Design Group -0.6
Direct Line Insurance Group +1.4 Coats Group -0.6
Source: Fidelity.
Attribution Analysis
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Fidelity Special Values PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Strategic Report
The Directors have pleasure in presenting the Strategic Report
of the Company. The Chairman’s Statement and the Portfolio
Manager’s Review on pages 2 to 10 form part of the Strategic
Report.
Business and Status
The Company carries on business as an investment company
and has been accepted as an approved investment trust by
HM Revenue & Customs under Sections 1158 and 1159 of the
Corporation Tax Act 2010, subject to the Company continuing to
meet eligibility conditions. The Directors are of the opinion that the
Company has conducted its affairs in a manner which will satisfy
the conditions for continued approval.
The Company is registered as an investment company under
Section 833 of the Companies Act 2006 and its ordinary shares are
listed and traded on the London Stock Exchange. It is not a close
company and has no employees.
Investment Objective
The Company’s objective is to achieve long-term capital growth
primarily through investment in equities (and their related financial
instruments) of UK companies which the Investment Manager
believes to be undervalued or where the potential has not been
recognised by the market.
Strategy
In order to achieve this objective, the Company operates as an
investment company and has an actively managed portfolio of
special situation investments, consisting primarily of UK listed
companies. It has the benefit of investing up to 20% of the portfolio
in listed companies on overseas exchanges in order to enhance
shareholder returns. As an investment company, it is able to gear
the portfolio and the Board takes the view that long-term returns
for shareholders can be enhanced by using gearing in a carefully
considered and monitored way.
As part of the strategy, the Board has delegated the management
of the portfolio and certain other services to the Manager (FIL
Investment Services (UK) Limited). The Portfolio Manager aims to
achieve a total return on the Company’s assets over the longer-
term in excess of the equivalent return on the FTSE All-Share
Index, the Company’s Benchmark. The stock selection approach
adopted by the Portfolio Manager is considered to be well suited
to achieving this objective. The Board recognises that investing in
equities is a long-term process and the Company’s returns will vary
from year to year.
The Company’s objective, strategy and principal activity have
remained unchanged throughout the year ended 31 August 2025.
Investment Management Philosophy, Style and Process
Fidelity International’s (“Fidelity”) distinctive investment approach
is “bottom up” stock picking – investing in companies on the basis
of their underlying strengths, facilitated by extensive research
capabilities. Fidelity’s analysts evaluate companies, meet their
management and speak to suppliers, competitors and customers
in order to build up a picture of the true state of a company’s
fundamentals. This first-hand research is fundamental to Fidelity’s
ability to form a view of a company’s future profitability and
ultimately for the Portfolio Manager to decide if he considers it an
attractive investment for our shareholders. The Portfolio Manager
works closely with the Fidelity analyst team and also has access to
a wide range of research produced by third parties.
Investment Policy
The Company seeks to meet its investment objective through
investment in a diversified portfolio of securities and instruments
issued by or related primarily to UK companies.
The Company will have a blend of investments in larger, medium
and smaller sized companies and be guided by a contrarian
philosophy.
The Portfolio Manager has a contrarian style which focuses on
significant valuation anomalies in stocks which are out of favour
with other investors, yet show potential for change. The Portfolio
Manager believes these opportunities exist across the market
capitalisation spectrum, and the investment approach is flexible,
with positions in large, medium and smaller sized companies.
The proportions in each size category may vary over time, as
investment opportunities are selected on a bottom up basis.
Investments typically have the following characteristics:
•
Unrecognised potential for positive change: The Portfolio
Manager wants to see evidence of the company embarking
upon a period of positive change. Once this change begins to
be recognised by the market, there is potential for substantial
upside.
• Limited downside risk: The Portfolio Manager invests in
companies where market expectations are low. They will have
some asset or characteristic that should prevent significant
falls in the share price.
The Benchmark of the Company against which performance is
measured is the FTSE All-Share Index.
The Company may invest directly in the shares of companies or
indirectly through equity-related instruments (such as derivative
contracts, warrants or convertible bonds) and in debt instruments.
The Company may also invest in unquoted securities, subject to the
investment restrictions set out on page 24.
Derivatives
The Company may utilise derivative instruments, including index-
linked notes, CFDs, covered options and other equity-related
derivative instruments as a tool to meet the investment objective of
the Company.
Derivatives usage will focus on, but not be limited to the following
investment strategies:
• As an alternative form of gearing to bank loans or bonds, the
Company will purchase long CFDs that achieve an equivalent
effect to bank gearing but normally at lower financing costs.
• To hedge equity market risks where the Portfolio Manager
considers that suitable protection can be purchased to limit
the downside of a falling market at a reasonable cost; and
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• By taking short exposures on stocks that the Portfolio Manager
considers to be over-valued.
The Company will not undertake any naked shorts.
Gearing
The Company may use gearing to enhance long-term capital
growth. The maximum level of gross gearing is 40%. Within this
limit the Portfolio Manager has the discretion to use a range of
instruments for gearing, such as debt and CFDs, depending on the
relative cost and availability of those instruments. It is the current
intention of the Board that, in normal market circumstances, the
Portfolio Manager will maintain net gearing in the range of 0% to
25%. Both gross and net gearing are defined in the Glossary of
Terms on page 94. The level of gearing is considered by the Board
at each of its meetings.
Investment Restrictions
The Company will invest and manage its assets with an objective
of spreading risk through the following investment restrictions:
• No single investment (excluding cash and cash equivalents),
nor the aggregate investment in any one company, shall
represent more than 10% of the Company’s portfolio,
measured as at the time of investment.
• No more than 20% of the portfolio will be invested in
companies listed on overseas exchanges.
• The Company will not invest more than 5% of its gross assets
in unquoted securities.
• The Company will not invest more than 15% of its gross assets
at the time of investment in listed investment companies
(including listed investment trusts), including no more than 10%
of its gross assets at the time of investment in funds that do
not have stated policies to invest no more than 15% of their
gross assets in other listed closed-ended investment funds.
Modification of the Investment Objective and/or the
Investment Policy
In accordance with the UK Listing Rules, any material change to the
Company’s published Investment Objective or Investment Policy will
require the prior approval of both the Financial Conduct Authority
and the shareholders of the Company (by way of an ordinary
resolution).
Performance
The Company’s performance for the year ended 31 August
2025 and a summary of the year’s activities and indications of
trends and factors that may impact the future performance of
the Company are included in the Chairman’s Statement and the
Portfolio Manager’s Review on pages 2 to 10. The Portfolio Listing,
the Distribution of the Portfolio, the Ten Year Record, the Summary
of Performance Charts and the Attribution Analysis are set out on
pages 13 to 22.
Dividends and Results
The portfolio is managed actively in pursuit of capital growth.
Hence, in any one year the dividend income received from
investments will vary according to which stocks are owned during
the reporting period and so will the dividend that will be paid.
In order to continue to qualify as an investment company, the
Company is required by Section 1159 of the Corporation Tax Act
2010 to distribute sufficient net income so that it retains no more
than 15% of its net income in any reporting year.
The Company’s results for the year ended 31 August 2025 are set
out in the Income Statement on page 57. The revenue return was
12.28 pence and the capital return was 36.67 pence, giving a total
return of 48.95 pence per ordinary share.
The Board recommends that a final dividend of 6.84 pence per
ordinary share be paid on 13 January 2026 to shareholders
who appear on the register as at the close of business on
28November 2025 (ex-dividend date 27 November 2025). This
is in addition to the interim dividend of 3.36 pence per ordinary
share paid to shareholders on 19 June 2025.
Key Performance Indicators
The key performance indicators (“KPIs”) used to determine the
performance of the Company and which are comparable to those
reported by other investment companies are set out in the tables
below.
Shareholder Total Returns
Share price total return for the
year ended 31 August 2025
1 year
(%)
3 years
(%)
5 years
(%)
Fidelity Special Values PLC
1
+21.8 +59.9 +140.4
Benchmark
2
+12.6 +38.6 +77.7
Peer group
3
+9.8 +44.1 +69.7
Net Asset Value (“NAV”) Total Returns
NAV per ordinary share total
return for the year ended
31 August 2025
1 year
(%)
3 years
(%)
5 years
(%)
Fidelity Special Values PLC
1
+14.3 +50.2 +124.3
Benchmark
2
+12.6 +38.6 +77.7
Peer group
3
+6.0 +36.4 +64.3
Discount
Discount as at 31August 2025
(%)
2024
(%)
2023
(%)
Fidelity Special Values PLC
1
3.1 8.9 8.8
Peer group
3
5.7 9.3 11.4
Ongoing Charges
Ongoing charges for the year
ended 31 August
4
2025
(%)
2024
(%)
2023
(%)
Fidelity Special Values PLC
1
0.68 0.70 0.70
1 Alternative Performance Measures.
2 FTSE All-Share Index.
3 AIC UK All Companies sector (including Fidelity Special Values PLC).
4 Defined in the Glossary of Terms on page 94.
Sources: Fidelity and Datastream.
Strategic Report continued
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Fidelity Special Values PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
In addition to the KPIs set out on the previous page, the Board
also monitors the factors contributing to investment results, as set
out in the Attribution Analysis on page 22. Long-term performance
is also monitored and is set out in the Ten Year Record and the
Summary of Performance Charts on pages 19 to 21.
Principal Risks and Uncertainties and Risk Management
As required by provisions 28 and 29 of the 2018 UK Corporate
Governance Code, the Board has a robust ongoing process
for identifying, evaluating and managing the principal risks
and uncertainties faced by the Company, including those that
could threaten its business model, future performance, solvency
or liquidity. The Board, with the assistance of the Alternative
Investment Fund Manager (FIL Investment Services (UK) Limited/
the “Manager”), has developed a risk matrix which, as part of
the risk management and internal controls process, identifies
the key existing and emerging risks and uncertainties that the
Company faces.
The Board considers the risks listed on pages 26 to 29 as the
principal risks and uncertainties faced by the Company.
Emerging Risks
The Audit Committee continues to identify any new emerging risks
and take any action necessary to mitigate their potential impact.
The risks identified are placed on the Company’s risk matrix and
graded appropriately. This process, together with the policies
and procedures for the mitigation of existing and emerging risks,
is updated and reviewed regularly in the form of comprehensive
reports by the Audit Committee. The Board determines the nature
and extent of any risks it is willing to take in order to achieve the
Company’s strategic objectives.
Climate change, which refers to a large scale shift in the planet’s
weather patterns and average temperatures, continues to be
a key emerging as well as a principal risk confronting asset
managers and their investors. Globally, climate change effects
are already being experienced in the form of changing weather
patterns. Extreme weather events can potentially impact the
operations of investee companies, their supply chains and their
customers. The Board notes that the Manager includes ESG
considerations, including climate change, into the Company’s
investment process. The Board will continue to monitor how this
may impact the Company as a risk to investment valuations and
potentially shareholder returns.
The Board, together with the Manager, is also monitoring the
emerging risks posed by the rapid advancement of artificial
intelligence (“AI”) and technology and how it may threaten the
Company’s activities and its potential impact on the portfolio and
investee companies. AI can provide asset managers powerful
tools, such as enhancing data analysis risk management, trading
strategies, operational efficiency and client servicing, all of
which can lead to better investment outcomes and more efficient
operations. However, with these advances in computing power
that will impact society, there are risks from its increasing use and
manipulation with the potential to harm, including a heightened
threat to cybersecurity.
Other emerging risks may continue to evolve from unforeseen
geopolitical and economic events.
Emerging Risks – Manager’s Role
The Manager also has responsibility for risk management for
the Company. It works with the Board to identify and manage
the principal and emerging risks and uncertainties and to ensure
that the Board can continue to meet its UK corporate governance
obligations.
Annual Review of the Risk Register
The Company has a full risk register which includes less material
risks which the Board reviews at least annually.
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PRINCIPAL RISKS
1. Economic, Political and Market Risks
Trend: Increased
Description and Impact
• The Company and its assets may be affected by market
and economic risks. These include market downturns,
interest rate movements, inflation and market events, such
as the UK economic recovery. Inflation and economic
instability continue to lead to a prolonged cost-of-living crisis
and may potentially impact investors’ risk appetite.
• The Company is exposed to several geopolitical risks. The
global geopolitical landscape continues to change and is
largely shaped by the ongoing effects of armed conflicts,
tariff wars, deglobalisation trends and significant supply
disruption. The Middle East and Russia are both significant
net exporters of oil, natural gas and a variety of soft
commodities and supply limitations have fuelled global
inflation and economic instability, specifically within Western
nations. The ongoing conflicts add to geopolitical risk and
economic instability, including social unrest across Europe
and the macro-economic uncertainty continues to impact
Western investment appetite.
• Heightened tensions between the U.S. and global trading
partners, particularly China, continue to impact markets.
The US/China relationship is also impacted by the dynamic
of the balance between national security and economic
interests and could lead to higher volatility, sanctions for
broader markets, technology and oil in particular, as well as
risk of changes in foreign policies across the globe.
• China’s outlook for ‘controlled stabilisation’ remains
intact, supported by targeted policy measures. China’s
growth stabilisation is more credible post-deal (i.e. the
government’s commitment to implementing strategic
economic measures to achieve steady growth and
economic resilience), and the agreement with the U.S.
reduces pressure on China to deliver new fiscal easing.
Exports and industrial activities continue to outperform
despite the slower than expected recovery in domestic
demand.
Mitigation
• The Company’s portfolio is made up mainly of listed
securities. The Portfolio Manager’s success or failure to
protect and increase the Company’s value against the
market, economic and political background is core to the
Company’s continued success. His investment philosophy of
stock-picking and investing in attractively valued companies
should outperform the Benchmark over time.
• The risk from the likely effects of unforeseen economic and
market events is somewhat mitigated by the Company’s
investment trust structure which means no forced sales
need to take place to deal with any redemptions. Therefore,
investments can be held over a longer time horizon.
• The Board reviews market, economic and political risks and
legislative changes at each Board meeting. The Portfolio
Manager provides an investment review at each meeting
which includes a review of the economic and political
environment, and any risks and challenges faced by the
Company.
• The Board regularly reviews the impact of gearing and
derivatives, and has comfort that the portfolio is sufficiently
diversified by sector and number of holdings.
• Risks to which the Company is exposed to in the market
and currency risk category are included in Note 17 to
the Financial Statements on pages 72 to 78 together with
summaries of the policies for managing these risks. It is the
Company’s policy not to hedge the underlying currencies of
the holdings in the portfolio but rather to take the currency
risk into consideration when making investment decisions.
2. Competition Risks and Marketplace Threats Impacting Business Growth
Trend: Increased
Description and Impact
• There is increased activity around mergers and acquisitions
across the investment company marketplace and alternative
investment offerings (including passive vehicles) which could
influence the demand for the Company’s shares. In addition,
cheaper capital and the search for technology scale is also
likely to mean increased consolidation.
• There is a risk of costly shareholder activism in the
investment company sector, pursuing goals that may not be
in the interests of most shareholders.
Mitigation
• The Board, the Company’s Broker and the Manager closely
monitor industry activity, the peer group and the share
register.
• An annual review of strategy is undertaken by the Board
to ensure that the Company continues to offer a relevant
product to investors.
Strategic Report continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
3. Investment Performance Risk (including the use of Derivatives and Gearing)
Trend: Stable
Description and Impact
• The achievement of the Company’s investment performance
objective relative to the market requires the taking of
risk, such as investment strategy, asset allocation and
stock selection, and may lead to NAV and share price
underperformance compared to the Benchmark and/or
peer group companies.
• The Board relies on the Portfolio Manager’s skills and
judgement to make investment decisions based on research
and analysis of individual stocks and sectors and there is a
risk of volatility of performance in the short-term. Continued
underperformance could lead to the Company and its
objective becoming unattractive to investors.
• Derivative instruments are used to enhance investment
returns. The principal risk is that the Portfolio Manager fails
to use gearing effectively, resulting in a failure to outperform
in a rising market or to underperform in a falling market.
The Company gears using derivatives including long CFDs
which provide greater flexibility and are generally cheaper
than bank loans.
Mitigation
• The Portfolio Manager is responsible for actively monitoring
the portfolio selected in accordance with the asset allocation
parameters and seeks to ensure that individual stocks meet
an acceptable risk/reward profile.
• The Board reviews Fidelity’s compliance with agreed
investment restrictions; investment performance and risk;
relative performance; the portfolio’s risk profile; and whether
appropriate strategies are employed to mitigate any
negative impact of substantial changes in the markets. The
Board also regularly canvasses major shareholders for their
views with respect to company matters.
• The Board has put in place policies and limits to control
the Company’s use of derivatives and exposures. These are
monitored daily by the Manager’s Compliance team and
regular reports are provided to the Board. Further detail
on derivative instruments risk is included in Note 17 to the
Financial Statements on pages 72 to 78.
• The Board regularly considers the level of gearing and
gearing risk. The Investment Policy sets the gearing limits
within which the Manager must operate.
4. Changes in Legislation, Taxation or Regulation
Trend: Stable
Description and Impact
• Changes in legislation, taxation or regulation, or other
external influence that require changes to the investment
trust structure of the Company are a significant risk for the
Company.
• A breach of Section 1158 of the Corporation Tax Act 2010
could lead to a loss of investment trust status resulting in the
Company being subject to tax on capital gains.
• There have been increased concerns about investment cost
disclosures and their impact on the industry. There is a risk
that the FCA’s proposed Consumer Composite Investment
(CCI) regime may make investment companies more
complex for consumers and other investors to understand
and increase the regulatory burden imposed on the sector
if it proceeds with some of the proposals as drafted.
Mitigation
• The Board and Manager closely monitor regulatory, taxation
and legislative changes, with developments impacting the
Company summarised in the form of regular reporting to the
Board.
• The Manager monitors Section 1158 status to ensure any
issues are escalated to the Board and addressed promptly.
• The Manager participates in industry discussions regarding
regulatory changes impacting investment companies,
and regulatory developments continue to be monitored
and managed by Fidelity through active lobbying and
negotiations as well as a robust change management
process.
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5. Cybercrime and Information Security
Trend: Stable
Description and Impact
• There is cybersecurity risk from cyberattacks or threats to
the functioning of global markets and to the Manager’s own
business model, including its and the Company’s outsourced
suppliers.
• There is risk of cybercrime such as phishing, remote access
threats, extortion, and denial-of-service attacks from highly
organised criminal networks and sophisticated ransomware
operators, including threats such as service disruption/
extortion attacks (DDoS, ransomware), financial theft and
data breaches, regulatory non-compliance, reputational
damage/loss of customer trust. The threat environment
continues to evolve rapidly, including the heightened
potential threat from nation state backed threat actor due to
geopolitical tensions from the current wars in Ukraine and
Gaza. Ransomware continues to increase globally and is
also becoming a supply chain risk.
• There are additional risks from the increased use of artificial
intelligence (AI).
Mitigation
• The risk is monitored by the Board with the help of the
Manager’s global cybersecurity team and their extensive
Strategic Cyber and Information Security programme and
assurances from outsourced suppliers.
• The Manager has established a comprehensive framework
of information security policies and standards which provide
a structured approach to identify, prevent, and respond
to information security threats. The framework ensures
consistency in Fidelity’s security measures, enhances
its ability to adapt to evolving/emerging threats, and
compliance with changing regulatory requirements. The
Company’s other service providers also have similar
measures in place.
• Key performance indicators and metrics have been
developed by the Manager to monitor the overall efficacy of
cybersecurity processes and controls and to further enhance
the Manager’s cybersecurity strategy and operational
resilience.
6. Business Continuity and Crisis Management
Trend: Stable
Description and Impact
• There is business process disruption risk from continued
threats of cyberattacks, geopolitical events, outages, fire
events and natural disasters, resulting in financial and/
or reputational impact to the Company affecting the
functioning of the business.
• The Company relies on a number of third-party service
providers, principally the Registrar, Custodian and
Depositary who may be subject to cybercrime.
Mitigation
• Fidelity has Business Continuity and Crisis Management
Frameworks in place to deal with business disruption and
assure operational resilience.
• All third-party service providers are subject to a risk-
based programme of risk oversight and internal audits by
the Manager and their own internal controls reports are
received an annual basis and any concerns are investigated.
• The Board regularly reviews the services provided by third
parties.
7. Operational Risks
Trend: Stable
Description and Impact
• There is risk of financial losses or reputational damage
from inadequate or failed internal processes, people and
systems or from external parties and events.
Mitigation
• Fidelity’s Operational Risk Management Framework is
designed to pro-actively prevent, identify and manage
operational risks inherent in most activities.
• Fidelity uses robust systems and procedures dedicated to
its operational processes. Its risk management structure
is designed according to the FCA’s three lines of defence
model.
Strategic Report continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
8. Key Person Risk and Operational Support Risks
Trend: Stable
Description and Impact
• The loss of the Portfolio Manager or other key individuals
could lead to potential performance and/or operational
issues.
• The Portfolio Manager, Alex Wright, has a differentiated
style in relation to his peers. This style is intrinsically linked
with the Company’s investment philosophy and strategy,
and therefore, the Company has a key person dependency
on him.
• There is also a risk that the Manager has inadequate
succession plans for other key operational individuals.
Mitigation
• The Company has a Co-Portfolio Manager, Jonathan
Winton, who works alongside the Portfolio Manager,
and has extensive experience in the same markets and
companies and shares a common investment approach
and complementary investment experience with the Portfolio
Manager. The Portfolio Manager is also supported by an
Investment Specialist and a team of Fidelity analysts.
• The Manager identifies key dependencies which are then
addressed through succession plans, particularly for portfolio
managers.
9. Discount Control Risk
Trend: Stable
Description and Impact
• The price of the Company’s shares and its discount to NAV
are factors which are not completely within the Company’s
control.
• The Board has a discount management policy and some
short-term influence over the discount may be exercised by
carrying out share repurchases at acceptable prices and
within the parameters set by the Board.
• In considering the risk that the discount to NAV poses to
shareholder value and returns, both the absolute level of
the discount and the amount relative to the Company’s peer
group and the wider market are considered.
Mitigation
• The Board reviews the investment strategy, investment
performance and the marketing approach, given the
influence of all these factors on the discount.
• The Company’s share price, NAV and discount volatility
are monitored daily by the Manager and the Company’s
Broker and considered by the Board on a regular basis.
The demand for shares can be influenced through good
performance and an active investor relations programme.
• The Board regularly reviews the Company’s share register
and the Chairman meets with large shareholders.
• Discretionary repurchases of ordinary shares are made
within guidelines set by the Board, and considering
prevailing market conditions.
Continuation Vote
A continuation vote takes place every three years. There is a risk
that shareholders do not vote in favour of continuation during
periods when performance of the Company’s NAV and share
price is poor. The last continuation vote was at the AGM held on
14 December 2022, and 99.89% of shareholders voted in favour
of the continuation of the Company. The next continuation vote
will take place at this year’s AGM on 11 December 2025 and the
Directors expect the vote to be passed.
Viability Statement
In accordance with provision 31 of the 2018 UK Corporate
Governance Code, the Directors have assessed the prospects of
the Company over a longer period than the twelve month period
required by the “Going Concern” basis. The Company is an
investment trust with the objective of achieving long-term capital
growth. The Board considers that five years is an appropriate
investment horizon to assess the viability of the Company,
although the life of the Company is not intended to be limited to
this or any other period.
In making an assessment of the viability of the Company, the
Board has considered the following:
• The ongoing relevance of the investment objective in
prevailing market conditions;
• The Company’s level of gearing;
• The Company’s NAV and share price performance
compared to its Benchmark;
• The principal and emerging risks and uncertainties facing
the Company and their potential impact, as set out on pages
25 to 29;
• The likely future demand for the Company’s shares;
• The Company’s share price discount to the NAV and the
Board’s discount management policy;
• The liquidity of the Company’s portfolio;
• The level of income generated by the Company;
• Future income and expenditure forecasts; and
• The Company’s continuation vote.
