Final Results
September 24 2003 - 11:18AM
UK Regulatory
FIDELITY ASIAN VALUES PLC
Preliminary Announcement of Unaudited Results
for the year ended 31 July 2003
CHAIRMAN'S STATEMENT
Performance and Markets
Although the second half showed some recovery, the past year has again been a
difficult one for the Company. Economic news from the United States and other
major developed countries was mixed at best. The global investment environment
remained volatile. For much of the period, confidence and markets were weakened
by concerns over the international security situation, notably in Iraq, but
also over Palestine, North Korea and the continuing threat of terrorism. In the
Far East and South East Asian region, the outbreak of the SARS epidemic in the
Spring of 2003 had a disproportionate impact, causing some short-term
disruption to domestic consumption and the tourism industry and preventing the
regional markets from taking full advantage of the rebound in the US and
European markets triggered by the military victory in Iraq in April.
Fortunately, the spread of the SARS virus was checked and regional markets
began to recover from late May onwards as international investors took on a
more aggressive risk appetite.
The net asset value of the Company fell by 3.0% in the year to 31 July 2003.
The MSCI All Countries (Combined) Far East Free ex Japan Index (expressed in
sterling and on a total return basis) gained 3.2% over the same period. This
underperformance was largely due to the Korean stocks held in the portfolio. In
the year to 31 July 2003 the share price fell by 4.6% and the discount to net
asset value widened to 9.55%.
Since the year end the net asset value has increased by 6.8% compared with an
increase of 4.4% in the benchmark index.
Continuation Vote
The average discount for the 12 months to 23 September 2003 was 14.1%. It
follows that there will not be a vote on the continuation of the Company at the
Annual General Meeting this year.
Gearing
The Board continue to believe in gearing as a means of enhancing performance in
the medium to long term. We regularly review the level of the Company's gearing
in the light of short term trends. As at 31 July 2003, gross gearing amounted
to 33.7% of shareholders' funds and net gearing (i.e. after deducting cash
held, including the Company's investment in the Fidelity Institutional Cash
Fund) amounted to 20.4%. At the time of writing gross gearing is 30.8% and net
gearing is 18.6%. Despite the fall in the Company's net asset value in the
period the impact of the gearing was only marginally negative due to the fall
in the value of the loan resulting from the change in the US$ exchange rate.
Outlook
Signs of improvement in the major industrial economies have provided a
favourable backdrop for the economies in the Asia Pacific region. Exports have
picked up and domestic consumption has also shown signs of recovery. However,
serious geopolitical risks continue to overshadow the investment environment.
The worsening security situation in Iraq; the failure so far of the Bush
administration's "roadmap" to make discernable progress in the Middle East
peace process; and the erratic behaviour of the North Korean regime may result
in continuing market volatility. The recent SARS news from Singapore and a
suspected case in Hong Kong appear to be isolated incidents and seem to have
had limited impact on the regional stock markets judging by investors' muted
reaction to these events.
China is probably the most important growth engine for the region. While it
remains a major exporter, the country now consumes a high proportion of the
commodities and semi-finished goods produced in the region. In the past year
China has attracted more inward investment than any other country,
industrialised or developing. Intra-regional trade should continue to benefit
and this should stimulate domestic consumption in other regional economies.
Stronger economic growth provides a good foundation for an increase in
corporate profits, and in recent months many regional companies have announced
better than expected profit results. Share prices continue to be attractively
valued, if not cheap, and should continue to attract international investors.
With improving corporate and economic fundamentals, the Asia Pacific ex Japan
markets offer a wide spectrum of investment opportunities, ranging from
domestic consumption to export trading and global commodities. While good stock
selection will remain the key, your Board believe that equities in the region
continue to offer long-term growth potential for investors.
Annual General Meeting
The AGM is due to take place on 27 November 2003 at Fidelity's London Cannon
Street office at 11.00 am and all shareholders, ISA, PEP and Share Plan
investors are invited to attend. The Investment Manager will be making a
presentation on Asia and the prospects for Fidelity Asian Values.