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The Company’s performance for the five year reporting period
to 31 August 2025 was strong and well ahead of the Benchmark.
The NAV total return was +124.3% and the share price total return
was +140.4% compared to the Benchmark total return of +77.7%.
The Board regularly reviews the investment policy and considers
whether it remains appropriate.
The Board has concluded that there is a reasonable expectation
that the Company will be able to continue in operation and meet
its liabilities as they fall due over the next five years based on the
following considerations:
• The Investment Manager’s compliance with the Company’s
investment objective and policy, its investment strategy and
asset allocation;
• The Company’s portfolio mainly comprises of readily
realisable securities which can be sold to meet funding
requirements if necessary;
• The Board’s discount management policy; and
• The ongoing processes for monitoring operating costs
and income which are considered to be reasonable in
comparison to the Company’s total assets.
In preparing the Financial Statements, the Directors have
considered the continued impact of climate change and potential
emerging risks from the use of artificial intelligence as detailed
on page 25. The Board has also considered the impact of
regulatory changes, unforeseen market events, geopolitical issues
and the ongoing global implications of the war in Ukraine and
the Middle East conflict and how this may affect the Company.
In addition, the Directors’ assessment of the Company’s ability
to operate in the foreseeable future is included in the Going
Concern Statement which is included in the Directors’ Report on
page 34.
PROMOTING THE SUCCESS OF THE COMPANY
Under Section 172(1) of the Companies Act 2006, the Directors
of a company must act in a way they consider, in good faith,
would be most likely to promote the success of the Company
for the benefit of its members as a whole, and in doing so have
regard (amongst other matters) to the likely consequences of any
decision in the long-term; the need to foster relationships with the
Company’s suppliers, customers and others; the impact of the
Company’s operations on the community and the environment;
the desirability of the Company maintaining a reputation for high
standards of business conduct; and the need to act fairly as
between members of the company.
As an externally managed investment company, the Company
has no employees or physical assets, and a number of its
functions are outsourced to third parties. The key outsourced
function is the provision of investment management services
by the Manager, but other professional service providers
support the Company by providing administration, custodial,
banking, accounting and audit services. The Board considers
the Company’s key stakeholders to be the existing and potential
shareholders, the external appointed Manager (FIL Investment
Services (UK) Limited) and other third-party professional
service providers. The Board considers that the interest of
these stakeholders is aligned with the Company’s objective of
delivering long-term capital growth to investors, in line with the
Company’s stated objective and strategy, while providing the
highest standards of legal, regulatory and commercial conduct.
The Board, with the Portfolio Manager, sets the overall investment
strategy and reviews this at an annual strategy day which is
separate from the regular cycle of board meetings. In order to
ensure good governance of the Company, the Board has set
various limits on the investments in the portfolio, whether in the
maximum size of individual holdings, the use of derivatives, the
level of gearing and others. These limits and guidelines are
regularly monitored and reviewed and are set out on pages 23
and 24.
The Board receives regular reports from the Company’s Broker
which covers market activity, how the Company compares
with its peers in its sector on performance, discount and share
repurchase activity, an analysis of the Company’s share register
and market trends.
The Board places great importance on communication with
shareholders. The Annual General Meeting (“AGM”) provides the
key forum for the Board and the Portfolio Manager to present
to the shareholders on the Company’s performance and future
plans and the Board encourages all shareholders to attend
in person or virtually and raise any questions or concerns.
The Chairman and other Board members are available to
meet shareholders as appropriate. Shareholders may also
communicate with Board members at any time by writing to
them at the Company’s registered office at FIL Investments
International, Beech Gate, Millfield Lane, Tadworth, Surrey KT20
6RP or via the Company Secretary in writing at the same address
or by email at investmenttrusts@fil.com.
The Portfolio Manager meets with major shareholders,
potential investors, stock market analysts, journalists and other
commentators throughout the year. These communication
opportunities help inform the Board in considering how best to
promote the success of the company over the long-term.
The Board seeks to engage with the Manager and other service
providers and advisers in a constructive and collaborative way,
promoting a culture of strong governance, while encouraging
open and constructive debate, in order to ensure appropriate
and regular challenge and evaluation. This aims to enhance
service levels and strengthen relationships with service providers,
with a view to ensuring shareholders’ interests are best served,
by maintaining the highest standards of commercial conduct
while keeping cost levels competitive.
Whilst the Company’s direct operations are limited, the Board
recognises the importance of considering the impact of the
Company’s investment strategy on the wider community and
environment and considers the Manager’s ESG approach.
Strategic Report continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
In addition to ensuring that the Company’s investment objective
was being pursued, key decisions and actions taken by the
Directors during the reporting year, and up to the date of
approval of this report, have included:
• As part of the Board’s succession plan, appointing
Christopher Casey as a Non-Executive Director with effect
from 1 January 2025 to replace Nigel Foster who having
completed nine years on the Board on 1 September
2024 stepped down at the conclusion of the AGM on 12
December 2024;
• As part of the Board’s succession plan, initiating a
recruitment process to replace Dean Buckley as a Non-
Executive Director when he steps down from the Board as
Chairman and Non-Executive Director at the conclusion
of the AGM on 11 December 2025. His replacement as a
Non-Executive Director will be announced in due course;
• The decision to appoint Claire Boyle as Chair of the Board
to replace Dean Buckley from 11 December 2025 and for
Christopher Casey to replace her as Chair of the Audit
Committee on the same date. Mr Casey will also replace
Mrs Boyle as Senior Independent Director;
• The decision to pay an interim dividend of 3.36 pence per
share and to propose the payment of a final dividend of
6.84 pence per share (a total of 10.20 pence per share). This
maintains the Company’s 16 year track record of increasing
dividends, while retaining funds for reinvestment, consistent
with the objective of long-term capital growth;
• Authorising the repurchase of 1,050,000 ordinary shares
into Treasury up to the latest practicable date of this Annual
Report in line with the Board’s discount management policy;
• Carrying out an audit tender as the current Auditor will
have been in place for 10 years in November this year and
proposing to appoint PricewaterhouseCoopers LLP as the
Company’s auditor from and including the financial year
ending 31 August 2026;
• Meetings by the Chairman with some of the Company’s key
shareholders during the reporting year; and
• The decision to once again hold a hybrid AGM in 2025 so
as to make it more accessible to those investors who are
unable or prefer not to attend in person.
Board Diversity
The Board’s overriding intention is to ensure that it is made up
of the best combination of people in order to achieve long-term
capital growth for the Company’s shareholders from an actively
managed portfolio of investments. To this effect, the Board, as
part of its succession plan, will continue to appoint individuals
who, together as a Board, will aim to ensure the continued
optimal promotion of the Company in the marketplace. Due
regard will be given to the benefit of diversity on the Board,
including gender and ethnicity.
The Board has taken into consideration the FCA’s UK Listing Rules
requirements (UKLR 6.6.6(9), (10) and (11)) regarding the targets
on board diversity that:
• at least 40% of individuals on the Board are women;
• at least one senior Board position (chairman, chief executive
officer (“CEO”), senior independent director or chief financial
officer (“CFO”)) is held by a woman; and
• at least one board member should be from a non-white
ethnic background, as defined by the Office of National
Statistics criteria.
The Board considers that as an externally managed investment
trust, with no CEO or CFO, the Chairman of the Company,
the Senior Independent Director and the Chair of the Audit
Committee to be senior positions.
As required by the FCA’s UK Listing Rules, the Company’s
reporting against these targets is set out in the tables below. The
data was collected on a self-identifying basis. As at 31 August
2025 and up to the date of this report, the target of 40% of
women on the Board, the target of at least one senior Board
position held by a woman and for at least one individual to be
from a minority ethnic background have been met.
Gender Reporting as at 31 August 2025
Number
of Board
Members
Percentage of
the Board
Number of
Senior Board
Positions
(Chair, Senior
Independent
Director and
Chair of Audit
Committee)
Men 3 60% 1
Women 2 40% 2
The Company is a FTSE 250 company and meets the
recommendations of the Parker Review Committee that each FTSE
250 company should have at least one director from an ethnic
minority background by 2024 so as to improve the ethnic and
cultural diversity of UK company boards as can be seen from the
table below. The Board also meets the UK Listing Rule and the
FCA’s targets that at least one Director is from an ethnic minority
background.
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Strategic Report continued
Ethnic Background Reporting as at 31 August 2025
Number
of Board
Members
Percentage of
the Board
Number of
Senior Board
Positions
(Chair, Senior
Independent
Director and
Chair of Audit
Committee)
White British
or other White
(including minority
white groups) 4 80% 3
Asian/Asian British 1 20% 0
CORPORATE AND SOCIAL RESPONSIBILITY
Environmental, Social and Governance (“ESG”) in the
Investment Process
The Board has contracted with Fidelity to provide the Company
with investment management and administrative services. The
Board believes that ESG considerations are an important input
into the assessment of the value of the Company’s investments.
The investment universe is undergoing significant structural change
and is likely to be impacted by increasing regulation as a result
of climate change and other social and governance factors. The
Board is committed to reviewing how the Manager applies ESG
factors in its investment process. The Fidelity group of companies
(including the Manager and Investment Manager) sets out its
commitment to responsible investing, and provides a copy of its
detailed Responsible Investing at www.fidelity.co.uk/sustainable/
sustainability-at-fidelity.
Socially Responsible Investment
The Manager’s primary objective is to produce superior financial
returns for the Company’s shareholders. It believes that high
standards of corporate social responsibility (CSR) make good
business sense and have the potential to protect and enhance
investment returns.
Corporate Engagement
The Board believes that the Company should, where appropriate,
take an active interest in the affairs of the companies in which it
invests and that it should exercise its voting rights at their general
meetings. It delegates the responsibility for corporate engagement
and shareholder voting to the Manager who updates the Board on
issues and activities. These activities are reviewed regularly by the
Manager’s corporate governance team.
Streamlined Energy and Carbon Reporting (SECR)
As an investment company with all its activities outsourced to
third parties, the Company’s own direct environmental impact is
minimal. The Company has no premises, consumes no electricity,
gas or diesel fuel and consequently does not have a measurable
carbon footprint. The Company is categorised as a low energy
user (less than 40MWH) under the Streamlined Energy & Carbon
Reporting regulations and therefore is not required to disclose any
energy and carbon information in this Annual Report.
Task Force on Climate-Related Financial Disclosures (TCFD)
Product reports of Task Force on Climate-related Financial
Disclosures (TCFD) issued by the Manager can be found on the
Company’s pages of the Manager’s website at www.fidelity.
co.uk/specialvalues.
FUTURE DEVELOPMENTS
Some trends likely to affect the Company in the future are also
common to many investment companies together with the impact
of regulatory change and emerging risks. The factors likely to affect
the Company’s future development, performance and positions are
set out in the Chairman’s Statement and the Portfolio Manager’s
Review on pages 2 to 10.
By Order of the Board
FIL Investments International
Secretary
5 November 2025
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Board of Directors
Dean Buckley
Chairman
(since 14 December 2022)
Appointed 3 November 2015
M N
Dean Buckley is Chairman of Alliance Witan PLC, a Non-Executive Director of Baillie
Gifford & Co Limited, and a Non-Executive Director of JPMorgan Emerging Markets
Investment Trust Limited. Until recently, he was also Chairman of Evelyn Partners
Fund Solutions Limited. He was previously Senior Independent Director and
Chairman of the Audit Committee and the Remuneration Committee of JPMorgan
Asia Growth & Income plc, a Non-Executive Director of Saunderson House Ltd and
Chief Executive Officer at Scottish Widows Investment Partnership. Prior to this,
he held several positions at HSBC Bank plc, including Chief Executive Officer for
HSBC Asset Management UK and Middle East and Chief Investment Officer for
HSBC Asset Management, European equities, and held a number of senior Fund
Manager positions at Prudential Portfolio Managers. He is a Fellow of the Institute
of Actuaries.
Claire Boyle
Chair of the Audit Committee
(since 12 December 2019)
Senior Independent Director
(since 12 December 2024)
Appointed 24 June 2019
A M N
Claire Boyle is Chair of Life Science REIT plc, Audit Chair of The Monks Investment
Trust PLC and a Non-Executive Director of Nippon Active Value Fund plc. She was
previously a Non-Executive Director and Chair of the Audit Committee of abrdn
Japan Investment Trust plc. She was a Partner at Oxburgh Partners LLP with
responsibility for the European Equity Hedge Fund and, prior to that, a European
Equity Fund Manager at American Express Asset Management. She started her
investment career with Robert Fleming Investment Management. She is a Fellow
of the Institute of Chartered Accountants, having worked in fraud investigations at
Coopers & Lybrand.
Ominder Dhillon
Appointed 23 June 2022
A M N
Ominder Dhillon is a Non-Executive Director of The City of London Investment
Trust plc. He was previously a Senior Advisor to IC Research and a Trustee to a
UK charity, Facing History & Ourselves. He has over 30 years’ experience of asset
management covering institutional, wholesale and retail channels. Until January
2020, he was Global Head of Institutional Distribution at M&G Investments and
prior to that, Managing Director of Global Business Development at sustainable
and impact investment specialist Impax Asset Management. Prior to Impax,
he was Head of UK & Ireland Institutional Distribution at Fidelity International,
Director Institutional Business Development at Scottish Widows Investment
Partnership and a Director and Portfolio Manager at John Morrell & Associates
Limited.
Christopher Casey
Appointed 1 January 2025
A M N
Christopher Casey is Chairman of CQS Natural Resources Growth and Income
plc, a non-executive Director and Chairman of the Audit Committee of Life
Settlement PLC and a Non-Executive Director of BlackRock Frontiers Investment
Trust plc. Until recently he was Chairman and Non-Executive Director of European
Smaller Companies Trust plc and a Non-Executive Director and Chairman of
the Audit Committee of Mobius Investment Trust plc. He also served as Audit
Committee Chairman and then Chairman of China Polymetallic Mining Ltd, Audit
Committee Chairman at Latchways plc, and Audit committee Chairman and then
Interim Chairman at Eddie Stobart Logistics plc, and Audit Committee Chairman
at BlackRock American Income Trust plc. He is a Chartered Accountant and was
previously a Partner at KPMG LLP.
Alison McGregor
Appointed 1 January 2020
A M N
Alison McGregor is Chair of The Malcolm Group, a Non-Executive Director of the
Scottish Football Association and a Non-Executive Director of Bell Global Property
Services (UK) Limited. She was previously the Chair and a Non-Executive Director
of Scottish Power Energy Networks. Until December 2019, she was CEO of HSBC
Scotland. Prior roles include Managing Director at Corporate Banking North
HSBC, Head of Corporate Banking Clydesdale and Yorkshire Bank and 24 years’
experience in various banking roles at Barclays Bank PLC. Prior board roles
include Non-Executive Director of Beatson Cancer Charity, Chair of the Scottish
Apprenticeship Advisory Board, Non-Executive Director of CBI and Non-Executive
Director of Scottish Enterprise. In 2018, she received the Women in Banking and
Finance UK award for Achievement and was recognised by Action for Children
as Woman of Influence in Business. In 2017, she was awarded the Scotland
Corporate Leader of the Year Award at The Scottish Women’s Awards.
Committee membership key
A
Audit
M
Management Engagement
N
Nomination Committee Chair
All Directors are Non-Executive Directors and all are independent.
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Directors’ Report
The Directors have pleasure in presenting their report together
with the audited Financial Statements of the Company for the
year ended 31 August 2025.
The Company was incorporated in England and Wales as
a public limited company on 27 September 1994 under the
name of Fidelity Special Values PLC with the registered number
2972628 and commenced business as an investment trust on
17 November 1994.
Management Company
FIL Investment Services (UK) Limited (“FISL”) is the Company’s
appointed Alternative Investment Fund Manager (the
“AIFM”/“Manager”). FISL, as the Manager, has delegated
the portfolio management of assets and the role of company
secretary to FIL Investments International.
The Alternative Investment Fund Management and Secretarial
Services Agreement (the “Management Agreement”) will
continue unless and until terminated by either party giving to
the other not less than six months’ notice in writing. However,
it may be terminated without compensation if the Company is
liquidated pursuant to the procedures laid down in the Articles
of Association of the Company. The Management Agreement
may also be terminated forthwith as a result of a material
breach of the Agreement or on the insolvency of the Manager
or the Company. In addition, the Company may terminate the
Agreement by sixty days’ notice if the Manager ceases to be a
subsidiary of FIL Limited. FIL Limited has no beneficial interest in
the shares of the Company (2024: nil).
The Board reviews the Management Agreement at least annually
and details are included in the Corporate Governance Statement
on pages 40 and 41.
Management Fee
Since 1 January 2021, the management fee is a single fee of
0.60% of net assets.
Fees for the reporting year were £6,857,000 (2024: £6,095,000)
and are disclosed in Note 4 on page 64.
The Board
Dean Buckley, Claire Boyle, Ominder Dhillon and Alison
McGregor served on the Board throughout the year ended
31 August 2025. Christopher Casey has served on the Board
since his appointment on 1 January 2025. Nigel Foster served on
the Board until he stepped down after the AGM on 12 December
2024. A brief description of all serving Directors as at the date
of this Annual Report is shown on page 33 and indicates their
qualifications for Board membership.
In line with the Board’s succession plan, Dean Buckley will not be
seeking re-election at the AGM on 11 December 2025.
Directors’ and Officers’ Liability Insurance
In addition to benefits under the Manager’s global Directors’ and
Officers’ liability insurance arrangements, the Company maintains
additional insurance cover for its Directors under its own policy
as permitted by the Companies Act 2006.
Professional Negligence Liability Risks
The requirement to cover potential liability risks arising from
professional negligence is covered by the Manager’s own funds.
Sufficient capital above the regulatory limit is held which is
monitored by the board of the Manager.
Going Concern Statement
The Directors have considered the Company’s investment
objective, risk management policies, liquidity risk, credit risk,
capital management policies and procedures, the nature of
its portfolio and its expenditure and cash flow projections. The
Directors, having considered the liquidity of the Company’s
portfolio of investments (being mainly securities which are readily
realisable) and the projected income and expenditure, are
satisfied that the Company is financially sound and has adequate
resources to meet all of its liabilities and ongoing expenses and
continue in operational existence for the foreseeable future. The
Board has, therefore, concluded that the Company has adequate
resources to continue to adopt the going concern basis for the
period to 30 November 2026 which is at least twelve months
from the date of approval of the Financial Statements. This
conclusion also takes into account the Board’s assessment of
the ongoing risks from significant global geopolitical and market
events and regulatory changes that could impact the Company’s
performance, prospects and operations.
Accordingly, the Financial Statements of the Company have been
prepared on a going concern basis.
The prospects of the Company over a period longer than twelve
months can be found in the Viability Statement on pages 29
and 30.
Disclosure of Information to the Company’s Auditor
As required by Section 418 of the Companies Act 2006, each
Director in office as at the date of this Annual Report confirms
that:
a)
so far as each Director is aware, there is no relevant audit
information of which the Company’s Auditor is unaware; and
b) each Director has taken all the steps that ought to have
been taken as a Director to make himself/herself aware of
any audit information, and to establish that the Company’s
Auditor is aware of that information.
Auditor’s Appointment
As the current Auditor, Ernst & Young LLP, will have been in place
for 10 years in November 2025. An audit tender process was
carried out during the year following which the Board proposes
that PricewaterhouseCoopers LLP (“PwC”) should be selected to
act as the Company’s auditor from and including the financial
year ending 31 August 2026. A resolution will be proposed
to appoint PwC as the Company’s auditor at the AGM on
11 December 2025.
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Articles of Association
Any changes to the Company’s Articles of Association must be
made by a special resolution. A special resolution to amend
the Company’s Articles of Association is being proposed at
this year’s AGM on 11 December 2025. Further details of the
proposed changes are on pages 37 and 38.
Corporate Governance
The Corporate Governance Statement on pages 39 to 42 forms
part of this report.
Registrar, Custodian and Depositary Arrangements
The Company has appointed MUFG Corporate Markets (name
change from Link Group on 20 January 2025) as its Registrar to
manage the Company’s share register, JPMorgan Chase Bank
as its Custodian, which is primarily responsible for safeguarding
the Company’s assets, and J.P. Morgan Europe Limited as its
Depositary, which is primarily responsible for oversight of the
custody of investment funds and the protection of investors’
interests. Fees paid to these service providers are disclosed in
Note 5 on page 65.
Share Capital
The Company’s issued share capital comprises ordinary shares
of 5 pence each which are fully listed on the London Stock
Exchange. As at 31 August 2025, the issued share capital of the
Company was 324,098,920 ordinary shares (2024: 324,098,920)
of which 1,050,000 shares (2024: nil) are held in Treasury.
Therefore, the number of ordinary shares with voting rights was
323,048,920 (2024: 324,098,920).
Premium/Discount Management: Enhancing Shareholder
Value
The Board actively manages the Company’s level of premium/
discount. If the Company is trading at a discount, it seeks to
maintain the discount in single digits in normal market conditions.
The Board seeks authority from shareholders each year to issue
shares at a premium or to repurchase shares at a discount to
the NAV either for cancellation or for holding in Treasury. The
Board will exercise these authorities if deemed to be in the best
interests of shareholders at the time.
Share Issues
The Company did not issue any ordinary shares in the year to
31 August 2025 (2024: nil). Since the year end and as at the date
of this Annual Report, no ordinary shares have been issued.
The authorities to issue shares and to disapply pre-emption rights
expire at the AGM on 11 December 2025 and resolutions to
renew these authorities will be put to shareholders at this AGM.
Share Repurchases
During the year ended 31 August 2025, the Company
repurchased 1,050,000 ordinary shares (2024: nil) into Treasury.
Since the year end and as at the latest practicable date of this
Annual Report, no shares have been repurchased into Treasury
or for cancellation.
The authority to repurchase shares expires at the AGM on
11 December 2025 and a resolution to renew the authority to
purchase shares, either for cancellation or to buy into Treasury,
will be put to shareholders at this AGM.
Substantial Share Interests
As at 31 August 2025 and 30 September 2025, notification had
been received that the shareholders listed in the table below
held more than 3% of the voting share capital of the Company.
Shareholders
31 August
2025
30 September
2025
Fidelity Platform Investors 17.88 17.84
Interactive Investor 9.89 10.03
Evelyn Partners 9.29 9.24
Rathbones 9.10 9.11
Hargreaves Lansdown 8.63 8.77
AJ Bell 4.50 4.55
RBC Brewin Dolphin 4.28 4.14
Charles Stanley 3.26 3.29
An analysis of shareholders as at 31 August 2025 is detailed in
the table below.
Shareholders as at 31 August 2025
% of voting
share capital
Private Shareholders
1
88.75
Institutions 9.27
Insurance 0.93
Pension 0.88
Other 0.17
1 Includes Fidelity Platform Investors (17.88%).
Additional Information Required in the Directors’ Report
Information on proposed dividends, financial instruments,
disclosure on Streamlined Energy and Carbon Reporting (SECR)
and Task Force on Climate-Related Financial Disclosures (TCFD) is
set out in the Strategic Report on pages 23 to 32.
Responsibility as an Institutional Shareholder
The Board has adopted the Manager’s Principles of Ownership
in relation to investments. These Principles include the pursuit
of an active investment policy through portfolio management
decisions, voting on resolutions at general meetings and
maintaining a continuing dialogue with the management of
investee companies. Fidelity International is a signatory to
the UK Stewardship Code which sets out the responsibilities
of institutional shareholders and agents. Further details of the
Manager’s Principles of Ownership and voting may be found at
www.fidelity.co.uk.
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Relations with Shareholders
Communication with shareholders is given a high priority by
the Board and it liaises with the Manager and the Company’s
Broker who are in regular contact with the Company’s major
institutional investors to canvass shareholder opinion and to
communicate its views to shareholders. All Directors are made
aware of shareholders’ concerns and the Chairman, the Senior
Independent Director and, where appropriate, other Directors,
are available to meet with shareholders to discuss strategy
and governance. The Board regularly monitors the shareholder
profile of the Company and receives regular reports from the
Manager on meetings attended with shareholders and any
concerns raised in such meetings. The Board aims to provide
the maximum opportunity for dialogue between the Company
and shareholders. If any shareholder wishes to contact a
member of the Board directly, they should either email the
Company Secretary at investmenttrusts@fil.com or in writing at
FIL Investments International, Beech Gate, Millfield Lane, Lower
Kingswood, Tadworth, Surrey KT20 6RP. The Company Secretary
will attend to any enquiries promptly and ensure that they are
directed to the Chairman, Senior Independent Director or the
Board as a whole, as appropriate.
The Board encourages all shareholders to attend the Company’s
AGM on 11 December 2025, details of which can be found on
page 6.
Alex Wright, the Portfolio Manager, will be making a presentation
to shareholders highlighting the achievements and challenges
of the year past and the prospects for the year to come. He
and the Board will be very happy to answer any questions
that shareholders may have. Copies of his presentation can be
requested by email at investmenttrusts@fil.com or in writing
to the Secretary at FIL Investments International, Beech Gate,
Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
The Notice of Meeting on pages 84 to 87 sets out the business
of the AGM and the special business resolutions are explained
more fully on pages 37 and 38. A separate resolution is
proposed on each substantially separate issue including the
Annual Report and Financial Statements. The Notice of Meeting
and related papers are sent to shareholders at least 20 working
days before the AGM.
Voting Rights in the Company’s Shares
Every person entitled to vote on a show of hands has one vote.
On a poll every shareholder who is present in person or by proxy
or representative has one vote for every ordinary share held. At
general meetings, all proxy votes are counted and, except where
a poll is called, proxy voting is reported for each resolution after
it has been dealt with on a show of hands. The proxy voting
results are disclosed on the Company’s page of the Manager’s
website at www.fidelity.co.uk/specialvalues after the AGM.
ANNUAL GENERAL MEETING – THURSDAY, 11 DECEMBER 2025
AT 11.00 AM
THIS SECTION IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you
should seek your own financial advice from your stockbroker,
bank manager, solicitor, accountant or other financial
adviser authorised under the Financial Services and Markets
Act 2000.
The AGM of the Company will be held at 11.00 am on Thursday,
11 December 2025 at 4 Cannon Street, London EC4M 5AB and
virtually via the online Lumi AGM meeting platform. Full details of
the meeting are given in the Notice of Meeting on pages 84 to 87.
For those shareholders who are unable to attend in person, we
will live-stream the formal business and presentations of the
meeting online.
Properly registered shareholders joining the AGM virtually will
be able to vote on the proposed resolutions. Please see Note 9
to the Notes to the Notice of Meeting on pages 86 and 87 for
details on how to vote virtually. Investors viewing the AGM online
will be able to submit live written questions to the Board and the
Portfolio Manager and we will answer as many as possible at an
appropriate juncture during the meeting.
Further information and links to the Lumi platform
may be found on the Company’s website
www.fidelity.co.uk/specialvalues. On the day of the AGM,
in order to join electronically and ask questions via the Lumi
platform, shareholders will need to connect to the website at
https://meetings.lumiconnect.com/100-720-059-199.
We urge shareholders to vote and make use of the proxy form
provided. Please note that investors on platforms, such as Fidelity
Personal Investing, Hargreaves Lansdown, Interactive Investor
or AJ Bell Youinvest, will need to request attendance at the
AGM in accordance with the policies of your chosen platform.
They may request that you submit electronic votes in advance
of the meeting. If you are unable to obtain a unique IVC and
PIN from your nominee or platform, we will also welcome
online participation as a guest. Once you have accessed
https://meetings.lumiconnect.com/100-720-059-199 from your
web browser on a tablet or computer, you should then select the
‘Guest Access’ option before entering your name and who you
are representing, if applicable. This will allow you to view the
meeting and ask questions, but you will not be able to vote.
Directors’ Report continued
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Fidelity Platform Investors - Voting at AGMs
If you hold your shares in the Company through the Fidelity
Platform, then Fidelity passes on to you the right to vote on the
proposed resolutions at the Company’s AGM. Fidelity Platform
Investors are advised to vote online via the Broadridge Service
(a company that specialises in investor voting facilities). Investors
can sign up to this facility via their Fidelity Investor Account.
Proxy Voting
A paper Proxy Form will be sent to all shareholders who hold
shares on the main share register. This will assist shareholders to
vote in advance of the meeting should they decide not to attend
in person.
If you have sold, transferred or otherwise disposed of all your
shares in the Company, you should pass this document, together
with any accompanying documents, as soon as possible to the
purchaser or transferee, or to the stockbroker, bank or other
agent through whom the sale or transfer was effected, for onward
transmission to the purchaser or transferee.
At the AGM on 11 December 2025, resolutions will be proposed
relating to the items of business set out in the Notice of Meeting
on pages 84 and 85, including the items of special business
summarised below and on the next page.
Authority to Allot Shares
Resolution 11 is an ordinary resolution and provides the Directors
with a general authority to allot securities in the Company
up to an aggregate nominal value of £1,620,494. If passed,
this resolution will enable the Directors to allot a maximum of
32,409,880 ordinary shares which represents approximately 10%
of the issued ordinary share capital of the Company (including
Treasury shares) as at 5 November 2025 and to impose any
limits or restrictions and make any arrangements which they
consider necessary or appropriate to deal with Treasury shares,
fractional entitlements, record dates, legal, regulatory or practical
problems in, or under the laws of, any territory or any other
matter. The Directors would not intend to use this power unless
they considered that it was in the interests of shareholders to
do so. Any shares issued would be at NAV per share or at a
premium to NAV per ordinary share.
Authority to Disapply Pre-Emption Rights
Resolution 12 is a special resolution disapplying pre-emption
rights and granting authority to the Directors, without the need
for further specific shareholder approval, to make allotments
of equity securities or sale of Treasury shares for cash up to
an aggregate nominal value of £1,620,494 (including Treasury
shares) (approximately 10% of the issued ordinary share capital
of the Company as at 5 November 2025 and equivalent to
32,409,880 ordinary shares).
Authority to Repurchase Shares
Resolution 13 is a special resolution which renews the Company’s
authority to purchase up to 14.99% (48,425,020) of ordinary
shares in issue (excluding Treasury shares) on 5 November 2025
either for immediate cancellation or for retention as Treasury
shares at the determination of the Directors. Once shares are
held in Treasury, the Directors may only dispose of them in
accordance with the relevant legislation by subsequently selling
the shares for cash or by cancelling the shares. Purchases of
ordinary shares will be at the discretion of the Directors and
within guidelines set from time to time by them in the light of
prevailing market conditions. Purchases will only be made in the
market at prices below the prevailing NAV per ordinary share.
Continuation Vote
Resolution 14 is an ordinary resolution regarding the continuation
of the Company as an investment trust for a further three years.
The Directors expect this continuation vote to pass.
Proposed Changes to the Company’s Articles of Association
Resolution 15 is a special resolution regarding the adoption of
the New Articles of Association (“New Articles”) by the Company.
Summarised below are the principal changes proposed to be
introduced through the adoption of the New Articles by the
Company. A copy of the proposed New Articles showing all the
changes as against the current Articles of Association is available
for inspection at www.fidelity.co.uk/specialvalues, together with
a copy of the current Articles of Association and a ‘clean’ copy of
the New Articles (which do not highlight the amendments), from
the date of this report until the end of the AGM (and at the AGM
itself for the duration of the meeting and for at least 15 minutes
prior to the meeting). The documents are also available for
inspection at Simmons & Simmons LLP, Citypoint, 1 Ropemaker
Street, London, EC2Y 9SS until the close of the AGM.
Directors’ fees
The Board considers it is appropriate to increase the limit on
Directors’ fees (“Fee Cap”), which was set at the Company’s
Annual General Meeting in 2021 at £250,000 in aggregate per
annum. The proposed new Fee Cap is £350,000 in aggregate
per annum. The Board considers that the increase will provide
sufficient head-room to enable the Board to execute any
succession plans for the future. The Board is satisfied that this
new Fee Cap is in keeping with current market practice.
Period to draw up and submit proposals following a
continuation vote
The Board also considers it appropriate to extend the time
period within which proposals for the Company’s voluntary
liquidation, unitisation or other reorganisation must be drawn
up and a general meeting held at which they are submitted
to members following an unsuccessful continuation vote
(“Shareholder Deadline”). The Shareholder Deadline is currently
set at three months after the date of the general meeting
at which the continuation vote was unsuccessful. The Board
proposes that the Shareholder Deadline be extended to six
months from this date. The Board considers that this extension
is in line with market practice and will allow the Board a more
appropriate period of time to consider, prepare and submit its
proposals to shareholders following the continuation vote.
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Directors’ Report continued
Clarificatory, administrative and technical changes
Various changes of a minor, clarificatory or technical nature
are not commented on separately. This includes in relation to
arrangements for validity of proxies, to provide for if there are too
few Directors following retirements at annual general meetings
and clarifications in relation to hybrid general meetings to follow
how practice has developed. The Board does not however
have any plans at this stage to allow general meetings to be
held purely by electronic means, and so no provision has been
included in the New Articles to provide for fully virtual meetings.
Recommendation: The Board considers that each of
the resolutions is likely to promote the success of the
Company and is in the best interests of the Company and
its shareholders as a whole. The Directors unanimously
recommend that shareholders vote in favour of the
resolutions as they intend to do in respect of their own
beneficial holdings.
By Order of the Board
FIL Investments International
Secretary
5 November 2025
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Corporate Governance Statement
“Corporate governance” is the process by which the Board
of Directors of a company look after shareholders’ interests
and by which it endeavours to enhance those interests (often
referred to as “shareholder value”). Shareholders hold the
Directors responsible for the stewardship of a company’s affairs,
delegating authority to the Directors to manage the Company on
their behalf and holding them accountable for its performance.
This report, which forms part of the Directors’ Report, explains
how the Directors of Fidelity Special Values PLC (the “Company”)
deal with that responsibility, authority and accountability.
Corporate Governance Codes
The Board follows the principles and provisions of the UK
Corporate Governance Code (the “UK Code”) issued by the
Financial Reporting Council (the “FRC”) in July 2018 and the AIC’s
Code of Corporate Governance (the “AIC Code”) issued by the
Association of Investment Companies (the “AIC”) in February
2019. The AIC Code addresses the principles and provisions of
the UK Code. The FRC has confirmed that investment companies
which report against the AIC Code will meet their obligations
under the UK Code and paragraph 6.6.6(6) of the UK Listing
Rules. This statement, together with the Statement of Directors’
Responsibilities on page 46, set out how the principles have
been applied.
The AIC Code can be found on the AIC’s website at www.theaic.
co.uk and the UK Code on the FRC’s website at www.frc.org.uk.
Statement of Compliance
The Company has complied with the recommendations of the
AIC Code and the relevant provisions of the UK Code for the
year under review and up to the date of this report, except in
relation to the UK Code provisions relating to the role of the chief
executive, executive directors’ remuneration, and the need for an
internal audit function. The Board considers that these provisions
are not relevant to the position of the Company, as it is an
externally managed investment company and has no executive
directors, employees or internal operations. All of its day to day
management and administrative functions are delegated to the
Manager.
The Corporate Governance of an Investment Trust Company
The corporate governance of most investment companies is
different from most other commercial companies in one important
respect: they do not employ their own people as management
but instead the services of a fund management company. This
affects the way investment companies are governed but not the
purpose of their governance. Given that the Manager’s business
is not dedicated solely to the interests of investment companies
and their shareholders, investment company boards must be
largely independent of management. However, the Board must
have knowledge and experience of both fund management
and investment company management. The Company was
established and is managed and promoted by its Manager,
which is, therefore, one of the main reasons some shareholders
choose to invest in the Company’s shares. It follows that it is an
important aspect of the corporate governance of the Company
that its Manager should be party to the responsibility, authority
and accountability to those investing in their management.
The Corporate Governance Policies and Modus Operandi of
Fidelity Special Values PLC
The corporate governance of any investment company, while
following the guidelines of the UK Code and AIC Code, will vary
in certain respects depending on its own circumstances. The
Board of the Company has considered its own circumstances and
determined its own corporate governance policies and modus
operandi.
In this section we have outlined the corporate governance
policies and modus operandi through the following three
aspects of corporate governance: Responsibility, Authority and
Accountability. It is, first of all, important that shareholders have
confidence in the Board of Directors, whom they hold responsible
and accountable for the Company’s affairs.
In determining the guidelines for the composition of the Board,
the Directors believe that Board members, including the
Chairman, are independent of management, and that within
the Board there is understanding and experience of investment
management, investment company management, the investment
objective of the Company, marketing, general business
experience and finally of Fidelity’s investment philosophy and its
operations.
All Directors are independent and considered to be free from
any business or other relationship which could materially interfere
with the exercise of their independent judgement. Details of the
Directors’ current business associations are set out on page 33.
In addition, all Directors are able to allocate sufficient time to the
Company to discharge their responsibilities fully and effectively.
The Board follows a procedure of notification of any interests that
may arise as part of considering any potential conflicts.
All of the Directors are Non-Executive. Each Director’s individual
independence, including that of the Chairman, has been
assessed and confirmed, taking into consideration:
•
Integrity, commitment, intelligent challenge;
• Independence of mind and character;
• Experience and knowledge of investment trusts, of the
investment business generally and of Fidelity;
• Financial literacy;
• Conflicts of interest; and
• Performance as a Director.
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Regular
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination
Committee
Meetings
Claire Boyle 5/5 3/3 1/1 1/1
Dean Buckley
1
5/5 n/a 1/1 1/1
Christopher Casey
2
3/3 2/2 n/a 1/1
Ominder Dhillon 5/5 3/3 1/1 1/1
Nigel Foster
3
2/2 1/1 1/1 n/a
Alison McGregor 5/5 3/3 1/1 1/1
1 As Chairman of the Board, Mr Buckley is not a member of the Audit Committee but is invited to attend the meetings.
2 Appointed on 1 January 2025.
3 Resigned on 12 December 2024.
Figures in the table above indicate those meetings for which each Director was eligible to attend and attended in the year. Regular
Board meetings exclude ad hoc meetings for other Board business.
The Board considers the tenure of each Director annually as
well as each Director’s time commitment to ensure they have
the capacity required to fulfill their role as a Director. A Director
may serve for more than nine years, provided that such Director
is considered by the Board to continue to be independent and
provides experience that remains relevant. In addition, each
Director is subject to annual re-election, or election if newly
appointed, by shareholders.
The Board meets regularly to discharge its duties effectively and
the table above gives the attendance record for the meetings
held during the reporting year.
Responsibility
Under Section 172(1) of the Companies Act, the Directors have
a duty to promote the success of the Company for the benefit of
our shareholders. This includes having regard (amongst other
matters) to the likely consequences of any decision in the long-
term, fostering relationships with the Company’s stakeholders and
the desirability of the Company in maintaining a reputation for
high standards of business conduct. Further detail on promoting
the success of the Company is in the Strategic Report on pages
30 and 31.
Authority
The Board is furnished by shareholders with the authority to
manage the Company on their behalf, in order to discharge the
responsibilities outlined above. The Board, being independent
of the Manager, carries out its duties through Board meetings
and Board appointed Committee meetings. The most important
aspect of Directors’ duties concerns the management of the
Company’s portfolio of assets and of the risk profile of its
balance sheet. While the day-to-day investment management is
delegated to the Manager, there are certain decisions retained
and made by the Directors, including the payment of dividends,
the share issue and share repurchase guidelines and the
derivatives and gearing policies.
In structuring Board meetings, the Directors try to concentrate
as much as possible of their regular Board meetings on (i)
investment matters (including strategy, investment policy, gearing
and derivatives policies, portfolio and stock reviews, portfolio
turnover, monitoring performance etc.); and (ii) shareholder
value matters (including monitoring the premium or discount,
share issues and share repurchases and the marketing of the
Company). The Chairman is responsible for the promotion of a
culture of openness and debate, for ensuring that the Directors
receive accurate, timely and clear information and for ensuring
that there is adequate time available for the discussion of
agenda items, particularly strategic issues.
The Board meets regularly with the Company’s Broker to discuss
shareholder value and investor relation matters. The Portfolio
Manager and Manager meet with the larger shareholders on a
regular basis and report back to the Board on those meetings.
The Chairman, when required, also attends some of these
meetings. Key representatives of the Manager attend each Board
meeting, enabling the Board to discuss business matters further.
BOARD COMMITTEES
The Board has three Committees, as set out below and on the
next page, through which it discharges certain of its corporate
governance responsibilities. These are the Audit Committee,
the Management Engagement Committee and the Nomination
Committee. Terms of reference of each Committee are
available on the Company’s pages of the Manager’s website at
www.fidelity.co.uk/specialvalues.
Audit Committee
The Audit Committee consists of Claire Boyle as Chair,
Christopher Casey, Ominder Dhillon and Alison McGregor. Full
details of the Audit Committee are disclosed in the Report of the
Audit Committee on pages 47 to 49.
Management Engagement Committee
Composition
The Management Engagement Committee is chaired by Dean
Buckley and consists of all the Directors.
Corporate Governance Statement continued
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Role and Responsibilities
It is charged with reviewing and monitoring the performance of
the Manager and for ensuring that the terms of the Company’s
Management Agreement remains competitive and reasonable
for shareholders. It meets at least once a year and reports to the
Board, making recommendations where appropriate.
Manager’s Reappointment
Ahead of the AGM on 11 December 2025, the Committee has
reviewed the performance of the Manager and the current
fee basis and also that of its peers. The Committee noted the
Company’s NAV and share price performance over the reporting
year and also over five years and over the Portfolio Manager’s
tenure compared to the returns of the Benchmark. The Committee
also noted the commitment, quality and continuity of the team
responsible for the Company and concluded that it was in the
interests of shareholders that the appointment of the Manager
should continue. Details of the fee structure for the reporting year
ended 31 August 2025 can be found in the Directors’ Report on
page 34.
Nomination Committee
Composition
The Nomination Committee is chaired by Dean Buckley and
consists of all the Directors.
Role and Responsibilities
The Committee meets at least once a year and reviews the
composition, size and structure of the Board. The Committee
is responsible for succession planning and it is charged with
nominating new Directors for consideration by the Board, and in
turn for approval by shareholders.
In respect of new Directors, the Board believes that it is important
in the search for and recommendation of a candidate to the Board
that it is carried out by all of the Committee members who are all
independent Directors. The Committee carries out its candidate
search from the widest possible pool of talent based on the
benefits of having a diverse range of skills, knowledge, experience,
perspectives and background, including gender and diversity.
External consultants are used to identify potential candidates and
to assist the Board in recruiting new independent Non-Executive
Directors. Potential candidates are also vetted to ensure that they
have the required time commitment to fulfill their role as a Director.
In the reporting year, the services of Longwater Partners, which
has no connection with the Company or the Manager, was used to
recruit Christopher Casey as a Board member.
Upon appointment, each Director is provided with all relevant
information regarding the Company and receives an induction
on the investment operation and administration functions of
the Company, together with a summary of their duties and
responsibilities. Directors are encouraged to keep up to date
and attend training courses on matters which are directly
relevant to their involvement with the Company. They also receive
regular briefings from, amongst others, the AIC, the Company’s
Auditor and the Company Secretary, regarding any proposed
developments or changes in law or regulations that could affect
the Company and/or the Directors.
The Committee also considers the election and re-election
of Directors ahead of each AGM. For the forthcoming AGM,
it has considered the performance and contribution of each
Director and concluded that each Director seeking election and
re-election has been effective and continues to demonstrate
commitment to their role. This has been endorsed by the
Board which recommends their appointment reappointment by
shareholders at the forthcoming AGM. The terms and conditions
of appointment of Directors are available for inspection at the
registered office of the Company.
As part of the election and re-election process, and other than
every third year when an external evaluation is undertaken,
a Board evaluation process is undertaken ahead of the AGM
which takes the form of written questionnaires and one to
one discussions. The Chairman leads the assessment of the
individual Directors’ contributions to the Board and the Senior
Independent Director leads the assessment for the evaluation
and performance of the Chairman. Directors’ time commitment
and capacity to perform their role is taken into account as part
of the evaluation. The process is considered to be constructive
in terms of identifying areas for improving the functioning and
performance of the Board and its Committees and action is taken
on the basis of the results.
As a FTSE 350 Company and in accordance with provision 21
of the 2018 UK Corporate Governance Code, the Board carried
out an externally facilitated evaluation in 2023. The next external
evaluation will take place in 2026.
Accountability
Given that the shareholders entrust the Board of Directors with
the management of the Company’s affairs, it is necessary that
the Board accounts for itself to shareholders. The process of
accountability involves providing all the necessary information for
shareholders to make judgements about the Board’s stewardship
and performance through a full and informative annual financial
report, a half-yearly financial report, the presentation of the
Company’s results and future prospects at the AGM and
accessibility to the Board at any time via the Company Secretary.
The AGM is the occasion when the Board accounts for itself in a
public meeting. It regards any bona fide issue that any shareholder
raises as one that should be put to all shareholders at the AGM
so that all those attending can hear any concerns expressed in an
open forum and make their own judgement. The AGM provides
shareholders with an opportunity to vote on certain issues that are
not ultimately delegated to the Board. This includes the election
and re-election of Directors every year in addition to the normal
matters of approving the financial statements, the appointment
of the Company’s Auditor, the issue of new shares and the
repurchase of shares. Your Board has an established policy that
enables shareholders to decide whether they wish to continue
the Company’s existence by putting a “continuation vote” before
shareholders at every third AGM. The next continuation vote will
take place at this year’s AGM on 11 December 2025.
Directors’ Remuneration
The Board determines the level of Directors’ fees and full details
are disclosed in the Directors’ Remuneration report on pages 43
and 44.
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Senior Independent Director
Claire Boyle is the Senior Independent Director and fulfils the role
as a sounding board for the Chairman, intermediary for the other
Directors as necessary and acts as a channel of communication
for shareholders in the event that contact through the Chairman
is inappropriate. Christopher Casey will succeed Mrs Boyle when
she takes over as Chair of the Board from Dean Buckley on
11 December 2025.
Company Secretary
The Board has access to the advice and services of the Company
Secretary. The Company Secretary is responsible to the Board for
ensuring that Board procedures are followed and that applicable
rules and regulations are complied with. The Directors also have
the ability to take independent professional advice, if necessary,
at the Company’s expense.
Supply of Information
The Board meeting papers are the key source of regular
information for the Board, the contents of which are determined
by the Board and contain sufficient information on the financial
condition of the Company. The Board receives this information
in a timely manner and of a quality appropriate to enable it to
discharge its duties.
Risk Management and Internal Controls
The Board is responsible for the Company’s systems of risk
management and internal controls and for reviewing their
effectiveness. The review takes place at least once a year. Such
systems are designed to manage rather than eliminate risk
of failure to achieve business objectives and can only provide
reasonable, but not absolute, assurance against material
misstatement or loss.
The Board determines the nature and extent of any risks it is
willing to take in order to achieve its strategic objectives. It is
responsible for the design, implementation and maintenance of
controls and procedures to safeguard the assets of the Company
although these tasks have been delegated on a day-to-day basis
to the Manager. The system extends to financial, operational
and compliance controls and risk management. Clear lines of
accountability have been established between the Board and the
Manager. The Manager provides regular reports on controls and
compliance issues to the Audit Committee and the Board.