Sir Victor Garland
Chairman
24 September 2003
Dividend
The Company does not declare a dividend for the year ended 31 July 2003.
Enquiries:
Barbara Powley - Fidelity Investments International
01737 836883
FIDELITY ASIAN VALUES PLC
Statement of Total Return (unaudited)
(incorporating the revenue account) of the Company for the year ended 31 July
2003
2003 2002
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Losses on investments - (1,946) (1,946) - (975) (975)
Income from overseas
dividends 1,891 - 1,891 1,537 - 1,537
Income from overseas
scrip
dividends 4 - 4 3 - 3
Overseas interest 266 - 266 167 - 167
Deposit income 32 - 32 89 - 89
Investment management (705) - (705) (826) - (826)
fee
Other expenses (344) - (344) (303) - (303)
Exchange losses - (95) (95) - (257) (257)
Net return before
finance
costs and taxation 1,144 (2,041) (897) 667 (1,232) (565)
Exchange gains on - 567 567 - 2,007 2,007
loan
Interest payable (1,262) - (1,262) (1,392) - (1,392)
Return on ordinary
activities
before tax (118) (1,474) (1,592) (725) 775 50
Tax on ordinary (214) - (214) (77) - (77)
activities
Return on ordinary
activities
after tax for the
year
attributable to
equity
shareholders (332) (1,474) (1,806) (802) 775 (27)
Return per ordinary
share
Basic and diluted (0.36p) (1.57p) (1.93p) (0.85p) 0.82p (0.03p)
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the year.
Balance Sheet (unaudited)
as at 31 July 2003
2003 2002
�'000 �'000
Fixed assets
Investments 78,736 76,980
Current assets
Debtors - amounts falling due within 276 724
one year
Cash at bank 343 4,547
619 5,271
Creditors - amounts falling due within (555) (1,078)
one year
Net current assets 64 4,193
Total assets less current liabilities 78,800 81,173
Creditors - amounts falling due after
more than one year
Fixed rate unsecured loan (19,870) (20,437)
Total net assets 58,930 60,736
Capital and reserves
Called up share capital 23,376 23,376
Share premium account 7 7
Capital redemption reserve 2,330 2,330
Other reserves
Other reserve 59,282 59,282
Warrant reserve 7,369 7,369
Capital reserve - realised (35,960) (24,016)
Capital reserve - unrealised 4,489 (5,981)
Revenue reserve (1,963) (1,631)
Total equity shareholders' funds 58,930 60,736
Net asset value per ordinary share:
Basic and diluted 63.02p 64.95p
Cash Flow Statement (unaudited)
for the year ended 31 July 2003
2003 2002
�'000 �'000
Operating activities
Investment income received 1,802 1,127
Interest received 301 88
Investment management fees paid (713) (628)
Directors' fees paid (44) (64)
Other cash payments (249) (269)
Net cash inflow from operating 1,097 254
activities
Returns on investments and servicing of
finance
Interest paid (1,258) (1,539)
Net cash outflow from returns on
investments
and servicing of finance (1,258) (1,539)
Taxation
UK income tax recovered - 369
Financial investment
Purchase of investments (54,738) (79,853)
Realised exchange losses (137) (244)
Disposals of investments 50,790 83,572
Net cash (outflow)/inflow from (4,085) 3,475
financial investment
Net cash (outflow)/inflow before (4,246) 2,559
financing
Financing
Repurchase of ordinary shares - (1,398)
6.28% fixed rate unsecured loan drawn - 21,709
down
7.03% fixed rate unsecured loan repaid - (21,709)
Net cash inflow/(outflow) from - (1,398)
financing
(Decrease)/increase in cash (4,246) 1,161
The above statements have been prepared on the basis of the accounting policies
as set out in the most recently published set of annual financial statements.
The figures for the year ended 31 July 2002 have been extracted from the
accounts for the year ended 31 July 2002 which have been delivered to the
Registrar of Companies and on which the Auditors gave an unqualified report.
The annual report and accounts will be posted to shareholders in October 2003
and copies will also be available from the Secretary, Fidelity Investments
International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey
KT20 6RP.
END