In carrying out its review, the Audit Committee has regard to the
activities of the Manager, the Manager’s compliance and risk
functions and the work carried out by the Company’s Auditor
relevant to the Company’s audit. It also includes consideration
of internal controls covered in similar reports issued by the other
service providers.
The Board, assisted by the Manager, has undertaken a rigorous
risk and controls assessment. The process also assists in
identifying any new emerging risks and the action necessary to
mitigate their potential impact. The Board confirms that there is
an effective ongoing process in place to identify, evaluate and
manage the Company’s principal business and operational risks,
and that it has been in place throughout the year ended 31
August 2025 and up to the date of this report. This process is in
accordance with the FRC’s “Risk Management, Internal Control
and Related Financial Business Reporting” guidance.
The Board has reviewed the need for an internal audit
function and has determined that the systems and procedures
employed by the Manager, which are subject to inspection by
the Manager’s internal and external audit processes, provide
sufficient assurance that a sound system of internal controls
is maintained to safeguard shareholders’ investments and
the Company’s assets. An internal audit function, specific to
the Company, is therefore considered unnecessary. The Audit
Committee meets the Manager’s internal audit representative
at least once a year. It receives a summary of the Manager’s
externally audited internal controls report on an annual basis.
Whistle-Blowing Procedure
Part of the Managers’ role in ensuring the provision of a good
service pursuant to the Management Agreement, includes
the ability for employees of Fidelity to raise concerns through
a workplace concerns escalation policy (or “whistle-blowing
procedure”). Fidelity has advised the Board that it is committed
to providing the highest level of service to its customers and
to applying the highest standards of quality, honesty, integrity
and probity. The aim of the policy is to encourage employees
and others working for Fidelity to assist the Company in tackling
fraud, corruption and other malpractice within the organisation
and in setting standards of ethical conduct. This policy has been
endorsed accordingly by the Board.
Bribery Act 2010
The Company is committed to carrying out business fairly,
honestly and openly. The Board recognises the benefits this has
to reputation and business confidence. The Board, the Manager,
the Manager’s employees and others acting on the Company’s
behalf, are expected to demonstrate high standards of behaviour
when conducting business.
The Board acknowledges its responsibility for the implementation
and oversight of the Company’s procedures for preventing
bribery, and the governance framework for training,
communication, monitoring, reporting and escalation of
compliance together with enforcing action as appropriate. The
Board has adopted a zero tolerance policy in this regard.
Criminal Finances Act 2017
The Company is subject to the Criminal Finances Act 2017 and
follows a zero tolerance policy to tax evasion and its facilitation.
The Directors are fully committed to complying with all legislation
and appropriate guidelines designed to prevent tax evasion
and the facilitation of tax evasion in the jurisdictions in which
the Company, its service providers, counterparties and business
partners operate.
On Behalf of the Board
Dean Buckley
Chairman
5 November 2025
Corporate Governance Statement continued
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Fidelity Special Values PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Directors’ Remuneration Report
Chairman’s Statement
The Directors’ Remuneration Report for the year ended 31
August 2025 has been prepared in accordance with the Large
& Medium-sized Companies & Groups (Accounts & Reports)
(Amendment) Regulations 2013 (the “Regulations”). As the Board
is comprised entirely of Non-Executive Directors and has no chief
executive officer and employees, many parts of the Regulations,
in particular those relating to chief executive officer pay and
employee pay, do not apply and are therefore not disclosed in
this report.
Ordinary resolutions to approve the Directors’ Remuneration
Report and the Remuneration Policy will be put to shareholders
at the AGM on 11 December 2025.
The Company’s Auditor is required to audit certain sections of
this report and where such disclosures have been audited, the
specific section has been indicated as such. The Auditor’s opinion
is included in its report on pages 50 to 56.
Directors’ Remuneration
The annual fee structure with effect from 1 September 2025 is as
follows:
Role
1 September
2025
1 September
2024
Chairman £52,000 £47,000
Chair of the Audit Committee £42,000 £37,500
Senior Independent Director £35,000 £33,000
Director £33,000 £31,000
Levels of remuneration are reviewed to ensure that they remain
competitive and sufficient to attract and retain the quality of
Directors needed to manage the Company successfully.
The Remuneration Policy stated in last year’s Annual Report is
proposed to be updated at this year’s AGM for the aggregate
fees payable to the Directors to a total of £350,000 per annum.
No other changes are proposed. The proposed Policy is below.
The Remuneration Policy
The Company’s Articles of Association limit the aggregate fees
payable to the Directors to a total of £350,000 per annum.
Subject to this overall limit, it is the Board’s policy to determine
the level of Directors’ fees having regard to the time spent by
them on the Company’s affairs; the level of fees payable to
non-executive directors in the industry generally; the requirement
to attract and retain individuals with suitable knowledge and
experience; and the role that individual Directors fulfil. Other than
fees and reasonable out-of-pocket expenses incurred in attending
to the affairs of the Company, the Directors are not eligible
for any performance related pay or benefits, pension related
benefits, share options, long-term incentive schemes, or other
taxable benefits. All Directors will be entitled to claim additional
remuneration in the event of significant additional work outside
of normal Company affairs. Directors are not entitled to exit
payments and are not provided with any compensation for loss
of office. Directors’ fees are paid monthly in arrears. Directors
do not serve a notice period if their appointment were to be
terminated.
The level of Directors’ fees is determined by the whole Board.
Directors do not vote on their own individual fees.
The Board reviews the Company’s Remuneration Policy and
implementation on an annual basis. Reviews are based on
information provided by the Company’s Manager, and research
from third parties and it includes information on the fees of other
similar investment trusts.
As a FTSE 350 company, and in accordance with provision 21 of
the 2018 UK Corporate Governance Code, the Board is required
to carry out an externally facilitated evaluation every third year
of its performance. This also includes input into the appropriate
level of Directors’ fees from an independent source.
No Director has a service contract with the Company. New
Directors are provided with a letter of appointment which,
amongst other things, provides that their appointment is subject
to the Companies Act 2006 and the Company’s Articles of
Association. Copies of the Directors’ letters of appointment are
available at each of the Company’s Annual General Meetings
and can be obtained from the Company’s registered office.
The Company’s remuneration policy will apply to new Board
members, who will be paid the equivalent amount of fees as
current Board members.
Voting on the Remuneration Policy
The Remuneration Policy (the “Policy”), as stated is last year’s
Annual report, was approved at the AGM held on 14 December
2022 with 99.19% of votes cast in favour, 0.22% of votes cast
against and 0.59% of votes withheld. The proposed Policy,
as set out above, will be put to shareholders at the AGM on
11 December 2025, and the votes cast will be disclosed on the
Company’s website at: www.fidelity.co.uk/specialvalues.
Voting on the Directors’ Remuneration Report
The Directors’ Remuneration Report for the year ended 31 August
2024 was approved at the AGM held on 12 December 2024 with
99.45% of votes cast in favour, 0.26% of votes cast against and
0.29% of votes withheld.
The Directors’ Remuneration Report for the year ended 31 August
2025 will be put to shareholders at the AGM on 11 December
2025, and the votes cast will be disclosed on the Company’s
pages of the Manager’s website at: www.fidelity.co.uk/
specialvalues.
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Annual Report 2025
Single Total Figure of Directors’ Remuneration
The single total aggregate Directors’ remuneration for the year ended 31 August 2025 was £192,631 (2024: £181,456). This includes
expenses incurred by Directors in attending to the affairs of the Company and are considered by HMRC to be a taxable expense.
Information on individual Directors’ fees and taxable Directors’ expenses are disclosed in the table below.
Remuneration of Directors
2026 2025 2025 2025 2024 2024 2024
Projected
Fees
Fees
(Audited)
Taxable
Expenses
(Audited)
Total
(Audited)
Fees
(Audited)
Taxable
Expenses
(Audited)
Total
(Audited)
(£) (£) (£) (£) (£) (£) (£)
Claire Boyle
1
49,907 38,941 2,189 41,130 35,000 3,039 38,039
Dean Buckley
2
14,531 47,000 434 47,434 44,500 663 45,163
Christopher Casey
3
40,488 20,667 – 20,667 n/a n/a n/a
Ominder Dhillon 33,000 31,000 3,558 34,558 29,500 1,983 31,483
Nigel Foster
4
n/a 9,265 – 9,265 31,500 – 31,500
Alison McGregor 33,000 31,000 8,577 39,577 29,500 5,771 35,271
Total 170,926 177,873 14,758 192,631 170,000 11,456 181,456
1 Appointed as Senior Independent Director on 12 December 2024 in addition to continuing as Audit Committee Chair. To be appointed as Chair of the Board on
11 December 2025.
2 Retiring on 11 December 2025.
3 Appointed on 1 January 2025. To be appointed Chairman of the Audit Committee and Senior Independent Director on 11 December 2025.
4 Retired on 12 December 2024.
Five year change comparison in Directors’ Remuneration
The table below sets out the change in Directors’ fees over the last five years.
31 August 2025 31 August 2020 Change (%)
Chairman 47,000 41,000 +14.6%
Chair of the Audit Committee 37,500 31,750 +18.1%
Senior Independent Director 33,000 27,000 +22.2%
Director 31,000 27,000 +14.8%
Expenditure on Directors’ Remuneration and Distributions to Shareholders
The table below shows the total amount paid out in Directors’ remuneration and distributions to shareholders. The projected Directors’
remuneration for the year ending 31 August 2026 is disclosed in the first table above.
31 August
2025
£
31 August
2024
£
Expenditure on Directors’ Remuneration:
Fees and taxable expenses 192,631 181,456
Distribution to Shareholders:
Dividend payments 31,272,000 30,822,000
Directors’ Remuneration Report continued
45
Annual Report 2025
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Fidelity Special Values PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Performance
The Company aims to achieve long-term capital growth primarily through investment in equities (and their related financial
instruments) of UK companies which the Investment Manager believes to be undervalued or where the potential has not been
recognised by the market. The graph below shows the performance of the NAV per ordinary share and share price against the FTSE
All-Share Index (Benchmark) over ten years to 31 August 2025.
Total return performance for the ten years to 31 August 2025
+146.8%
+108.5%
80.0
100.0
120.0
140.0
160.0
180.0
200.0
220.0
240.0
260.0
+147.3%
NAV
Share Price
FTSE All-Share Index
2024 20252015 2016 2017 2018 2019 2020 2021 2022 2023
Directors’ Interests in Ordinary Shares
Although there is no requirement for the Directors to hold shares in the Company, shareholdings by Directors are encouraged. The
interests of the Directors’ in the ordinary shares of the Company are shown in the table below. All of the shareholdings are beneficial.
The Portfolio Manager also holds shares in the Company.
Directors’ Shareholdings (Audited)
31 August
2025
31 August
2024
Change
during year
Claire Boyle 7,466 7,466 –
Dean Buckley 50,000 50,000 –
Christopher Casey
1
7,000 n/a 7,000
Ominder Dhillon 7,750 7,750 –
Nigel Foster
2
n/a 88,000 –
Alison McGregor 20,000 20,000 –
1 Purchase of shares.
2 Retired on 12 December 2024.
All Directors’ shareholdings remained unchanged at the date of this report.
On Behalf of the Board
Dean Buckley
Chairman
5 November 2025
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Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial period. Under that law, the
Directors have elected to prepare the Financial Statements in
accordance with UK Generally Accepted Accounting Practice (UK
Accounting Standards and applicable law), including Financial
Reporting Standard FRS 102: The Financial Reporting Standard
applicable in the UK and Republic of Ireland (“FRS 102”). Under
company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss for the reporting period.
In preparing these Financial Statements the Directors are
required to:
• Select suitable accounting policies in accordance with
Section 10 of FRS 102 and then apply them consistently;
• Make judgements and estimates that are reasonable and
prudent;
• Present information, including accounting policies, in a
fair and balanced manner that provides relevant, reliable,
comparable and understandable information;
• State whether applicable UK Accounting Standards, including
FRS 102, have been followed, subject to any material
departures disclosed and explained in the Financial
Statements; and
• Prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and to enable them to
ensure that the Company and the Financial Statements comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, a Directors’
Report, a Corporate Governance Statement and a Directors’
Remuneration Report which comply with that law and those
regulations.
The Directors have delegated the responsibility for the
maintenance and integrity of the corporate and financial
information included on the Company’s pages of the Manager’s
website at www.fidelity.co.uk/specialvalues to the Manager.
Visitors to the website need to be aware that legislation in the
UK governing the preparation and dissemination of the Financial
Statements may differ from legislation in their jurisdictions.
The Directors confirm that to the best of their knowledge:
•
The Financial Statements, prepared in accordance with UK
Generally Accepted Accounting Practice, including FRS 102,
give a true and fair view of the assets, liabilities, financial
position and profit of the Company;
• The Annual Report, including the Strategic Report, includes
a fair review of the development and performance of the
business and the position of the Company, together with a
description of the principal risks and uncertainties it faces;
and
• The Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
Company’s performance, business model and strategy.
The Statement of Directors’ Responsibility was approved by the
Board on 5 November 2025 and signed on its behalf by:
Dean Buckley
Chairman
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Fidelity Special Values PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Report of the Audit Committee
I am pleased to present the formal report of the Audit Committee
(the “Committee”) to shareholders.
The primary responsibilities of the Committee are to ensure
the integrity of the Company’s financial reporting, the
appropriateness of the risk management and internal controls
processes (see page 42 for further details) and the effectiveness
of the independent audit process for the year ended 31 August
2025. This report details how we carry out this role.
Composition and Meetings
The members of the Committee are myself as Chair, Christopher
Casey, Ominder Dhillon and Alison McGregor. In line with the
recommendation of the UK Corporate Governance Code, Dean
Buckley as Chairman of the Board, is not a member of the
Committee but is invited to attend the Committee meetings. All
Committee members are independent Non-Executive Directors,
and their skills and experience are set out on page 33. The
Committee considers that collectively the members have sufficient
recent and relevant sector and financial experience to fully
discharge their responsibilities.
The Committee met three times during this reporting year. The
Committee invites the Company’s Auditor and personnel from the
Manager’s financial, risk and internal audit functions to attend
and report to the Committee on relevant matters. During the year,
I also met privately with the Auditor to raise any issues without
management present. After each Committee meeting, I report to
the Board on the main items discussed at the meeting.
During the year, an audit tender was carried out as the current
Auditor will have been in place for 10 years in November 2025.
Further details of the process and outcome are on page 49.
Ahead of each AGM, the Committee’s performance is evaluated
as part of the overall Board evaluation process as reported on
page 41.
Role and Responsibilities of the Audit Committee
The Committee’s authority and duties are defined in its terms
of reference, which were reviewed during the year and are
available on the Company’s pages of the Manager’s website at
www.fidelity.co.uk/specialvalues. The principal activities carried
out during the year were:
•
Financial Reporting: We considered the Company’s
financial reports, including the significant accounting issues
and the appropriateness of the accounting policies adopted.
We considered and are satisfied that, taken as a whole, the
2025 Annual Report is fair, balanced and understandable
and provides the information necessary for shareholders to
assess the Company’s performance, business model and
strategy. We considered the ongoing impact of the war in
Ukraine and market events and reviewed the assessment of
the Company as a going concern and also its viability over
a five year time frame. We reviewed the revenue that has
been recognised and the liquidity of the portfolio;
• Internal Audit: We considered the scope of the internal
audit of the Manager and the subsequent findings from
this work, receiving regular reports from the internal audit
function of the Manager. The Committee also monitored
progress in the implementation of the Manager’s internal
audit recommendations;
• Risk and Internal Control: During one of the Committee
meetings, we considered the key existing and emerging risks
facing the Company and the adequacy and effectiveness of
the internal controls and risk management processes. This
included a review of the Manager’s business continuity plans
and operational resilience strategies in order to continue
to meet regulatory obligations and also continuing to serve
and support investors and the Board. The Company’s third
party service providers also continue to implement similar
measures to ensure that there is no disruption in service. The
Committee received sufficient assurance that the Manager’s
and third party service providers measures have continued
to work effectively in the reporting year; and
• External Auditor: we considered the independence,
effectiveness and fees of the Auditor, as detailed later in this
report.
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Annual Report 2025
Significant issues considered by the Audit Committee during the year
The Annual Report and Financial Statements are the responsibility of the Board and the Statement of Directors’ Responsibilities can be
found on page 46. The Audit Committee advises the Board on the form and content of the Annual Report and Financial Statements,
any issues which may arise in relation to these and any specific areas which require judgement.
Summarised below are the most significant issues which were considered by the Committee in respect of these Financial Statements
and how these issues were addressed.
Recognition of
Investment Income
Investment income is recognised in accordance with Accounting Policy Note 2 (e) on pages61
and 62. The Manager provided detailed revenue forecasts and the Committee reviewed
and sought explanations for any significant variances to these forecasts. The Committee also
considered the allocation of special dividends between revenue and capital and the reasons
for the classification of these special dividends. The Committee reviewed the internal audit and
compliance monitoring reports received from the Manager, including an additional agreed upon
procedures report in connection with investment trusts specific controls operated by FIL Investment
Services (UK) Limited (the Manager), prepared by PricewaterhouseCoopers LLP, to satisfy itself
that adequate systems were in place for properly recording the Company’s investment income.
The Committee also reviewed the reports provided by the Auditor on its work on the recognition
of investment income, including the allocation of special dividends.
Valuation, existence
and ownership
of investments
(including derivatives
and unlisted
investments)
The valuation of investments (including derivatives) is in accordance with Accounting Policy
Notes 2 (k) and 2 (l) on pages 62 and 63. The Committee took comfort from the Depositary’s
regular oversight function that investment related activities were conducted in accordance
with the Company’s investment policy. The Committee received reports from the Manager, the
Depositary and an additional agreed upon procedures report in connection with investment
trusts specific controls operated by FIL Investment Services (UK) Limited (the Manager),
prepared by PricewaterhouseCoopers LLP, which concluded that the controls around the
valuation, existence and ownership of investments operate effectively. The valuation of unlisted
investments is appraised by the Manager’s Fair Value Committee (“FVC”) in accordance
with UK GAAP and International Private Equity and Venture Capital Valuation Guidelines.
The Committee reviewed the information received from the FVC on the proposed valuation
methodologies for all unlisted investments. The Committee also reviewed the reports provided
by the Auditor on its work on the valuation, existence and ownership of the Company’s
investments, including derivatives and unlisted investments.
The Company confirms that it has complied with the September
2014 Competition and Markets Authority Order in relation to the
performance and appointment of the Auditor, as set out below
and on the next page.
Independence and Effectiveness of the Audit Process
Ernst & Young LLP acted as the Company’s Auditor for the year
ended 31 August 2025.
With regard to the independence of the Auditor, the Committee
reviewed:
•
The Auditor’s arrangements for any conflicts of interest;
• The fact that no non-audit services were provided to the
Company during the reporting year and up to the date of
this report; and
• The statement by the Auditor that it remained independent
within the meaning of the regulations and their professional
standards.
With regard to the effectiveness of the audit process, the
Committee reviewed:
• The fulfilment by the Auditor of the agreed audit plan,
including the audit team and approach to significant risks;
• The audit findings report issued by the Auditor on the audit
of the Annual Report and Financial Statements for the year
ended 31 August 2025; and
• Feedback from the Manager on the audit of the Company.
The Committee concluded that the Auditor remains independent
and the audit process was effective.
Report of the Audit Committee continued
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Fidelity Special Values PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Auditor’s Appointment and Audit Tenure
Ernst & Young LLP was appointed as the Company’s Auditor on
30 November 2015 and will have been in place for 10 years
in November 2025. Accordingly, the Company conducted an
audit tender process during the year. From the shortlisted firms
who presented to a subcommittee of the Audit Committee, a
range of criteria was covered, including industry experience and
credentials; team experience and continuity; audit approach;
quality assurance; transition planning and fees and value for
money. As a result of this, PricewaterhouseCoopers LLP (“PwC”)
has been proposed by the Board as the auditor to the Company
from and including the financial year ending 31 August 2026.
A resolution to appoint PwC as auditor to the Company will
accordingly be proposed at the AGM on 11 December 2025.
The Committee will continue to review the Auditor’s appointment
each year to ensure that the Company continues to receive an
optimal level of service. There are no contractual obligations
which restrict the Company’s choice of auditor.
Audit Fees
Fees paid to the Auditor for the audit of the Company’s Financial
Statements are disclosed in Note 5 on page 65. The audit fee
for the reporting year was £58,856 (2024: £52,987). Included in
the current year’s audit fee is an amount of £3,750 in respect of
additional scope of work relating to the transition of Fidelity’s
reporting functions to JP Morgan and this has been paid by
Fidelity.
Claire Boyle
Chair of the Audit Committee
5 November 2025
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Annual Report 2025
Independent Auditor’s Report to the Members
of Fidelity Special Values PLC
Opinion
We have audited the Financial Statements of Fidelity Special
Values PLC (the ‘Company’) for the year ended 31 August
2025 which comprise the Income Statement, the Statement of
Changes in Equity, the Balance Sheet and the related Notes 1
to 20, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom Accounting
Standards including FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland” (‘United Kingdom
Generally Accepted Accounting Practice’).
In our opinion, the Financial Statements:
• give a true and fair view of the Company’s affairs as at 31
August 2025 and of its profit for the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (‘ISAs (UK’) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the Financial Statements
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the Financial
Statements in the UK, including the FRC’s Ethical Standard as
applied to public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Company and we remain independent
of Company in conducting the audit.
Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the Financial Statements is appropriate. Our
evaluation of the Directors’ assessment of the Company’s ability to
continue to adopt the going concern basis of accounting included:
• Confirming our understanding of the Company’s going
concern assessment process by engaging with the Directors
and the Company Secretary to determine if all key factors
were considered in their assessment;
• Inspecting the Directors’ assessment of going concern,
including the revenue and expense forecast, for the period to
30 November 2026 which is at least 12 months from the date
of approval of these Financial Statements. In preparing the
revenue and expense forecast, the Company has concluded
that it is able to continue to meet its ongoing costs as they fall
due;
• Reviewing the factors and assumptions, including the impact
of the current economic environment and other significant
events that could give rise to market volatility, as applied
to the revenue and expense forecast and the liquidity
assessment of the investments and determined, through
testing of the methodology and calculations, that the methods,
inputs and assumptions utilised are appropriate to be able to
make an assessment for the Company;
• Consideration of the mitigating factors included in the revenue
and expense forecast that are within the control of the
Company. We reviewed the Company’s assessment of the
liquidity of investments held and evaluated the Company’s
ability to sell those investments in order to cover working
capital requirements should revenue decline significantly;
• Assessing the impact of the continuation vote at the 2025
Annual General Meeting on the going concern basis
of preparation by considering the current and historical
performance of the Company, obtaining the Broker’s
representation on certain shareholders about their current
intentions in relation to the continuation vote and assessing
the Directors’ own analysis of the impact the continuation vote
may have on going concern; and
• Reviewing the Company’s going concern disclosures included
in the Annual Report in order to assess that the disclosures
were appropriate and in conformity with the reporting
standards.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company’s ability to continue as a going concern for a period to
30 November 2026 which is at least twelve months from the date
of approval of these Financial Statements.
In relation to the Company’s reporting on how they have applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in
the Financial Statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report. However, because not all future events or conditions
can be predicted, this statement is not a guarantee as to the
Company’s ability to continue as a going concern.
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Fidelity Special Values PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Overview of our audit approach
Key audit matters
• Risk of incomplete or inaccurate revenue recognition, including the classification of special
dividends as revenue or capital items in the Income Statement.
• Risk of incorrect valuation or ownership of the investment portfolio, including derivatives.
Materiality
• Overall materiality of £12.67m which represents 1% of Net Asset Value of the Company as of
31 August 2025.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for
the Company. This enables us to form an opinion on the Financial Statements. We take into account size, risk profile, the organisation
of the Company and effectiveness of controls, the potential impact of climate change and changes in the business environment when
assessing the level of work to be performed. All audit work was performed directly by the audit engagement team.
Climate change
Stakeholders are increasingly interested in how climate change will impact the companies. The Company has determined that the
impact of climate change could affect the Company’s investments and their valuations and potentially shareholder returns. This is
explained on page 25 in the emerging risks section, which form part of the “Other information,” rather than the audited Financial
Statements. Our procedures on the disclosures therefore consisted solely of considering whether they are materially inconsistent with
the Financial Statements, or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line
with our responsibilities on “Other information”.
Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the Financial Statements
as set out in Note 2(a) and conclusion that there was no further impact of climate change to be taken into account as the investments
are valued based on market pricing. In line with FRS 102, investments are valued at fair value, which for the Company are quoted
bid prices for investments in active markets at the balance sheet date. Investments which are unlisted are priced using market-based
valuation approaches. All investments therefore reflect the market participants view of climate change risk on the investments held by
the Company.
Based on our work we have not identified the impact of climate change on the Financial Statements to be a key audit matter or to
impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial
Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
Financial Statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
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Risk Our response to the risk Key observations
communicated to
the Audit Committee
Risk of incomplete or inaccurate
revenue recognition, including the
classification of special dividends
as revenue or capital items in the
Income Statement
Refer to the Report of the Audit Committee
(page 48); Accounting Policies (pages 61 and
62); and Note 3 of the Financial Statements
(page 64)
The Company has reported revenue of £54.02m
(2024: £51.16m).
During the year, the Company received special
dividends amounting to £3.61m (2024: £7.12m),
of which £0.66m (2024: £1.91m) was classified
as revenue and £2.95m (2024: £5.21m) was
classified as capital.
There is a risk of incomplete or inaccurate
recognition of revenue through the failure to
recognise proper income entitlements or to
apply an appropriate accounting treatment.
In addition to the above, the Directors may be
required to exercise judgement in determining
whether income received in the form of special
dividends should be classified as ‘revenue’ or
‘capital’ in the Income Statement.
We performed the following procedures:
We obtained an understanding of the processes
and controls surrounding the revenue recognition
and classification of special dividends by
performing our walkthrough procedures to
evaluate the design and implementation of
controls;
For all dividends received and accrued, we
recalculated the income by multiplying the
investment holdings at the ex-dividend date,
traced from the accounting records, by the
dividend rate as agreed to an independent
data vendor. We also agreed all exchange
rates to an external source and, for a sample of
dividends received and dividends accrued, we
agreed amounts to bank statements;
For all dividends accrued, we assessed whether
the dividend obligations arose prior to 31 August
2025 with reference to an external source;
To test completeness of recorded income, we
tested that all expected dividends for each of
the investee companies had been recorded as
income with reference to an external source; and
For all investments held during the year, we
reviewed the type of dividends paid with
reference to an external data source to identify
those which were special dividends. We tested
three special dividends and have assessed the
appropriateness of the Company’s classification
as either revenue or capital by reviewing the
rationale for the underlying distribution.
The results of
our procedures
identified no material
misstatement in
relation to the risk
of incomplete or
inaccurate revenue
recognition, including
the classification of
special dividends as
revenue or capital
items in the Income
Statement.
Independent Auditor’s Report to the Members
of Fidelity Special Values PLC
continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Risk Our response to the risk Key observations
communicated to
the Audit Committee
Risk of incorrect valuation or
ownership of the investment
portfolio, including derivatives
Refer to the Report of the Audit Committee
(page 48); Accounting Policies (pages 62 and
63); and Notes 10 and 11 of the Financial
Statements (pages 68 and 69).
At 31 August 2025, the Company held
investments with a value of £1,164.42m
(2024: £1,120.69m). The Company also has
net derivative liabilities amounting to £2.32m
(2024: net derivative assets of £4.12m).
The valuation of the assets held in the
investment portfolio, including derivatives, is
the key driver of the Company’s net asset value
and total return. Incorrect investment pricing,
or a failure to maintain proper legal title to the
investments held by the Company could have a
significant impact on the portfolio valuation and
the return generated for shareholders.
The fair value of the listed investments and
derivatives is determined using quoted market
prices at close of business on the reporting date.
Investments which are unlisted are priced using
market-based valuation approaches.
We performed the following procedures:
We obtained an understanding of the processes
and controls surrounding investment pricing
and legal title by performing our walkthrough
procedures;
For all listed investments in the portfolio, we
compared the market prices and exchange rates
applied to an independent pricing vendor. For
all derivatives, we compared the market prices
of the underlying instrument to an independent
pricing vendor and agreed cost price to the
Brokers’ confirmations. We recalculated the
investment and derivative valuations as at the
year end;
We inspected the stale pricing report to identify
prices that had not changed and verified
whether the quoted price is a valid fair value;
and
We compared the Company’s investment
holdings as at 31 August 2025 to the
independent confirmation received directly from
the Company’s Custodian and Depositary. We
agreed all open year-end derivative positions to
confirmations received independently from the
Company’s Brokers.
The results of
our procedures
identified no material
misstatement in
relation to the risk of
incorrect valuation of
the or the ownership
of the investment
portfolio, including
derivatives.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the Financial Statements.
Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Company to be £12.67m
(2024: £11.44m), which is 1% (2024: 1%) of the Company’s
Net Assets. We believe that the Net Assets provides us with
materiality aligned to the key measure of the Company’s
performance.
Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Company’s overall control environment, our
judgement was that performance materiality was 75% (2024:
75%%) of our planning materiality, namely £9.50m (2024: £8.58m).
We have set performance materiality at this percentage due to
our past experience of the audit that indicates a lower risk of
misstatements, both corrected and uncorrected.
Given the importance of the distinction between revenue and
capital for investment trusts, we have also applied a separate
testing threshold for the revenue column of the Income Statement
of £2.00m (2024: £1.92m) being 5% (2024: 5%) of revenue profit
before tax.
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Reporting threshold
An amount below which identified misstatements are considered
as being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of £0.64m (2024:
£0.57m), which is set at 5% of planning materiality, as well as
differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in
the Annual Report other than the Financial Statements and our
Auditor’s report thereon. The Directors are responsible for the
other information contained within the Annual Report.
Our opinion on the Financial Statements does not cover the other
information and, except to the extent otherwise explicitly stated in
this report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the Financial Statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the Directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
•
the information given in the Strategic Report and the
Directors’ Report for the financial year for which the Financial
Statements are prepared is consistent with the Financial
Statements; and
• the Strategic Report and Directors’ Reports have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or
Directors’ Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept, or
returns adequate for our audit have not been received from
branches not visited by us; or
• the Financial Statements and the part of the Directors’
Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance
with the provisions of the UK Corporate Governance Code
specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the Financial
Statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 34;
• Directors’ explanation as to its assessment of the Company’s
prospects, the period this assessment covers and why the
period is appropriate set out on pages 29 and 30;
• Director’s statement on whether it has a reasonable
expectation that the Company will be able to continue in
operation and meets its liabilities set out on page 34;
• Directors’ statement on fair, balanced and understandable
set out on page 46;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 25;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on page 42; and
• The section describing the work of the Audit Committee set
out on page 47.
Independent Auditor’s Report to the Members
of Fidelity Special Values PLC
continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement
set out on page 46, the Directors are responsible for the
preparation of the Financial Statements and for being satisfied
that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation
of Financial Statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Financial Statements, the Directors are
responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an Auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these Financial Statements.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through
collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with governance
of the Company and management.
•
We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and
determined that the most significant are United Kingdom
Generally Accepted Accounting Practice, the Companies
Act 2006, the Association of Investment Companies Code
of Corporate Governance, the Association of Investment
Companies Statement of Recommended Practice, the
Listing Rules, the UK Corporate Governance Code, Section
1158 of the Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
• We understood how the Company is complying with those
frameworks through discussions with the Audit Committee
and Company Secretary and review of Board minutes and
the Company’s documented policies and procedures.
• We assessed the susceptibility of the Company’s Financial
Statements to material misstatement, including how fraud
might occur by considering the key risks impacting the
Financial Statements. We identified a fraud risk with respect
to the incomplete or inaccurate revenue recognition through
incorrect classification of special dividends as revenue or
capital items in the Income Statement. Further discussion of
our approach is set out in the section on key audit matters
above.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations. Our procedures involved review of the
reporting to the Directors with respect to the application of
the documented policies and procedures and review of the
Financial Statements to ensure compliance with the reporting
requirements of the Company.
A further description of our responsibilities for the audit of the
Financial Statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of
our Auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee, we
were appointed by the Company on 30 November 2015 to
audit the Financial Statements for the year ending 31 August
2016 and subsequent financial periods.
• The period of total uninterrupted engagement including
previous renewals and reappointments is ten years, covering
the years ending 31 August 2016 to 31 August 2025.
• The audit opinion is consistent with the additional report to
the Audit Committee.
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Use of our report
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an Auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Ashley Coups
Senior Statutory Auditor
For and on behalf of Ernst & Young LLP, Statutory Auditor
London
5 November 2025
Independent Auditor’s Report to the Members
of Fidelity Special Values PLC
continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Income Statement
for the year ended 31 August 2025
The Notes on pages 61 to 80 form an integral part of these Financial Statements.
Year ended 31 August 2025 Year ended 31 August 2024
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains on investments 10 – 117,016 117,016 – 166,057 166,057
Gains on derivative instruments 11 – 2,195 2,195 – 19,524 19,524
Investment and derivative income 3 51,646 – 51,646 48,413 – 48,413
Other interest 3 2,375 – 2,375 2,751 – 2,751
Investment management fees 4 (6,857) – (6,857) (6,095) – (6,095)
Other expenses 5 (944) – (944) (898) – (898)
Foreign exchange (losses)/gains – (546) (546) – 204 204
Net return on ordinary activities
before finance costs and taxation 46,220 118,665 164,885 44,171 185,785 229,956
Finance costs 6 (6,225) – (6,225) (5,794) – (5,794)
Net return on ordinary activities
before taxation 39,995 118,665 158,660 38,377 185,785 224,162
Taxation on return on ordinary
activities 7 (272) – (272) (848) – (848)
Net return on ordinary activities
after taxation for the year 39,723 118,665 158,388 37,529 185,785 223,314
Return per ordinary share 8 12.28p 36.67p 48.95p 11.58p 57.32p 68.90p
The Company does not have any other comprehensive income. Accordingly, the net return on ordinary activities after taxation for the year
is also the total comprehensive income for the year and no separate Statement of Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary
and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.
No operations were acquired or discontinued in the year and all items in the above statement derive from continuing operations.
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Notes
2025
£’000
2024
£’000
Fixed assets
Investments 10 1,164,423 1,120,686
Current assets
Derivative instruments 11 1,213 4,318
Debtors 12 10,672 8,200
Amounts held at futures clearing houses and brokers 1,300 –
Cash and cash equivalents 94,109 11,749
107,294 24,267
Current liabilities
Derivative instruments 11 (3,530) (200)
Other creditors 13 (999) (1,212)
(4,529) (1,412)
Net current assets 102,765 22,855
Net assets 1,267,188 1,143,541
Capital and reserves
Share capital 14 16,205 16,205
Share premium account 15 238,442 238,442
Capital redemption reserve 15 3,256 3,256
Other non-distributable reserve 15 5,152 5,152
Capital reserve 15 949,776 834,580
Revenue reserve 15 54,357 45,906
Total Shareholders’ funds 1,267,188 1,143,541
Net asset value per ordinary share 16 392.26p 352.84p
The Financial Statements on pages 57 to 80 were approved by the Board of Directors on 5 November 2025 and were signed on its
behalf by:
Dean Buckley
Chairman
Balance Sheet
as at 31 August 2025
Company number 2972628
The Notes on pages 61 to 80 form an integral part of these Financial Statements.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Statement of Changes in Equity
for the year ended 31 August 2025
Notes
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
non-
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
Share-
holders’
funds
£’000
Total Shareholders’ funds at
31 August 2024 16,205 238,442 3,256 5,152 834,580 45,906 1,143,541
Net return on ordinary
activities after taxation
for the year – – – – 118,665 39,723 158,388
Repurchase of ordinary shares 14 – – – – (3,469) – (3,469)
Dividends paid to Shareholders 9 – – – – – (31,272) (31,272)
Total Shareholders’ funds at
31 August 2025 16,205 238,442 3,256 5,152 949,776 54,357 1,267,188
Total Shareholders’ funds at
31 August 2023 16,205 238,442 3,256 5,152 648,795 39,199 951,049
Net return on ordinary
activities after taxation
for the year – – – – 185,785 37,529 223,314
Dividends paid to Shareholders 9 – – – – – (30,822) (30,822)
Total Shareholders’ funds at
31 August 2024 16,205 238,442 3,256 5,152 834,580 45,906 1,143,541
The Notes on pages 61 to 80 form an integral part of these Financial Statements.
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Cash Flow Statement
for the year ended 31 August 2025
Notes
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Operating activities
Investment income received 42,920 42,980
Net derivative income received 5,969 4,454
Interest received 2,352 2,723
Investment management fee paid (6,820) (6,008)
Directors’ fees paid (181) (170)
Other cash payments (801) (696)
Net cash inflow from operating activities before finance costs and taxation 20 43,439 43,283
Finance costs paid (6,228) (5,853)
Overseas taxation suffered (223) (536)
Net cash inflow from operating activities 36,988 36,894
Investing activities
Purchases of investments (352,069) (353,057)
Sales of investments 425,818 282,830
Receipts on long CFDs 70,434 51,625
Payments on long CFDs (61,062) (35,747)
Receipts on short CFDs 460 950
Payments on short CFDs (1,622) (588)
Movement on amounts held at futures clearing houses and brokers (1,300) –
Net cash inflow/(outflow) from investing activities 80,659 (53,987)
Net cash inflow/(outflow) before financing activities 117,647 (17,093)
Financing activities
Dividends paid 9 (31,272) (30,822)
Repurchase of ordinary shares 14 (3,469) –
Net cash outflow from financing activities (34,741) (30,822)
Net increase/(decrease) in cash and cash equivalents 82,906 (47,915)
Cash and cash equivalents at the beginning of the year 11,749 59,460
Effect of movement in foreign exchange (546) 204
Cash and cash equivalents at the end of the year 94,109 11,749
Represented by:
Cash at bank 1,937 2,072
Amount held in Fidelity Institutional Liquidity Fund 92,172 9,677
94,109 11,749
The Notes on pages 61 to 80 form an integral part of these Financial Statements.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
1 Principal Activity
Fidelity Special Values PLC is an Investment Company incorporated in England and Wales that is listed on the London Stock Exchange.
The Company’s registration number is 2972628, and its registered office is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey KT20 6RP. The Company has been approved by HM Revenue & Customs as an Investment Trust under Section 1158 of the
Corporation Tax Act 2010 and intends to conduct its affairs so as to continue to be approved.
2 Accounting Policies
The Company has prepared its Financial Statements in accordance with UK Generally Accepted Accounting Practice (“UK GAAP”),
including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, issued by the Financial Reporting
Council (“FRC”). The Financial Statements have also been prepared in accordance with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts (“SORP”) issued by the Association of Investment
Companies (“AIC”), in July 2022.
a) Basis of accounting – The Financial Statements have been prepared on a going concern basis and under the historical cost
convention, except for the measurement at fair value of investments and derivative instruments. The Directors have a reasonable
expectation that the Company has adequate resources to continue in operational existence up to 30 November 2026 which is at
least twelve months from the date of approval of these Financial Statements. In making their assessment the Directors have reviewed
income and expense projections, reviewed the liquidity of the investment portfolio and considered the Company’s ability to meet
liabilities as they fall due. This conclusion also takes into account the Director’s assessment of the risks faced by the Company as
detailed in the Going Concern Statement on page 34 and their consideration of the upcoming continuation vote at the AGM on
11 December 2025. The Directors recommend that shareholders vote in favour of the continuation of the Company.
In preparing these Financial Statements the Directors have considered the impact of climate change risk as an emerging risk as set
out on page 25, and have concluded that there was no further impact of climate change to be taken into account as the investments
are valued based on market pricing. In line with FRS 102, investments are valued at fair value, which for the Company are quoted
bid prices for investments in active markets at the Balance Sheet date. Investments which are unlisted are priced using market-based
valuation approaches. All investments therefore reflect the market participants view of climate change risk on the investments held by
the Company.
The Company’s Going Concern Statement in the Directors’ Report on page 34 takes account of all events and conditions up to
30 November 2026, which is at least twelve months from the date of approval of these Financial Statements.
b) Significant accounting estimates and judgements – The Directors make judgements and estimates concerning the future.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, such as expectations
of future events, and are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The
judgements required in order to determine the appropriate valuation methodology of level 3 financial instruments have a risk of
causing an adjustment to the carrying amounts of assets. These judgements include making assessments of the possible valuations in
the event of a listing or other marketability related risks.
c) Segmental reporting – The Company is engaged in a single segment business and, therefore, no segmental reporting is
provided.
d) Presentation of the Income Statement – In order to reflect better the activities of an investment company and in accordance
with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and
capital nature has been prepared alongside the Income Statement. The net revenue return after taxation for the year is the measure
the Directors believe appropriate in assessing the Company’s compliance with certain requirements set out in Section 1159 of the
Corporation Tax Act 2010.
e) Income – Income from equity investments is accounted for on the date on which the right to receive the payment is established,
normally the ex-dividend date. Overseas dividends are accounted for gross of any tax deducted at source. Amounts are credited to
the revenue column of the Income Statement. Where the Company has elected to receive its dividends in the form of additional shares
rather than cash, the amount of the cash dividend foregone is recognised in the revenue column of the Income Statement. Any excess
in the value of the shares received over the amount of the cash dividend is recognised in the capital column of the Income Statement.
Special dividends are treated as a revenue receipt or a capital receipt depending on the facts and circumstances of each particular
case. Interest on securities is accounted for on an accruals basis and is credited to the revenue column of the Income Statement.
Derivative instrument income received from dividends on long contracts for difference (“CFDs”) is accounted for on the date on which
the right to receive the payment is established, normally the ex-dividend date. The amount net of tax is credited to the revenue column
of the Income Statement.
Notes to the Financial Statements
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Notes to the Financial Statements continued
2 Accounting Policies continued
Interest received on short CFDs, bank deposits, collateral and money market funds is accounted for on an accruals basis and credited
to the revenue column of the Income Statement. Interest received on CFDs represents the finance costs calculated by reference to the
notional value of the CFDs.
f) Investment management fees and other expenses – Investment management fees and other expenses are accounted for on an
accruals basis and are charged as follows:
• Investment management fees are allocated in full to revenue; and
• All other expenses are allocated in full to revenue with the exception of those directly attributable to share issues or other
capital events.
g) Functional currency and foreign exchange – The functional and reporting currency of the Company is UK sterling, which is
the currency of the primary economic environment in which the Company operates. Transactions denominated in foreign currencies
are reported in UK sterling at the rate of exchange ruling at the date of the transaction. Assets and liabilities in foreign currencies
are translated at the rates of exchange ruling at the Balance Sheet date. Foreign exchange gains and losses arising on translation
are recognised in the Income Statement as a revenue or a capital item depending on the nature of the underlying item to which
they relate.
h) Finance costs – Finance costs comprise interest on bank overdrafts and finance costs paid on CFDs, which are accounted for on
an accruals basis. Finance costs are charged in full to the revenue column of the Income Statement.
i) Taxation – The taxation charge represents the sum of current taxation and deferred taxation.
Current taxation is taxation suffered at source on overseas income less amounts recoverable under taxation treaties. Taxation is
charged or credited to the revenue column of the Income Statement, except where it relates to items of a capital nature, in which case
it is charged or credited to the capital column of the Income Statement. Where expenses are allocated between revenue and capital
any tax relief in respect of the expenses is allocated between revenue and capital returns on the marginal basis using the Company’s
effective rate of corporation tax for the accounting period. The Company is an approved Investment Trust under Section 1158 of the
Corporation Tax Act 2010 and is not liable for UK taxation on capital gains.
Deferred taxation is the taxation expected to be payable or recoverable on timing differences between the treatment of certain items
for accounting purposes and their treatment for the purposes of computing taxable profits. Deferred taxation is based on tax rates that
have been enacted or substantively enacted when the taxation is expected to be payable or recoverable. Deferred tax assets are
only recognised if it is considered more likely than not that there will be sufficient future taxable profits to utilise them.
j) Dividend paid – Dividends payable to equity Shareholders are recognised when the Company’s obligation to make payment is
established.
k) Investments – The Company’s business is investing in financial instruments with a view to profiting from their total return in the
form of income and capital growth. This portfolio of investments is managed and its performance evaluated on a fair value basis, in
accordance with a documented investment strategy, and information about the portfolio is provided on that basis to the Company’s
Board of Directors. Investments are measured at fair value with changes in fair value recognised in profit or loss, in accordance with
the provisions of both Section 11 and Section 12 of FRS 102. The fair value of investments is initially taken to be their cost and is
subsequently measured as follows:
• Listed investments are valued at bid prices, or last market prices, depending on the convention of the exchange on which they
are listed; and
• Unlisted investments are not quoted, or are not frequently traded, and are stated at the best estimate of fair value. The
Manager’s Fair Value Committee (“FVC”), which is independent of the Portfolio Manager’s team, meets quarterly to determine
the fair value of unlisted investments.
The FVC provide a recommendation of fair values to the Board using market-based approaches such as multiples, industry valuation
benchmarks and available market prices. Consideration is given to the cost of the investment, recent arm’s length transactions in the
same or similar investments and the financial performance of the investment since purchase. This pricing methodology is subject to a
detailed review and appropriate challenge by the Directors.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
2 Accounting Policies continued
In accordance with the AIC SORP, the Company includes transaction costs, incidental to the purchase or sale of investments, within
gains on investments in the capital column of the Income Statement and has disclosed these costs in Note 10 on page 68.
l) Derivative instruments – When appropriate, permitted transactions in derivative instruments are used. Derivative transactions
into which the Company may enter include long and short CFDs, futures, options and warrants. Derivatives are classified as other
financial instruments and are initially accounted for and measured at fair value on the date the derivative contract is entered into and
subsequently measured at fair value as follows:
• Long and short CFDs – the difference between the strike price and the value of the underlying shares in the contract;
• Futures – the difference between the contract price and the quoted trade price; and
• Options – value based on similar instruments or the quoted trade price for the contract.
Where transactions are used to protect or enhance income, if the circumstances support this, the income and expenses derived are
included in net income in the revenue column of the Income Statement. Where such transactions are used to protect or enhance
capital, if the circumstances support this, the gains and losses derived are included in gains/(losses) on derivative instruments in the
capital column of the Income Statement. Any positions on such transactions open at the year end are reflected on the Balance Sheet
at their fair value within current assets or current liabilities.
m) Debtors – Debtors include securities sold for future settlement, amounts receivable on settlement of derivatives, accrued income,
taxation recoverable and other debtors and prepayments incurred in the ordinary course of business. If collection is expected in one
year or less (or in the normal operating cycle of the business, if longer) they are classified as current assets. If not, they are presented
as non-current assets. They are recognised initially at fair value and, where applicable, subsequently measured at amortised cost
using the effective interest rate method.
n) Amounts held at futures clearing houses and brokers – These are amounts held in segregated accounts as collateral on behalf
of brokers and are carried at amortised cost.
o) Cash and cash equivalents – Cash and cash equivalents may comprise cash at bank and money market funds which are
short-term, highly liquid and are readily convertible to a known amount of cash. These are subject to an insignificant risk of changes
in value.
p) Other creditors – Other creditors include securities purchased for future settlement, finance costs payable, investment management
fees and other creditors and expenses accrued in the ordinary course of business. If payment is due within one year or less (or in
the normal operating cycle of the business, if longer) they are classified as current liabilities. If not, they are presented as non-current
liabilities. They are recognised initially at fair value and, where applicable, subsequently measured at amortised cost using the
effective interest rate method.
q) Capital reserve – The following are accounted for in the capital reserve:
• Gains and losses on the disposal of investments and derivative instruments;
• Changes in the fair value of investments and derivative instruments held at the year end;
• Foreign exchange gains and losses of a capital nature;
• Dividends receivable which are capital in nature; and
• Costs of repurchasing or issuing ordinary shares.
Technical guidance issued by the Institute of Chartered Accountants in England and Wales in TECH 02/17BL, guidance on the
determination of realised profits and losses in the context of distributions under the Companies Act 2006, states that changes in
the fair value of investments which are readily convertible to cash, without accepting adverse terms at the Balance Sheet date, can
be treated as realised. Capital reserves realised and unrealised are shown in aggregate as capital reserve in the Statement of
Changes in Equity and the Balance Sheet. At the Balance Sheet date, the portfolio of the Company consisted of investments listed
on a recognised stock exchange and derivative instruments contracted with counterparties having an adequate credit rating, and
the portfolio was considered to be readily convertible to cash, with the exception of the level 3 investments which had unrealised
investment holding losses of £26,458,000 (2024: losses of £10,868,000).
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Annual Report 2025
Notes to the Financial Statements continued
3 Income
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Investment income
UK dividends 33,971 30,235
UK property income distributions 1,522 135
UK scrip dividends 512 1,310
UK property income scrip dividends – 157
Interest on securities 1,512 1,528
Overseas dividends 7,562 10,395
45,079 43,760
Derivative income
Dividends received on long CFDs 6,567 4,653
Investment and derivative income 51,646 48,413
Other interest
Interest received on bank deposits, collateral and money market funds 2,352 2,723
Interest received on CFDs 23 28
2,375 2,751
Total income 54,021 51,164
Special dividends of £2,947,000 (2024: £5,206,000) have been recognised in capital during the year.
4 Investment Management Fees
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Investment management fees 6,857 6,095
FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management
to FIL Investments International (“FII”). Both companies are Fidelity group companies.
FII charges investment management fees at an annual rate of 0.60% of net assets. Fees are accrued on a daily basis and payable
monthly.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
5 Other Expenses
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
AIC fees 24 21
Custody fees 28 27
Depositary fees 59 58
Directors’ expenses 18 15
Directors’ fees
1
182 170
Legal and professional fees 93 101
Marketing expenses 230 229
Printing and publication expenses 147 122
Registrars’ fees 80 74
Fees payable to the Company’s Independent Auditor for the audit of the Financial Statements
2,3
59 53
Sundry other expenses 24 28
Other expenses 944 898
1 Details of the breakdown of Directors’ fees are disclosed in the Directors’ Remuneration Report on page 44.
2 The VAT payable on audit fees is included in sundry other expenses.
3 Included in the current year's audit fee is an amount of £3,750 in respect of additional scope of work relating to the transition of Fidelity's reporting functions to
JP Morgan and this has been paid by Fidelity.
6 Finance Costs
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Interest paid on CFDs 6,122 5,765
Interest paid on bank overdrafts 103 29
6,225 5,794
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Notes to the Financial Statements continued
7 Taxation on Return on Ordinary Activities
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
a) Analysis of the taxation charge for the year
Overseas taxation 272 848
Taxation charge for the year (see Note 7b) 272 848
b) Factors affecting the taxation charge for the year
The taxation charge for the year is lower than the standard rate of UK corporation tax for an investment trust company of 25% (2024:
25%). A reconciliation of the standard rate of UK corporation tax to the taxation charge for the year is shown below:
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Net return on ordinary activities before taxation 158,660 224,162
Net return on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of
25% (2024: 25%) 39,665 56,040
Effects of:
Capital gains not taxable
1
(29,666) (46,446)
Income not taxable (10,558) (10,485)
Excess management expenses 559 891
Overseas taxation 272 848
Total taxation charge for the year (see Note 7a) 272 848
1 The Company is exempt from UK corporation tax on capital gains as it meets the HM Revenue & Customs criteria for an investment company set out in Section 1159 of
the Corporation Tax Act 2010.
c) Deferred taxation
A deferred tax asset of £18,685,000 (2024: £18,126,000), in respect of excess expenses of £74,740,000 (2024: £72,504,000) available
to be set off against future taxable profits has not been recognised as it is unlikely that there will be sufficient future taxable profits to
utilise these expenses.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
8 Return per Ordinary Share
Year ended
31.08.25
Year ended
31.08.24
Revenue return per ordinary share 12.28p 11.58p
Capital return per ordinary share 36.67p 57.32p
Total return per ordinary share 48.95p 68.90p
The return per ordinary share is based on the net return on ordinary activities after taxation for the year divided by the weighted
average number of ordinary shares held outside of Treasury during the year, as shown below:
£’000 £’000
Net revenue return on ordinary activities after taxation 39,723 37,529
Net capital return on ordinary activities after taxation 118,665 185,785
Net total return on ordinary activities after taxation 158,388 223,314
Number Number
Weighted average number of ordinary shares held outside of Treasury 323,570,427 324,098,920
9 Dividends Paid to Shareholders
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Dividends paid
Interim dividend of 3.36 pence per ordinary share paid for the year ended 31 August 2025 10,854 –
Final dividend of 6.30 pence per ordinary share paid for the year ended 31 August 2024 20,418 –
Interim dividend of 3.24 pence per ordinary share paid for the year ended 31 August 2024 – 10,501
Final dividend of 6.27 pence per ordinary share paid for the year ended 31 August 2023 – 20,321
31,272 30,822
Dividends proposed
Final dividend proposed of 6.84 pence per ordinary share for the year ended 31 August 2025 22,097 –
Final dividend proposed of 6.30 pence per ordinary share for the year ended 31 August 2024 – 20,418
22,097 20,418
The Directors have proposed the payment of a final dividend of 6.84 pence per ordinary share for the year ended 31 August 2025,
which is subject to approval by Shareholders at the Annual General Meeting on 11 December 2025 and has not been included as a
liability in these Financial Statements. The dividends will be paid on 13 January 2026 to Shareholders on the register at the close of
business on 28 November 2025 (ex-dividend date 27 November 2025).
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Notes to the Financial Statements continued
10 Investments
2025
£’000
2024
£’000
Listed investments 1,162,102 1,119,970
Unlisted investments 2,321 716
Total investments at fair value 1,164,423 1,120,686
Opening book cost 1,003,728 914,377
Opening investment holding gains/(losses) 116,958 (31,685)
Opening fair value 1,120,686 882,692
Movements in the year
Purchases at cost 352,391 354,795
Sales – proceeds (425,670) (282,858)
Gains on investments 117,016 166,057
Closing fair value 1,164,423 1,120,686
Closing book cost 989,274 1,003,728
Closing investment holding gains 175,149 116,958
Closing fair value 1,164,423 1,120,686
The Company received £425,670,000 (2024: £282,858,000) from investments sold in the year. The book cost of these investments when
they were purchased was £366,845,000 (2024: £265,444,000). These investments have been revalued over time and until they were
sold any unrealised gains/(losses) were included in the fair value of the investments.
Investment transaction costs
Transaction costs incurred in the acquisition and disposal of investments, which are included in the gains on investments above, were
as follows:
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Purchases transaction costs 1,869 1,606
Sales transaction costs 215 135
2,084 1,741
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
11 Derivative Instruments
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Gains on long CFD positions closed 9,792 15,864
(Losses)/gains on short CFD positions closed (1,162) 362
Movement in investment holding (losses)/gains on long CFDs (6,537) 3,400
Movement in investment holding gains/(losses) on short CFDs 102 (102)
2,195 19,524
2025
Fair value
£’000
2024
Fair value
£’000
Derivative instruments recognised on the Balance Sheet
Derivative instrument assets 1,213 4,318
Derivative instrument liabilities (3,530) (200)
(2,317) 4,118
Fair value
£’000
2025
Asset
exposure
£’000
Fair value
£’000
2024
Asset
exposure
£’000
At the year end the Company held the following derivative
instruments
Long CFDs (2,317) 171,164 4,220 115,050
Short CFDs –– (102) 2,117
(2,317) 171,164 4,118 117,167
12 Debtors
2025
£’000
2024
£’000
Securities sold for future settlement – 146
Amounts receivable on settlement of derivatives 420 –
Accrued income 8,866 6,598
Overseas taxation recoverable 1,359 1,408
Other debtors and prepayments 27 48
10,672 8,200
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Notes to the Financial Statements continued
13 Other Creditors
2025
£’000
2024
£’000
Securities purchased for future settlement 81 271
Finance costs payable 147 150
Creditors and accruals 771 791
999 1,212
14 Share Capital
Number of
shares
2025
Nominal
value
£’000
Number of
shares
2024
Nominal
value
£’000
Issued, allotted and fully paid Ordinary shares of 5 pence each
held outside of Treasury
Beginning of the year 324,098,920 16,205 324,098,920 16,205
Ordinary shares repurchased into Treasury (1,050,000) (53) – –
End of the year 323,048,920 16,152 324,098,920 16,205
Ordinary shares of 5 pence each held in Treasury
1
Beginning of the year – – – –
Ordinary shares repurchased into Treasury 1,050,000 53 – –
End of the year 1,050,000 53 – –
Total share capital 16,205 16,205
1 Ordinary shares held in Treasury carry no rights to vote, to receive a dividend or to participate in a winding up of the Company.
The cost of ordinary shares repurchased into Treasury during the year was £3,469,000 (2024: £nil).
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
15 Capital and Reserves
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
non-
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
Share-
holders’
funds
£’000
At 1 September 2024 16,205 238,442 3,256 5,152 834,580 45,906 1,143,541
Gains on investments (see Note 10) – – – – 117,016 – 117,016
Gains on long CFDs (see Note 11) – – – – 3,255 – 3,255
Losses on short CFDs (see Note 11) – – – – (1,060) – (1,060)
Foreign exchange losses – – – – (546) – (546)
Revenue return on ordinary activities
after taxation for the year – – – – – 39,723 39,723
Dividends paid to Shareholders (see
Note 9) – – – – – (31,272) (31,272)
Repurchase of ordinary shares (see
Note 14) – – – – (3,469) – (3,469)
At 31 August 2025 16,205 238,442 3,256 5,152 949,776 54,357 1,267,188
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
non-
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
Share-
holders’
funds
£’000
At 1 September 2023 16,205 238,442 3,256 5,152 648,795 39,199 951,049
Gains on investments (see Note 10) – – – – 166,057 – 166,057
Gains on long CFDs (see Note 11) – – – – 19,264 – 19,264
Gains on short CFDs (see Note 11) – – – – 260 – 260
Foreign exchange gains – – – – 204 – 204
Revenue return on ordinary activities
after taxation for the year – – – – – 37,529 37,529
Dividends paid to Shareholders (see
Note 9) – – – – – (30,822) (30,822)
At 31 August 2024 16,205 238,442 3,256 5,152 834,580 45,906 1,143,541
The capital reserve balance at 31 August 2025 includes investment holding gains of £175,149,000 (2024: gains of £116,958,000) as
detailed in Note 10. See Note 2 (q) for further details.
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Notes to the Financial Statements continued
16 Net Asset Value per Ordinary Share
The calculation of the net asset value per ordinary share is based on the total Shareholders’ funds divided by the number of ordinary
shares held outside of Treasury.
2025 2024
Total Shareholders’ funds
£1,267,188,000 £1,143,541,000
Ordinary shares held outside of Treasury at year end 323,048,920 324,098,920
Net asset value per ordinary share 392.26p 352.84p
It is the Company’s policy that shares held in Treasury will only be reissued at net asset value per ordinary share or at a premium to
net asset value per ordinary share and, therefore, shares held in Treasury have no dilutive effect.
17 Financial Instruments
Management of risk
The Company’s investing activities in pursuit of its investment objective involve certain inherent risks. The Board confirms that there is
an ongoing process for identifying, evaluating and managing the risks faced by the Company. The Board, with the assistance of the
Manager, has developed a risk matrix which, as part of the internal control process, identifies the risks that the Company faces. Risks
are identified and graded in this process, together with steps taken in mitigation, and are updated and reviewed on an ongoing
basis. Risks identified are shown in the Strategic Report on pages 25 to 29.
This note refers to the identification, measurement and management of risks potentially affecting the value of financial instruments.
The Company’s financial instruments may comprise:
• Equity shares (listed and unlisted) and bonds held in accordance with the Company’s investment objective and policies;
• Derivative instruments which comprise CFDs, forward currency contracts, futures and options on listed stocks and equity
indices; and
• Cash, liquid resources and short-term debtors and creditors that arise from its operations.
The risks identified arising from the Company’s financial instruments are market price risk (which comprises interest rate risk, foreign
currency risk and other price risk), liquidity risk, counterparty risk, credit risk and derivative instruments risk. The Board reviews and
agrees policies for managing each of these risks, which are summarised below. These policies are consistent with those followed
last year.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
17 Financial Instruments continued
MARKET PRICE RISK
Interest rate risk
The Company finances its operations through its share capital and reserves. In addition, the Company has gearing through the use of
derivative instruments. The Board imposes limits to ensure gearing levels are appropriate. The Company is exposed to a financial risk
arising as a result of any increases in interest rates associated with the funding of the derivative instruments.
Interest rate risk exposure
The values of the Company’s financial instruments that are exposed to movements in interest rates are shown below:
2025
£’000
2024
£’000
Exposure to financial instruments that bear interest
Long CFDs – exposure less fair value 173,481 110,830
Exposure to financial instruments that earn interest
Cash and cash equivalents 94,109 11,749
Short CFDs – exposure plus fair value – 2,015
Amounts held at futures clearing houses and brokers 1,300 –
95,409 13,764
Net exposure to financial instruments that bear interest 78,072 97,066
Foreign currency risk
The Company does not carry out currency speculation. The Company’s net return on ordinary activities after taxation for the year and
its net assets can be affected by foreign exchange rate movements because the Company has income, assets and liabilities which
are denominated in currencies other than the Company’s functional currency which is UK sterling. The Company can also be subject
to short-term exposure to exchange rate movements, for example, between the date when an investment is purchased or sold and the
date when settlement of the transaction occurs.
Three principal areas have been identified where foreign currency risk could impact the Company:
• Movements in currency exchange rates affecting the value of investments and derivative instruments;
• Movements in currency exchange rates affecting short-term timing differences; and
• Movements in currency exchange rates affecting income received.
The portfolio management team monitor foreign currency risk, but it is not the Company’s policy to hedge against currency risk.
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Notes to the Financial Statements continued
17 Financial Instruments continued
Currency exposure of financial assets
The currency exposure profile of the Company’s financial assets is shown below:
Currency
Investments
held at fair
value
£’000
Long
exposure to
derivative
instruments
1
£’000
Debtors
2
£’000
Cash
and cash
equivalents
3
£’000
2025
Total
£’000
Euro 60,130 80,138 1,510 – 141,778
US dollar 10,891 – 981 59,871 71,743
Australian dollar 14,744 – – – 14,744
Swiss franc 11,268 – 443 – 11,711
South African rand 1,347 – – – 1,347
Georgian lari – – 121 – 121
Canadian dollar – – – 27 27
UK sterling 1,066,043 91,026 8,917 34,211 1,200,197
1,164,423 171,164 11,972 94,109 1,441,668
1 The exposure to the market of long CFDs.
2 Debtors include amounts held at futures clearing houses and brokers.
3 Cash and cash equivalents are made up of £1,937,000 cash at bank and £92,172,000 held in Fidelity Institutional Liquidity Fund.
Currency
Investments
held at fair
value
£’000
Long
exposure to
derivative
instruments
1
£’000
Debtors
£’000
Cash
and cash
equivalents
2
£’000
2024
Total
£’000
Euro 54,522 41,800 751 – 97,073
US dollar 39,752 – 542 33 40,327
Swiss franc 37,673 – 273 – 37,946
Swedish krona 22,811–––22,811
Australian dollar 12,439–––12,439
South African rand 2,024–––2,024
Canadian dollar – – – 28 28
UK sterling 951,465 73,250 6,634 11,688 1,043,037
1,120,686 115,050 8,200 11,749 1,255,685
1 The exposure to the market of long CFDs.
2 Cash and cash equivalents are made up of £2,072,000 cash at bank and £9,677,000 held in Fidelity Institutional Liquidity Fund.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
17 Financial Instruments continued
Currency exposure of financial liabilities
The Company finances its investment activities through its ordinary share capital and reserves. The Company’s financial liabilities
comprises short positions on derivative instruments and other creditors. The currency profile of these financial liabilities is shown
below:
Currency
Short exposure to
derivative
instruments
1
£’000
Other
creditors
£’000
2025
Total
£’000
Euro – 48 48
UK sterling – 951 951
– 999 999
1 The exposure to the market of short CFDs.
Currency
Short exposure to
derivative
instruments
1
£’000
Other
creditors
£’000
2024
Total
£’000
US dollar 2,117 1 2,118
Euro – 62 62
UK sterling – 1,149 1,149
2,117 1,212 3,329
1 The exposure to the market of short CFDs.
Other price risk
Other price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It
represents the potential loss the Company might suffer through holding market positions in the face of price movements. The Board
meets quarterly to consider the asset allocation of the portfolio and the risk associated with particular industry sectors within the
parameters of the investment objective. The Portfolio Manager is responsible for actively monitoring the existing portfolio selected
in accordance with the overall asset allocation parameters described above and seeks to ensure that individual stocks also meet
an acceptable risk/reward profile. Other price risks arising from derivative positions, mainly due to the underlying exposures, are
estimated using Value at Risk and Stress Tests as set out in the Company’s internal Risk Management Process Document.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations associated with financial liabilities. The
Company's assets mainly comprise readily realisable securities and derivative instruments which can be sold easily to meet funding
commitments if necessary. Short-term flexibility is achieved by the use of a bank overdraft, if required.
Liquidity risk exposure
At 31 August 2025, the undiscounted gross cash outflows of the financial liabilities were all repayable within one year and consisted of
derivative instrument liabilities of £3,530,000 (2024: £200,000) and other creditors of £999,000 (2024: £1,212,000).
Counterparty risk
Certain derivative instruments in which the Company may invest are not traded on an exchange, but instead will be traded between
counterparties based on contractual relationships, under the terms outlined in the International Swaps and Derivatives Association’s
(“ISDA”) market standard derivative legal documentation. These are known as Over the Counter (“OTC”) trades. As a result, the
Company is subject to the risk that a counterparty may not perform its obligations under the related contract. In accordance with
the risk management process which the Investment Manager employs, this risk is minimised by only entering into transactions with
counterparties which are believed to have an adequate credit rating at the time the transaction is entered into, by ensuring that formal
legal agreements covering the terms of the contract are entered into in advance, and through adopting a counterparty risk framework
which measures, monitors and manages counterparty risk by the use of internal and external credit agency ratings and by evaluating
derivative instrument credit risk exposure.
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Notes to the Financial Statements continued
17 Financial Instruments continued
For OTC and exchange traded derivative transactions, collateral is used to reduce the risk of both parties to the contract. Collateral is
managed on a daily basis for all relevant transactions.
Collateral
collateral
received
£'000
2025
collateral
pledged
£’000
collateral
received
£'000
2024
collateral
pledged
£'000
Goldman Sachs International Ltd 260 – 150 –
HSBC Bank plc 140 – 380 –
J.P. Morgan plc – 260 2,370 –
Morgan Stanley & Co. International Ltd ––––
UBS AG – 1,040 510 –
Total 400 1,300 3,410 –
Credit risk
Financial instruments may be adversely affected if any of the institutions with which money is deposited suffer insolvency or other
financial difficulties. All transactions are carried out with brokers that have been approved by the Manager and are settled on a
delivery versus payment basis. Limits are set on the amount that may be due from any one broker and are kept under review by the
Manager. Exposure to credit risk arises on unsettled security transactions and derivative instrument contracts and cash at bank.
Derivative instrument risk
The risks and risk management processes which result from the use of derivative instruments are set out in a Risk Management
Process Document. Derivative instruments are used by the Manager for the following purposes:
• To gain unfunded long exposure to equity markets, sectors or single stocks. Unfunded exposure is exposure gained without an
initial flow of capital;
• To hedge equity market risk using derivatives with the intention of at least partially mitigating losses in the exposures of the
Company’s portfolio as a result of falls in the equity market; and
• To position short exposures in the Company’s portfolio. These uncovered exposures benefit from falls in the prices of shares which
the Portfolio Managers believes to be over valued. These positions, therefore, distinguish themselves from other short exposures
held for hedging purposes since they are expected to add risk to the portfolio.
RISK SENSITIVITY ANALYSIS
Interest rate risk sensitivity analysis
Based on the financial instruments held and interest rates at 31 August 2025, an increase of 1.00% in interest rates throughout the
year, with all other variables held constant, would have decreased the Company’s net return on ordinary activities after taxation for
the year and decreased the net assets of the Company by £781,000 (2024: decreased the net return and decreased the net assets by
£971,000). A decrease of 1.00% in interest rates throughout the year would have had an equal but opposite effect.
Foreign currency risk sensitivity analysis
Based on the financial instruments held and currency exchange rates at 31 August 2025, a 10% strengthening of the UK sterling
exchange rate against foreign currencies, with all other variables held constant, would have decreased the Company’s net return on
ordinary activities after taxation for the year and decreased the net assets of the Company by £21,947,000 (2024: decreased the net
return and decreased the net assets by £19,133,000). A 10% weakening of the UK sterling exchange rate against foreign currencies,
with all other variables held constant, would have increased the Company’s net return on ordinary activities after taxation for the
year and increased the net assets of the Company by £26,824,000 (2024: increased the net return and increased the net assets
by £23,385,000).
Other price risk – exposure to investments sensitivity analysis
Based on the listed investments held and share prices at 31 August 2025, an increase of 10% in share prices, with all other variables
held constant, would have increased the Company’s net return on ordinary activities after taxation for the year and increased the net
assets of the Company by £116,398,000 (2024: increased the net return and increased the net assets by £111,997,000). A decrease of
10% in share prices would have had an equal and opposite effect.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
17 Financial Instruments continued
An increase of 10% in the valuation of unlisted investments held at 31 August 2025 would have increased the Company’s net return
on ordinary activities after taxation for the year and increased the net assets of the Company by £44,000 (2024: increased the net
return after taxation and increased the net assets by £72,000). A decrease of 10% in the valuation would have had an equal and
opposite effect.
Other price risk – net exposure to derivative instruments sensitivity analysis
Based on the derivative instruments held and share prices at 31 August 2025, an increase of 10% in the share prices underlying the
derivative instruments, with all other variables held constant, would have increased the Company’s net return on ordinary activities
after taxation for the year and increased the net assets of the Company by £17,116,000 (2024: increased the net return and increased
the net assets by £11,717,000). A decrease of 10% in share prices would have had an equal and opposite effect.
Fair Value of Financial Assets and Liabilities
Financial assets and liabilities are stated in the Balance Sheet at values which are not materially different to their fair values. As
explained in Notes 2 (k) and (l) on pages 62 and 63 investments and derivative instruments are shown at fair value.
Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of
three levels, according to the relative reliability of the inputs used to estimate the fair values.
Classification Input
Level 1
Valued using quoted prices in active markets for identical assets
Level 2
Valued by reference to inputs other than quoted prices included in level 1 that are observable
(i.e. developed using market data) for the asset or liability, either directly or indirectly
Level 3
Valued by reference to valuation techniques using inputs that are not based on observable
market data
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value
measurement of the relevant asset. The valuation techniques used by the Company are explained in Notes 2 (k) and (l). The table
below sets out the Company’s fair value hierarchy:
Financial assets at fair value through profit or loss
Level 1
£’000
Level 2
£’000
Level 3
£’000
2025
Total
£’000
Investments 1,159,745 2,357 2,321 1,164,423
Derivative instrument assets – 1,213 – 1,213
1,159,745 3,570 2,321 1,165,636
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – (3,530) – (3,530)
Financial assets at fair value through profit or loss
Level 1
£’000
Level 2
£’000
Level 3
£’000
2024
Total
£’000
Investments 1,096,402 23,413 871 1,120,686
Derivative instrument assets – 4,318 – 4,318
1,096,402 27,731 871 1,125,004
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – (200) – (200)
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Notes to the Financial Statements continued
17 Financial Instruments continued
The table below sets out the movements in level 3 financial instruments during the year:
2025
£’000
2024
£’000
Beginning of the year 871 2,095
Sales proceeds – Marwyn Value Investors – (99)
Sales gain – Marwyn Value Investors – 59
Transfer into level 3 at cost – Hostmore and John Wood Group
1
17,040 –
Movement in investment holding losses (15,590) (1,184)
End of the year 2,321 871
1 Financial instruments are transferred into level 3 on the date they are suspended, delisted or when they have not traded for thirty days.
Marwyn Value Investors
Marwyn Value Investors is a closed-ended fund incorporated in the United Kingdom. The fund is highly illiquid and the valuation at
31 August 2025 continues to be based on the indicative bid price in the absence of a last trade price. As at 31 August 2025, its fair
value was £154,000 (2024: £154,000).
TVC Holdings
TVC Holdings is an unlisted investment holding company incorporated in Ireland. The company was delisted from the Dublin Stock
Exchange on 11 August 2014. In December 2024 a distribution of EUR 0.09 was received and the price was subsequently changed to
EUR 0.014. As at 31 August 2025, its fair value was £49,000 (2024: £251,000).
Studio Retail Group
Studio Retail Group operated as a multi-channel retail company. On 14 February 2022, the company was suspended from trading
on the London Stock Exchange. The company is now delisted and in administration. As at 31 August 2025, its fair value was £nil
(2024: £nil).
McColl’s Retail Group
McColl’s Retail Group owns and operates convenience and newsagent stores. The company was suspended from trading on 6 May
2022 after appointing administrators. As at 31 August 2025, its fair value was £nil (2024: £nil).
Prax Exploration & Production
Hurricane Energy plc, an oil and gas exploration company, delisted from the London Stock Exchange in June 2023, after it was
acquired by Prax Exploration & Production. The valuation on 31 August 2025 is based on the latest trade price from the JP Jenkins
platform. As at 31 August 2025, its fair value was £390,000 (2024: £466,000).
Unbound Group
Unbound Group plc is a UK based company engaged in selling a range of brands focused on the over 55 age demographics. On
17 July 2023, the company ceased trading and has subsequently gone into administration. As at 31 August 2025, its fair value was £nil
(2024: £nil).
Hostmore
Hostmore, a hospitality business, was suspended from the London Stock Exchange on 1 May 2025 and entered administration on
18 September 2024. As at 31 August 2025, its fair value was £nil (2024: £213,000).
John Wood Group
John Wood, provider of project, engineering and technical services, was suspended from the London Stock Exchange following delays
in publishing its financial statements. The valuation at the reporting date was based on the suspended price at 1 May 2025. As at
31 August 2025, the fair value for both the common stock and CFD was £1,996,000 (2024: £11,530,000).
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
18 Capital Resources and Gearing
The Company does not have any externally imposed capital requirements. The financial resources of the Company comprise its share
capital and reserves, as disclosed in the Balance Sheet on page 58 and any gearing, which is managed by the use of derivative
instruments. Financial resources are managed in accordance with the Company’s investment policy and in pursuit of its investment
objective, both of which are detailed in the Strategic Report on pages 23 and 24. The principal risks and their management are
disclosed in the Strategic Report on pages 25 to 29.
The Company’s gross and net gearing at the year end is set out below:
2025
Gross gearing
Asset exposure
Net gearing
Asset exposure
£’000 %
1
£’000 %
1
Investments 1,164,423 91.9 1,164,423 91.9
Long CFDs 171,164 13.5 171,164 13.5
Total long exposures 1,335,587 105.4 1,335,587 105.4
Short CFDs –– ––
Gross asset exposure/net market exposure 1,335,587 105.4 1,335,587 105.4
Shareholders’ funds 1,267,188 1,267,188
Gearing
2
5.4% 5.4%
2024
Gross gearing
Asset exposure
Net gearing
Asset exposure
£’000 %
1
£’000 %
1
Investments 1,120,686 98.0 1,120,686 98.0
Long CFDs 115,050 10.1 115,050 10.1
Total long exposures 1,235,736 108.1 1,235,736 108.1
Short CFDs 2,117 0.2 (2,117) (0.2)
Gross asset exposure/net market exposure 1,237,853 108.3 1,233,619 107.9
Shareholders’ funds 1,143,541 1,143,541
Gearing
2
8.3% 7.9%
1 Asset exposure to the market expressed as a percentage of Shareholders’ funds.
2 Gearing is the amount by which gross asset exposure/net market exposure exceeds Shareholders’ funds expressed as a percentage of Shareholders’ funds.
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Notes to the Financial Statements continued
19 Transactions with the Managers and Related Parties
FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management
and the role of company secretary to FIL Investments International (“FII”). Both companies are Fidelity group companies.
Details of the current fee arrangements are given in the Directors’ Report on page 34. During the year, the following expenses were
payable to FII:
31 August
2025
£’000
31 August
2024
£’000
Investment management fees 6,857 6,095
Marketing fees 230 229
At the Balance Sheet date, the following balances payable to FII were accrued and included in other creditors:
31 August
2025
£’000
31 August
2024
£’000
Investment management fees 607 570
Marketing fees 33 52
Disclosures of the Directors’ interests in the ordinary shares of the Company and Director’s fees and taxable expenses relating to
reasonable travel expenses payable to the Directors are given in the Directors’ Remuneration Report on pages 44 and 45. In addition
to the fees and taxable expenses disclosed in the Directors’ Remuneration Report, £24,000 (2024: £19,000) of employers’ National
Insurance contributions were paid by the Company. At the Balance Sheet date, Directors’ fees of £13,000 (2024: £14,000) were
accrued and payable.
20 Reconciliation of Net Return on Ordinary Activities before Finance Costs and Taxation to Net Cash Inflow from Operating
Activities before Finance Costs and Taxation
Year ended
31.08.25
£’000
Year ended
31.08.24
£’000
Net total return on ordinary activities before finance costs and taxation 164,885 229,956
Less: net capital return on ordinary activities before finance costs and taxation (118,665) (185,785)
Net revenue return on ordinary activities before finance costs and taxation 46,220 44,171
Scrip dividends (512) (1,467)
(Increase)/decrease in debtors (2,247) 440
(Decrease)/increase in other creditors (22) 139
Net cash inflow from operating activities before finance costs and taxation 43,439 43,283
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
The Company uses the following Alternative Performance Measures and these are all defined in the Glossary of Terms on
pages 93 to 95.
Discount/Premium
Details of the Company’s discount are on the Financial Highlights page.
Gearing
See Note 18 on page 79 for details of the Company’s gearing (both gross and net).
Net Asset Value (“NAV”) per Ordinary Share
See the Balance Sheet on page 58 and Note16 on page 72 for further details.
Ongoing Charges
The ongoing charges have been calculated in accordance with guidance issued by the AIC as the total of investment management
fees and other expenses expressed as a percentage of the average net asset values throughout the year.
2025 2024
Investment management fees (£’000) 6,857 6,095
Other expenses (£’000) 944 898
Ongoing charges (£’000) 7,801 6,993
Ongoing charges 0.68% 0.70%
Revenue, Capital and Total Returns per Share
See the Income Statement on page 57 and Note 8 on page 67 for further details.
Alternative Performance Measures
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Total Return Performance
Total return performance is considered to be an Alternative Performance Measure. The NAV per ordinary share total return includes
reinvestment of the dividend in the NAV of the Company on the ex-dividend date. The ordinary share price total return includes the
reinvestment of the net dividend in the month that the share price goes ex-dividend.
The tables below provide information relating to the NAV per ordinary share and the ordinary share price of the Company, the impact
of the dividend reinvestments and the total returns for the years ended 31 August 2025 and 31 August 2024.
2025
Net asset
value per
ordinary
share
Ordinary
share
price
31 August 2024 352.84p 321.50p
31 August 2025 392.26p 380.00p
Change in year +11.2% +18.2%
Impact of dividend reinvestments +3.1% +3.6%
Total return for the year +14.3% +21.8%
2024
Net asset
value per
ordinary
share
Ordinary
share
price
31 August 2023 293.44p 267.50p
31 August 2024 352.84p 321.50p
Change in year +20.2% +20.2%
Impact of dividend reinvestments +3.9% +4.1%
Total return for the year +24.1% +24.3%
Alternative Performance Measures continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Financial Calendar
The key dates in the Company’s calendar are:
31 August 2025 – Financial Year End
November 2025 – Announcement of the annual results for the year ended 31 August 2025
November 2025 – Publication of the Annual Report
27 November 2025 – Ex-Dividend Date
28 November 2025 – Dividend Record Date
11 December 2025 – Annual General Meeting
13 January 2026 – Payment of Final Dividend
28 February 2026 – Half-Year End
April 2026 – Announcement of the Half-Yearly Results for the six months to 28 February 2026
April 2026 – Publication of the Half-Yearly Report
May 2026 – Ex-Dividend and Dividend Record Date
June 2026 – Payment of Interim Dividend
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Notice is hereby given that the Annual General Meeting of
Fidelity Special Values PLC will be held 4 Cannon Street,
London EC4M 5AB and virtually via the Lumi AGM meeting
platform on Thursday, 11 December 2025 at 11.00 am for the
following purposes:
1. To receive and adopt the Annual Report and Financial
Statements for the year ended 31 August 2025.
2. To declare that a final dividend for the year ended
31 August 2025 of 6.84 pence per ordinary share be paid
to shareholders on the register as at close of business on
28 November 2025.
3. To re-elect Mrs Claire Boyle as a Director.
4. To elect Mr Christopher Casey as a Director.
5. To re-elect Mr Ominder Dhillon as a Director.
6. To re-elect Mrs Alison McGregor as a Director.
7. To approve the Directors’ Remuneration Report (excluding
the section headed “The Remuneration Policy” set out on
page 43) for the year ended 31 August 2025.
8. To approve the Directors’ Remuneration Policy as stated in
the Directors’ Remuneration Report on page 43.
9. To appoint PricewaterhouseCoopers LLP as Auditor of the
Company to hold office until the conclusion of the next
general meeting at which financial statements are laid
before the Company.
10. To authorise the Directors to determine the Auditor’s
remuneration.
To consider and, if thought fit, pass the following special business
resolutions of which Resolutions 11 and 14 will be proposed
as ordinary resolutions and Resolutions 12, 13 and 15 will be
proposed as special resolutions.
Authority to Allot Ordinary Shares and Disapply Pre-Emption
Rights
Resolutions 11 and 12 will, if approved, authorise the Directors
to allot a limited number of new ordinary shares (or to sell any
ordinary shares which the Company elects to hold in Treasury)
for cash without first offering such shares to existing ordinary
shareholders pro rata to their existing holdings. The limit set
by the Board is 10% of the number of ordinary shares of the
Company (including Treasury shares) in issue on 5 November
2025. The Directors will only issue new ordinary shares, or dispose
of ordinary shares held in Treasury, under this authority in order
to take advantage of opportunities in the market as they arise
and only if they believe it is advantageous to the Company’s
shareholders to do so. Any ordinary shares held in Treasury would
be re-issued at net asset value (“NAV”) per ordinary share or at
a premium to NAV per ordinary share. This would ensure that the
net effect of repurchasing and then re-issuing the ordinary shares
would enhance NAV per ordinary share.
11. THAT the Directors be and they are hereby generally and
unconditionally authorised in accordance with Section 551
of the Companies Act 2006 (the “Act”) to exercise all the
powers of the Company to allot shares in the Company or
to grant rights to subscribe for or to convert any securities
into shares in the Company (“relevant securities”) up to an
aggregate nominal amount of £1,620,494 (approximately
10% of the aggregate nominal amount of the issued share
capital of the Company (including Treasury shares) as at 5
November 2025) and so that the Directors may impose any
limits or restrictions and make any arrangements which they
consider necessary or appropriate to deal with Treasury
shares, fractional entitlements, record dates, legal, regulatory
or practical problems in, or under the laws of, any territory or
any other matter, such authority to expire at the conclusion of
the next Annual General Meeting (“AGM”) of the Company
or the date 15 months after the passing of this resolution,
whichever is the earlier, but so that this authority shall allow
the Company to make offers or agreements before the
expiry of this authority which would or might require relevant
securities to be allotted after such expiry as if the authority
conferred by this resolution had not expired. All previous
unexpired authorities are revoked, but without prejudice to
any allotment of shares or grant of rights already made,
offered or agreed to be made pursuant to such authorities.
12.
THAT, subject to the passing of Resolution 11, as set out
above, the Directors be and they are hereby authorised,
pursuant to Sections 570-573 of the Act to allot equity
securities (as defined in Section 560 of the Act) for cash
pursuant to the authority given by the said Resolution 11
and/or to sell ordinary shares held by the Company as
Treasury shares for cash, as if Section 561 of the Act did not
apply to any such allotment or sale, provided that this power
shall be limited:
a) to the allotment of equity securities or sale of Treasury
shares up to an aggregate nominal amount of
£1,620,494 (approximately 10% of the aggregate
nominal amount of the issued share capital of the
Company (including Treasury shares) as at 5 November
2025); and
b) by the condition that allotments of equity securities or
sales of Treasury shares may only be made pursuant
to this authority at a price of not less than the NAV per
ordinary share,
and this power shall expire at the conclusion of the next
AGM of the Company or the date 15 months after the
passing of this Resolution, whichever is the earlier, save
that this authority shall allow the Company to make offers
or agreements before the expiry of this authority, and the
Directors may allot equity securities in relation to such an
offer or agreement as if the authority conferred by this
Resolution had not expired.
Notice of Meeting
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Authority to Repurchase Ordinary Shares
Resolution 13 is a special resolution which, if approved, will
renew the Company’s authority to purchase up to 14.99% of
the number of ordinary shares in issue (excluding Treasury
shares) on 5 November 2025 either for immediate cancellation
or for retention as Treasury shares, at the determination of the
Board. Once shares are held In Treasury, the Directors may
only dispose of them in accordance with the relevant legislation
by subsequently selling the shares for cash or cancelling the
shares. Purchases of ordinary shares will be at the discretion
of the Board and within guidelines set from time to time by the
Board in the light of prevailing market conditions. Purchases will
only be made in the market at prices below the prevailing NAV
per ordinary share, thereby resulting in an increased NAV per
ordinary share.
13. THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701
of the Companies Act 2006 (the “Act”) to make market
purchases (within the meaning of Section 693 of the Act) of
ordinary shares of 5 pence each (“the shares”) in the capital
of the Company provided that:
a) the maximum number of shares hereby authorised to be
purchased shall be 48,425,000;
b) the minimum price which may be paid for a share is
5 pence;
c) the maximum price (excluding expenses) which may be
paid for each share is the higher of:
i) 5% above the average of the middle market
quotations for the shares as derived from the
London Stock Exchange Official List for the five
business days immediately preceding the day of
purchase; and
ii) the higher of the price of the last independent
trade and the highest current independent
purchase bid on the London Stock Exchange at the
time the purchase is carried out;
d) the authority hereby conferred shall expire at the
conclusion of the next AGM of the Company or the date
15 months after the passing of this resolution, whichever
is earlier, unless such authority is renewed prior to such
time; and
e) the Company may make a contract to purchase shares
under the authority hereby conferred prior to the expiry
of such authority which will or may be executed wholly
or partly after the expiration of such authority and
may make a purchase of shares pursuant to any such
contract.
Continuation of the Company
Resolution 14 is an ordinary resolution that relates to the
continuation of the Company.
14. THAT the Company continues to carry on business as an
investment trust.
Adoption of New Articles of Association
Resolution 15 is a special resolution that relates to the adoption
of new Articles of Association by the Company to make changes
in relation to Directors’ fees, the period for submitting proposals
to members following a continuation vote and other clarificatory,
administrative and technical changes, as described further in the
Directors’ Report on pages 37 and 38.
15. THAT with effect from the passing of this resolution, the draft
Articles of Association produced to the meeting and, for
the purpose of identification, initialled by the Chairman, be
adopted as the Articles of Association of the Company in
substitution for, and to the exclusion of, the existing Articles of
Association of the Company.
By Order of the Board
FIL Investments International
Secretary
5 November 2025
Notes to the Notice of Meeting:
1. A member of the Company entitled to attend and vote at
the Annual General Meeting may appoint a proxy or proxies
to attend and to speak and vote instead of him. A member
may appoint more than one proxy in relation to the Annual
General Meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares
held by that member. A proxy need not be a member of
the Company. To appoint a proxy via the Investor Centre
at https://uk.investorcentre.mpms.mufg.com/, you will
need to log in to your Investor Centre account or register if
you have not previously done so. To register you will need
your Investor Code which can be found on your Form of
Proxy. Alternatively, shareholders can vote via the Investor
Centre app, which is a free app for smartphone and tablet
provided by MUFG Corporate Markets (the company’s
Registrar). It allows you to securely manage and monitor
your shareholdings in real time, take part in online voting,
keep your details up to date, access a range of information
including payment history and much more. The app is
available to download on both the Apple App Store and
Google Play, or by scanning the relevant QR code below.
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Notice of Meeting continued
2. A Form of Proxy is enclosed and must be returned to the
Registrar at the address on the form to arrive not later than
11:00 on Tuesday, 9 December 2025. Completion and return
of the form of proxy will not prevent a shareholder from
subsequently attending the meeting and voting in person if
they so wish.
3. To be effective, the instrument appointing a proxy, and
any power of attorney or other authority under which it is
signed (or a copy of any such authority certified notarially
or in some other way approved by the Directors), must
be deposited with the Company’s Registrar, PXS 1,
MUFG Corporate Markets, Central Square, 29 Wellington
Street, Leeds LS1 4DL not less than 48 hours before the time
for holding the meeting or adjourned meeting or, in the case
of a poll taken more than 48 hours after it is demanded, not
less than 24 hours before the time appointed for the taking
of the poll at which it is to be used (in each case excluding
non-business days).
4. In the case of joint holders, the vote of the senior who
tenders the vote shall be accepted to the exclusion of the
votes of the other joint holders and for this purpose, seniority
shall be determined by the order in which the names stand
in the Register of Members.
5. To appoint a proxy or to give or amend an instruction to
a previously appointed proxy via the CREST system, the
CREST message must be received by the issuer’s agent
RA10 by 11:00 on Tuesday, 9 December 2025. For this
purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by
the CREST Applications Host) from which the issuer’s agent
is able to retrieve the message. After this time, any change
of instructions to a proxy appointed through CREST should
be communicated to the proxy by other means. CREST
Personal Members or other CREST sponsored members and
those CREST Members who have appointed voting service
provider(s) should contact their CREST sponsor or voting
service provider(s) for assistance with appointing proxies
via CREST. For further information on CREST procedures,
limitations and systems timings please refer to the CREST
Manual. We may treat as invalid a proxy appointment sent
by CREST in the circumstances set out in Regulation 35(5)
of the Uncertificated Securities Regulations 2001. In any
case your proxy form must be received by the Company’s
Registrar no later than 11:00 on Tuesday, 9 December 2025.
6. Proxymity Voting – If you are an institutional investor, you
may also be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed
by the Company and approved by the Registrar. For
further information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged by no later
than 11:00 on Tuesday, 9 December 2025 in order to be
considered valid or, if the meeting is adjourned, by the time
which is 48 hours before the time of the adjourned meeting.
Before you can appoint a proxy via this process, you will
need to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully as you
will be bound by them and they will govern the electronic
appointment of your proxy. An electronic proxy appointment
via the Proxymity platform may be revoked completely
by sending an authenticated message via the platform
instructing the removal of your proxy vote.
7. Unless otherwise indicated on the Form of Proxy, CREST,
Proxymity or any other electronic voting instruction, the proxy
will vote as they think fit or, at their discretion, withhold from
voting.
8. All members are entitled to attend and vote at the AGM
and ask questions. The right to vote at the meeting will
be determined by reference to the Register of Members
as at close of business on Tuesday, 9 December 2025.
Shareholders are urged to vote using the proxy form
provided or electronically where permitted by your nominee
or platform provided or electronically where permitted by
your nominee or platform.
9. The Company is pleased to be able to offer facilities for
shareholders to attend, ask questions and vote at the AGM
electronically in real time should they wish to do so. The
details are set out below.
In order to join the AGM electronically and to vote and
ask questions via the platform, shareholders will need to
connect to the following site https://meetings.lumiconnect.
com/100-720-059-199. Lumi is available as a mobile web
client, compatible with the latest browser versions of Chrome,
Firefox, Edge and Safari and can be accessed using any web
browser on a tablet, smartphone or computer.
Once you have accessed https://meetings.lumiconnect.
com/100-720-059-199 from your device, you will be prompted
to enter your unique 11 digit Investor Code (“IVC”) including
any leading zeros and ‘PIN’. Your PIN is the last 4 digits of
your IVC. This will authenticate you as a shareholder.
Your IVC can be found on your share certificate or as
detailed on your proxy form. You can also obtain this by
contacting MUFG Corporate Markets, our Registrar, by
calling +44 (0) 371 277 1020*
Access to the AGM will be available from 30 minutes before
the meeting start time, although the voting functionality will
not be enabled until the Chairman of the meeting declares
the poll open. During the AGM, you must ensure you are
connected to the internet at all times in order to vote when
Chairman commences polling on the Resolutions. Therefore,
it is your responsibility to ensure connectivity for the duration
of the AGM via your wi-fi. A user guide to the Lumi platform
available on the Company’s pages of the Manager’s
website at: www.fidelity.co.uk/specialvalues.
If you wish to appoint a proxy other than the Chairman of
the meeting and for them to attend the virtual meeting on
your behalf, please submit your proxy appointment in the
usual way before contacting MUFG Corporate Markets on
+44 (0) 371 277 1020* in order to obtain their IVC and PIN. It
is suggested that you do this as soon as possible and at least
48 hours (excluding non-business days) before the meeting.
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
If your shares are held within a nominee/platform and
you wish to attend the electronic meeting, you will need to
contact your nominee as soon as possible. Your nominee
will need to present a corporate letter of representation to
MUFG Corporate Markets, the Registrar, as soon as possible
and at least 72 hours (excluding non-business days) before
the meeting, in order that they can obtain for you your
unique IVC and PIN to enable you to attend the electronic
meeting.
If you are unable to obtain a unique IVC and PIN from
your nominee or platform, we will also welcome online
participation as a guest. Once you have accessed
https://meetings.lumiconnect.com/100-720-059-199 from
your web browser on a tablet, smartphone or computer, you
should then select the ‘Guest Access’ option before entering
your name and who you are representing, if applicable. This
will allow you to view the meeting and ask questions, but you
will not be able to vote.
* Lines are open from 09:00 to 17:30 Monday to Friday, excluding public holidays
in England and Wales. Calls are charged at the standard geographic rate and
will vary by provider. Calls outside the UK will be charged at the applicable
international rate.
10. Any person to whom this notice is sent who is a person
nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under
an agreement between him and the member by whom he
was nominated, have a right to be appointed (or to have
someone else appointed) as a proxy for the meeting. If a
Nominated Person has no such proxy appointment right
or does not wish to exercise it, he may, under any such
agreement, have a right to give instructions to the member
as to the exercise of voting rights. The statement of the rights
of members in relation to the appointment of proxies in
Note 1 above does not apply to Nominated Persons. The
right described in that paragraph can only be exercised by
members of the Company.
11.
If the Chairman, as a result of any proxy appointments, is
given discretion as to how the votes which are the subject
of those proxies are cast and the voting rights in respect
of those discretionary proxies, when added to the interests
in the Company’s securities already held by the Chairman,
result in the Chairman holding such number of voting rights
that he has a notifiable obligation under the Disclosure and
Transparency Rules, the Chairman will make the necessary
notifications to the Company and the Financial Conduct
Authority. As a result, any member holding 3% or more of
the voting rights in the Company who grants the Chairman a
discretionary proxy in respect of some or all of those voting
rights and so would otherwise have a notification obligation
under the Disclosure and Transparency Rules, need not make
separate notification to the Company and the Financial
Conduct Authority.
12.
Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, the Company has specified that to be
entitled to attend and vote at the AGM (and for the purpose
of determining the number of votes they may cast), members
must be entered on the Register of Members by close of
business on Tuesday, 9 December 2025. If the meeting is
adjourned then, to be so entitled, members must be entered
on the Register of Members by close of business two days
before the time fixed for the adjourned meeting, or, if the
Company gives notice of the adjourned meeting, at any
other time specified in that notice.
13.
As at 5 November 2025 (the latest practicable date prior
to the publication of this document), the Company’s issued
share capital consisted of 324,098,920 ordinary shares
carrying one vote each. There were 1,050,000 ordinary
shares held by the Company in Treasury, therefore, the total
number of shares with voting rights in the Company was
323,048,920.
14. Any corporation which is a member can appoint one or
more corporate representative who may exercise on its
behalf all of its powers as a member provided that they do
not do so in relation to the same shares.
15. Shareholders and any proxies or representatives they
appoint understand that by attending the meeting they
are expressly agreeing that they are willing to receive any
communications, including communications relating to the
Company’s securities, made at the meeting.
16. It is possible that, pursuant to requests made by members of
the Company under Section 527 of the Companies Act 2006,
the Company may be required to publish on its website a
statement setting out any matter relating to the audit of the
Company’s accounts (including the Auditor’s report and the
conduct of the audit) that is to be laid before the AGM or
any circumstance connected with an Auditor of the Company
ceasing to hold office since the previous meeting at which
the Annual Report and Financial Statements were laid. The
Company may not require the shareholders requesting any
such website publication to pay its expenses in complying
with such requests. Where the Company is required to
place a statement on a website under Section 527 of the
Companies Act 2006, it must forward the statement to the
Company’s Auditor not later than the time when it makes
the statement available on the website. The business which
may be dealt with at the AGM includes any statement that
the Company has been required under Section 527 of the
Companies Act 2006 to publish on its website.
17.
No Director has a service contract with the Company.
18 A copy of this notice and other information required by
Section 311A of the Companies Act 2006 is published on the
Company’s website at www.fidelity.co.uk/specialvalues.
Registered office: Beech Gate, Millfield Lane, Lower Kingswood,
Tadworth, Surrey KT20 6RP.
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Investing in Fidelity Special Values PLC
Fidelity Special Values PLC is a company listed on the London
Stock Exchange and you can buy its shares through a platform,
stockbroker, share shop or bank. Fidelity also offers a range of
options, so that you can invest in the way that is best for you.
Details of how to invest and the latest Key Information Document
can be found on the Company’s pages on the Manager’s
website at www.fidelity.co.uk/specialvalues.
CONTACT INFORMATION
Shareholders and Fidelity’s Platform Investors should contact the
appropriate administrator using the contact details given below
and on the next page. Links to the websites of major platforms
can be found online at www.fidelity.co.uk/its.
Shareholders on the main share register
Contact MUFG Corporate Markets, Registrar to Fidelity Special
Values PLC, Central Square, 29 Wellington Street, Leeds LS1 4DL.
Email: shareholderenquiries@cm.mpms.mufg.com
Telephone: +44 (0) 371 664 0300 (calls are charged at the
standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable
international rate. Lines are open 9:00 – 17:30, Monday to Friday,
excluding public holidays in England and Wales).
Details of individual shareholdings and other information
can also be obtained from the Registrar’s Investor Centre at
https://uk.investorcentre.mpms.mufg.com/. Shareholders are
able to manage their shareholding online by registering for
the Investor Centre, a free and secure online service. Facilities
include:
Account Enquiry – Shareholders can access their personal
shareholding, including share transaction history, dividend
payment history and obtain an up-to-date shareholding valuation.
Amendment of Standing Data – Shareholders can change their
registered postal address and add, change or delete dividend
mandate instructions. Shareholders can also download forms
such as change of address, stock transfer and dividend mandate
forms as well as buy and sell shares in the Company.
Should you have any queries in respect of the Investor Centre,
contact the helpline on +44 (0) 371 664 0300 (calls are charged
at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable
international rate. Lines are open 9:00 –
17:30, Monday to Friday
excluding public holidays in England and Wales).
Fidelity Platform Investors
Contact Fidelity, using the freephone numbers given below, or by
writing to: UK Customer Service, Fidelity, PO Box 391, Tadworth
KT20 9FU.
Website: www.fidelity.co.uk
Private investors: call free on 0800 41 41 10, 9:00 – 18:00,
Monday to Saturday.
Financial advisers: call free on 0800 41 41 81, 8:00 – 18:00,
Monday to Friday.
General Enquiries
General enquiries should be made to the Secretary, at the
Company’s registered office: FIL Investments International,
Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood,
Tadworth, Surrey KT20 6RP.
Telephone: 01737 836347
Email: investmenttrusts@fil.com
Website: www.fidelity.co.uk/its
If you hold Fidelity Special Values PLC shares in an account
provided by Fidelity International, you will receive a report every
six months detailing all of your transactions and the value of your
shares.
ShareGift
You may donate your shares to charity free of charge through
ShareGift. Further details are available at www.sharegift.org.uk.
Shareholder Information
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Managers and Advisors
Alternative Investment Fund Manager
(the AIFM/Manager)
FIL Investment Services (UK) Limited
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP
Investment Manager, Secretary and
Registered Office
FIL Investments International
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP
Email: investmenttrusts@fil.com
Banker and Custodian
JPMorgan Chase Bank (London Branch)
125 London Wall
London
EC2Y 5AJ
Depositary
J.P. Morgan Europe Limited
25 Bank Street
London
E14 5JP
Financial Adviser and Stockbroker
Winterflood Securities
Riverbank House
2 Swan Lane
London
EC4R 3GA
Independent Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Lawyer
Simmons and Simmons LLP
1 Ropemaker Street
London
EC2Y 9SS
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
Company Information
The Company was launched on 17 November 1994. The original
subscription price was £1 for each ordinary share of 25 pence
each. Following the sub-division of ordinary shares on a five for
one basis on 29 June 2015, the Company’s share capital now
comprises ordinary shares of 5 pence each and the restated
original subscription price is 20 pence for each ordinary share.
The Company is a member of The Association of Investment
Companies (the “AIC”) from whom general information on
investment trusts can be obtained by telephoning 020 7282 5555
(email: enquiries@theaic.co.uk).
Price Information
The share price of Fidelity Special Values PLC is published
daily in the Financial Times under the heading “Investment
Companies”. It is also published in The Times and The Daily
Telegraph. Price and performance information is also available
at: www.fidelity.co.uk/specialvalues
Investors can also obtain current price information by telephoning
Fidelity for free on 0800 41 41 10 or FT Cityline on 0905 817 1690
(voice activated service) (calls charged at 60p per minute on
a per second basis from a BT landline. Charges from other
telephone networks may vary). The Reuters code for Fidelity
Special Values PLC is FSV.L, the SEDOL is BWXC7Y9 and the ISIN
is GB00BWXC7Y93.
Net Asset Value (“NAV”) Information
The Company’s NAV is calculated and released to the London
Stock Exchange on a daily basis.
UK Capital Gains Tax
All UK individuals under present legislation are permitted to
have £3,000 of capital gains in the current tax year 2025/2026
(2024/2025: £3,000) before being liable for capital gains tax.
Capital gains tax is charged at 10% and 20% dependent on the
total amount of taxable income.
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General Data Protection Regulation (“GDPR”)
What personal data is collected and how it is used
The Company is an investment trust which is a public limited company and has certain regulatory obligations such as the
requirement to send documents to its shareholders, for example, the Annual Report and other documents that relate to meetings
of the Company. The Company will, therefore, collect shareholders’ personal data such as names, addresses and identification
numbers or investor codes and will use this personal data to fulfil its statutory obligations.
Any personal data collected will be kept securely on computer systems and in some circumstances on paper. Personal information
is kept secure in line with Fidelity’s Information Security policies and standards. If you are unhappy with how we have used your
personal data, you can complain by contacting the UK Data Protection Officer at Fidelity International, Beech Gate, Millfield Lane,
Lower Kingswood, Tadworth, Surrey KT20 6RP.
Sharing personal data
In order to assist the Company in meeting its statutory requirements, the Company delegates certain duties around the processing
of this data to its third party service providers, such as the Company’s Registrar and Printers. The Company has appointed Fidelity
to undertake marketing activities for the Company and their privacy statement can be found on the Company website at
https://investment-trusts.fidelity.co.uk/security-privacy/
The Company’s agreements with the third party service providers have been updated to be compliant with GDPR requirements.
The Company confirms to its shareholders that their data will not be shared with any third party for any other purpose, such as for
marketing purposes. In some circumstances, it may be necessary to transfer shareholders’ personal data across national borders
to Fidelity Group entities operating in the European Economic Area (“EEA”). Where this does occur, the European standard of
protections will be applied to the personal data that is processed. Where personal data is transferred within the Fidelity group but
outside of the EEA, that data will subsequently receive the same degree of protection as it would in the EEA.
Retention period
Personal data will be kept for as long as is necessary for these purposes and no longer than legally permitted to do so.
Requesting access, making changes to personal data and other important information
Shareholders can access the information that the Company holds about them or ask for it to be corrected or deleted by contacting
Fidelity’s UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Fair treatment of investors
The legal and regulatory regime to which the Company and the Directors are subject ensures the fair treatment of investors. The
Listing Rules require that the Company treats all shareholders of the same class of shares equally. In particular, the Directors have
certain statutory duties under the Companies Act 2006 with which they must comply. These include a duty upon each Director to
act in the way she or he considers, in good faith, would be most likely to promote the success of the Company for the benefit of its
members as a whole.
Data Protection
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
In compliance with the Alternative Investment Fund Managers Directive (“AIFMD”), the Board has appointed FIL Investment Services
(UK) Limited (“FISL”) as the Company’s Alternative Investment Fund Manager (“AIFM”). FISL has delegated the portfolio management
of assets and company secretarial function to FIL Investments International. Details of the Management Agreement can be found in
the Directors’ Report on page 34.
The table below discloses information required by the Alternative Investment Fund Managers Regulations 2013.
Function AIFM Role and Responsibility AIFMD Disclosure
Investment
management
The AIFM provides portfolio management of
assets and investment advice in relation to the
assets of the Company. It has delegated this
function to FIL Investments International.
The Board remains responsible for setting the
investment strategy, investment policy and
investment guidelines and the AIFM operates
within these guidelines.
Details of the Company’s investment objective, policy
and strategy, including investment limits, are on
pages 23 and 24.
Risk
management
The AIFM has a responsibility for risk
management for the Company which is in
addition to the Board’s corporate governance
responsibility for risk management.
The Company has a Risk Management
Process Document which demonstrates that
risk management is separated functionally
and hierarchically from operating units and
demonstrates independence safeguards. The
Manager maintains adequate risk management
systems in order to identify, measure and monitor
all risks at least annually under the AIFMD. The
Manager is responsible for the implementation
of various risk activities such as risk systems, risk
profile, risk limits and testing.
The Board, as part of UK corporate governance,
remains responsible for the identification of
significant risks and for the ongoing review of the
Company’s risk management and internal control
processes.
The AIFM has an ongoing process for identifying,
evaluating and managing the principal risks faced
by the Company and this is regularly reviewed
by the Board. The Board remains responsible for
the Company’s system of risk management and
internal controls and for reviewing its effectiveness.
Further details can be found in the Strategic Report
on pages 25 to 29 and in Note 17 to the Financial
Statements on pages 72 to 78.
Valuation of
illiquid assets
The AIFMD requires the disclosure of the
percentage of the Alternative Investment Fund’s
assets which are subject to special arrangements
arising from their illiquid nature and any new
arrangements for managing the liquidity of the
Company.
As at the date of this report, none of the Company’s
assets were subject to special arrangements arising
from their illiquid nature.
Alternative Investment Fund Manager’s
Disclosure
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Function AIFM Role and Responsibility AIFMD Disclosure
Leverage
The Company uses leverage to increase its
exposure primarily to UK companies and currently
holds derivative instruments. The AIFM has set
maximum levels of leverage that are reasonable.
It has implemented systems to calculate and
monitor compliance against these limits and has
ensured that the limits have been complied with
at all times.
There are two methods of calculating leverage
– the Gross Method which does not reduce
exposure for hedging; and the Commitment
Method which does reduce exposure for hedging.
The maximum leverage limits are 1.80 for the Gross
Method of calculating leverage and 1.50 for the
Commitment Method.
At 31 August 2025, actual leverage was 1.13 for the
Gross Method and 1.14 for the Commitment Method.
Liquidity
management
The AIFM, in consultation with the Board,
maintains a liquidity management policy which is
considered at least annually.
No new arrangements for managing the liquidity of
the Company have been made. Further details can
be found in Note 17 on page 75.
Remuneration
of the AIFM
The AIFM operates under the terms of Fidelity
International’s Global Remuneration Policy
Statement. This ensures that the AIFM complies
with the requirements of the FCA’s Remuneration
Code (SYSC19A); the AIFM Remuneration Code
(SYSC19B); and the BIPRU Remuneration Code
(SYSC19C).
Details of Fidelity International’s Global Remuneration
Policy can be found at www.fidelityinternational.
com/global/remuneration/default.page
EU Securities Financing Transactions Regulations (“SFTR”)
The following disclosures relate to contracts for difference (“CFDs”) held by the Company which may be considered Total Return Swaps
under the SFTR, which came into force on 12 January 2016.
As at 31 August 2025, all CFDs were contracted bilaterally with open maturities:
Broker
Fair Value
£’000
Percentage of
Net Assets
Collateral
held by the
Broker
£’000
Collateral
held by the
Company
£’000
Goldman Sachs International (UK) (103) (0.01%) 260 –
HSBC Bank plc (UK) (377) (0.03%) 140 –
J.P. Morgan plc (UK) (842) (0.07%) – 260
Morgan Stanley & Co International plc (UK) 25 0.00% – –
UBS AG (UK) (1,020) (0.08%) – 1,040
Collateral held by the broker was held in a segregated account on behalf of the Company with a maturity of one day. The total return
for the year ended 31 August 2025 from CFDs was a gain of £2,663,000.
Alternative Investment Fund Manager’s
Disclosure
continued
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
AAF Report
A report prepared in accordance with the Audit and Assurance
Faculty guidance issued by the Institute of Chartered Accountants
in England and Wales.
AIC
The Association of Investment Companies (“AIC”). The Company
is a member of the AIC.
AIF
Alternative Investment Fund (“AIF”). The Company is an AIF.
AIFM
Alternative Investment Fund Manager (“AIFM”). The Board has
appointed FIL Investment Services (UK) Limited to act as the
Company’s
AIFM (the Manager).
AIFMD
The Alternative Investment Fund Managers Directive (“AIFMD”) is
a European Union Directive implemented on 22 July 2014.
Alternative Performance Measures
The Company uses the following Alternative Performance
Measures which are all defined in this Glossary of Terms:
• Discount/Premium;
• Gearing;
• Net Asset Value (NAV) per Ordinary Share;
• Ongoing Charges;
• Revenue, Capital and Total Returns; and
• Total Return Performance (Net Asset Value Total Return or
Ordinary Share Price Total Return).
Asset Exposure
The value of an underlying security or instrument to which
the Company is exposed, whether through direct or indirect
investment (including the economic value of the exposure to the
underlying asset of derivatives).
Benchmark
FTSE All-Share Index against which the performance of the
Company is measured.
Block Listing
A facility that allows the Company to issue new ordinary shares
to meet demand in the market over a period of time.
Capital Gains Tax (CGT)
The tax you may have to pay if you sell your shares at a profit.
Collateral
Asset provided as security for the unrealised gain or loss under a
contract for difference.
Contract For Difference (CFD)
A contract for difference is a derivative. It is a contract between
the Company and an investment house at the end of which the
parties exchange the difference between the opening price and
the closing price of an underlying asset of the specified financial
instrument. It does not involve the Company buying or selling the
underlying asset, only agreeing to receive or pay the movement
in its share price. A contract for difference allows the Company
to gain access to the movement in the share price by depositing
a small amount of cash known as collateral. The Company may
reason that the asset price will rise, by buying (“long” position)
or fall, by selling (“short” position). If the Company holds long
positions, dividends are received and interest is paid. If the
Company holds short positions, dividends are paid and interest
is received.
Custodian
An entity that holds (as intermediary) the Company’s assets,
arranges the settlement of transactions and administers income,
proxy voting and corporate actions. The Company’s Custodian is
JPMorgan Chase Bank.
Corporation Tax
The UK tax the Company may have to pay on its profits. As
an investment trust company, the Company is exempt from UK
corporation tax on its capital gains and does not pay tax on any
UK dividends. It can also offset expenses against any taxable
income, and consequently it is tax efficient for the Company.
Depositary
An entity that oversees the custody, cash arrangements and other
AIFM responsibilities of the Company. J.P.Morgan Europe Limited
act as the Company’s Depositary.
Derivatives
Financial instruments (such as futures, options and contracts
for difference) whose value is derived from the value of an
underlying asset or other financial instrument.
Discount
If the share price of the Company is lower than the net asset
value per ordinary share, the Company is said to be trading at a
discount. The discount is shown as a percentage of the net asset
value per ordinary share.
Fair Value
The fair value is the best measure of the realisable value of
the investments, including derivatives, at a point in time and is
measured as:
•
Listed and AIM quoted investments – valued at bid prices
or last market prices as available, otherwise at published
price quotations;
• Unlisted investments – valued using an appropriate
valuation technique in the absence of an active market;
• Contracts for difference – valued as the difference
between the settlement price of the contract and the value
of the underlying shares in the contract (unrealised gains or
losses); and
Glossary of Terms
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Glossary of Terms continued
• Futures and options – valued at the quoted trade price for
the contract.
Fidelity International (Fidelity)
FIL Limited and its subsidiary group companies including FIL
Investment Services (UK) Limited and FIL Investments International
which act as AIFM, Secretary and Investment Manager.
Future
An agreement to buy or sell a fixed amount of an asset at a fixed
future date and a fixed price.
Gearing
The economic exposure of the portfolio to its underlying assets in
excess of total net assets. It represents the additional exposure to
the market above
Shareholders’ Funds. The Company uses two
measures of gearing (Gross Gearing and Net Gearing).
Gross Asset Exposure
The value of the portfolio to which the Company is exposed,
whether through direct or indirect investment (including the
economic value of the exposure to the underlying asset of the
derivatives). It is the sum total of all Asset Exposures.
Gross Gearing
The amount by which Gross Asset Exposure exceeds
Shareholders’ Funds, expressed as a percentage of Shareholders’
Funds.
Hedging
A strategy aimed at minimising or eliminating the risk of loss
through adverse movements normally involving taking a position
in a derivative such as a future or an option.
Investment Manager
FIL Investments International.
Manager
FIL Investment Services (UK) Limited is the appointed Manager
under the
AIFMD and has delegated the portfolio management
of assets to the Investment Manager.
Net Assets or Net Asset Value (NAV)
Also described as “Shareholders’ Funds”, net assets represent
the total value of the Company’s assets less the total value of its
liabilities. For valuation purposes it is common to express the
net
asset value
on a per ordinary share basis.
Net Asset Value per Ordinary Share
The net asset value divided by the number of ordinary shares in
issue.
Net Gearing
The amount by which Net Market Exposure exceeds
Shareholders’ Funds, expressed as a percentage of Shareholders’
Funds
.
Net Market Exposure
Net Market Exposure is the total of all long exposures, less short
exposures and less exposures hedging the portfolio.
Ongoing Charges
Total operational expense (excluding finance costs and taxation)
incurred by the Company as a percentage of the average daily
net asset values for the reporting year.
Options
An option is a contract which gives the right but not the
obligation to buy or sell an underlying asset at an agreed price
on or before an agreed date. Options may be calls (buy) or puts
(sell) and are used to gain or reduce exposure to the underlying
asset on a conditional basis.
Portfolio Manager
Alex Wright is the appointed Portfolio Manager of the Company
and is responsible for managing the Company’s assets.
Pre-Emption Rights
Section 561 of the Companies Act 2006 provides that a company
offering a new issue of shares must first make an offer of these
shares, on the same or more favourable terms, in proportion
to the nominal value held to existing Shareholders. At each
Annual General Meeting, the Board seeks Shareholder approval
to disapply pre-emption rights provision, up to 10% of the
Company’s issued share capital.
Premium
If the share price of the Company is higher than the net asset
value per ordinary share, the Company’s shares are said to be
trading at a premium. The premium is shown as a percentage of
the net asset value per ordinary share.
Registrar
An entity that manages the Company’s Shareholder register.
The Company’s Registrar is MUFG Corporate Markets (name
changed from Link Group on 20 January 2025).
Reserves
•
Share premium account represents the amount by
which the proceeds from the issue of ordinary shares
has exceeded the cost of those ordinary shares. It is not
distributable by way of dividends and it cannot be used to
fund share repurchases.
• Capital redemption reserve maintains the equity share
capital of the Company and represents the nominal value
of shares repurchased and cancelled. It is not distributable
by way of dividends and it cannot be used to fund share
repurchases.
• Other non-distributable reserve represents amounts
transferred from the warrant reserve. It is not distributable
by way of dividends and it cannot be used to fund share
repurchases.
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
• Capital reserve represents realised gains or losses on
investments and derivatives sold, unrealised increases and
decreases in the fair value of investments and derivatives
held and other income and costs recognised in the capital
column of the Income Statement. It can be used to fund
repurchases and issuance of shares from Treasury and it is
distributable by way of dividends.
• Revenue reserve represents retained revenue surpluses
recognised through the revenue column of the Income
Statement. It is distributable by way of dividends.
Return
The return generated in a given period from investments:
• Revenue Return reflects the dividends and interest from
investments and other income net of expenses, finance costs
and taxation;
• Capital Return reflects the gains and losses on investments
and derivative instruments, including foreign exchange
related gains and losses;
• Total Return reflects the aggregate of revenue and capital
returns.
Shareholders’ Funds
Shareholders’ Funds are also described as net asset value and
represent the total value of the Company’s assets less the total
value of its liabilities as shown in the balance sheet.
Total Return Performance
The return on the share price or net asset value per ordinary
share taking into account the rise and fall of share prices and the
dividends paid to shareholders. Any dividends received by the
shareholder are assumed to have been reinvested for additional
shares (for share price total return) or in the Company’s assets
(for net asset value total return).
Treasury Shares
Ordinary shares of the Company that have been repurchased
by the Company and not cancelled but held in Treasury. These
shares do not receive dividends, have no voting rights and are
excluded from the
net asset value per ordinary share calculation.
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