Final Results

FIDELITY EUROPEAN VALUES PLC

Preliminary Announcement of Unaudited Results

For the year ended 31 December 2003

Comment from the Chairman

I have pleasure in presenting the annual report of Fidelity European Values PLC
for the year ended 31 December 2003.

Performance

During the first few months of 2003 global stockmarkets fell as the prospects
of a conflict in the Middle East unnerved investors.  However as the war ended
equities rebounded strongly, stimulated by improved investor sentiment, and
subsequently closed the year in positive territory.  During the review period,
the net asset value ('NAV') per share of the Company returned 38.2%, strongly
outperforming the benchmark FTSE World Europe (ex UK) Index, which returned
29.0%.  With regard to performance in the long term, the NAV per share of the
Company has returned 594.4% since launch, significantly outperforming the
benchmark, which has returned 216.1%. The strong relative outperformance was
due to a combination of successful stock selection by the Investment Manager
and the portfolio's gearing, which had a positive impact on the total return of
the NAV.  The shares ended the year trading at a discount of 9.0% to the
underlying asset value per share.  (All figures are in sterling and are on a
total return basis.) 

Gearing

The Board is responsible for the level of gearing in the Company and reviews it
on a regular basis. The Company retained a modest amount of gearing throughout
2003 (15.3% as at the year end), which enhanced the net asset value by 3.6%.
 We believe that gearing will continue to benefit shareholders in the long
term.

Dividend

This year, to enable shareholders through the PEP and ISA schemes to take full
advantage of the tax credit available prior to 5 April 2004, your Board has
decided to pay an interim dividend of 1.50 pence per share (2002:  nil).  There
will be no final dividend payable for the year ending 31 December 2003 (2002:
1.20 pence per share).  The interim dividend will be payable on 31 March 2004
to shareholders on the register at close of business on 30 January 2004
(ex-dividend date 28 January 2004).  Your Board believes very strongly that
total return (income and capital) is the key performance indicator.  We will
not therefore restrict the Investment Manager even if this leads to lower
dividends in future. 

Directorate

Mr David Simpson and Mr Johan Björkman retire by rotation and, being eligible,
have offered themselves for re-election.  Mr Simpson and Mr Björkman are both
valuable Board members, Mr Simpson with his investment experience and Mr
Björkman having a wealth of experience in European markets.  Mr Simon Fraser
continues to serve as a Director of the Company and I believe that there is
value in having a senior member of the Company's Manager who assumes the
responsibility of being a Director of the Company.  All of the other Directors
are totally independent and this provides an appropriate balance.  Following
the amendment to the Listing Rules, Mr Fraser will be subject to annual
re-election by shareholders with effect from 2005.

Due to my tenure on the Board exceeding nine years I will also be subject to
annual re-election going forward and I offer myself for such re-election.  My
fellow Directors have met in my absence for the purpose of considering my
independence.  They have taken note of the AITC Code of Corporate Governance
and concluded that lengthy service on the Board does not of itself compromise
independence.  Indeed they believe that independence is potentially greater due
to experience gained from the length of tenure.  They believe that I behave
independently and wish me to continue as Chairman of the Company.  They are
recommending that I be re-elected as a Director at the forthcoming Annual
General Meeting.

The Board has considered the proposal for the re-election of each of the
above-named Directors and recommends to shareholders that they vote in favour
of the proposals.

Any proposal for a new Director is considered by the whole Board with the
independent Directors taking the lead.  As mentioned in last year's annual
report Mr Simon Duckworth was appointed as a Director of the Company on 24
February 2003.  Simon has a proven track record in private and public service.
He was elected as a Director at the Annual General Meeting in May 2003.

Annual General Meeting

The Annual General Meeting of the Company is due to take place on 7 May 2004 at
midday at Fidelity's offices at 25 Cannon Street(just next to St. Paul's
Cathedral).  Full details of the meeting are given in the annual report and I
look forward to meeting you then.

Outlook

After three years of decline, Continental European equity markets posted a
strong performance during 2003 returning 29.0%, as measured by the FTSE World
Europe (ex UK) Index in local currency terms.  The economic environment in the
region improved over the last six months of 2003, as did investors' renewed
appetite for risk.  Looking ahead the main factors expected to support the
strengthening of the economy are ongoing recoveries in industrial production
and consumer confidence, as well as increased domestic and business demand and
interest rates remaining at a relatively low level.  Set against this,
uncertainties remain in the outlook.  The terrorist attack in Spain on 11 March
2004 serves as a stark and tragic reminder of the continuing threat of global
terrorism.

We continue to believe that stock selection based on in-depth company analysis
is the key in outperforming the index over the coming year.

Appointment of Manager

Following careful consideration and discussion the members of the Management
Engagement Committee have resolved to affirm the continuation of the
appointment of Fidelity Investments International as Manager of the Company as
in their opinion this is in the interests of the shareholders as a whole.  The
performance of the Company has continued to be very good over both the short
and the long term.  Fidelity Investments International also provides a strong
brand, good professional support and efficient management of the PEP, ISA and
Share Plan schemes. 

The Board is aware that management fees and the Company's total expense ratio
are slightly higher than those of its peer group.  However the Board has
concluded that fees at this level are acceptable as good investment performance
is seen as being of the utmost importance.

Robert Walther
16 March 2004
 

Enquiries: Barbara Powley, Fidelity Investments International - 01737 836 883


FIDELITY EUROPEAN VALUES PLC

Statement of Total Return (incorporating the revenue account1) - unaudited

For the year ended 31 December 2003

 

                                                2003                       2002         
                                                                                        
                                       revenue capital   total revenue  capital    total
                                         £'000   £'000   £'000   £'000    £'000    £'000
                                                                                        
Gains/(losses) on investments                - 115,874 115,874       - (25,981) (25,981)
                                                                                        
Dividend income                         11,058       -  11,058   9,582        -    9,582
                                                                                        
Interest income                            177       -     177     356        -      356
                                                                                        
Investment management fee              (4,674)       - (4,674) (4,365)        -  (4,365)
                                                                                        
Other expenses                           (942)       -   (942)   (570)        -    (570)
                                                                                        
Exchange gains                               -     490     490       -      538      538
                                                                                        
Repurchase of shares                         -   (926)   (926)       -    (124)    (124)
                                                                                        
Net return/(loss) before finance costs   5,619 115,438 121,057   5,003 (25,567) (20,564)
and taxation                                                                            
                                                                                        
Interest payable                       (3,283)       - (3,283) (3,018)        -  (3,018)
                                                                                        
Exchange losses on loans                     - (4,974) (4,974)       -  (3,645)  (3,645)
                                                                                        
Return/(loss) on ordinary activities     2,336 110,464 112,800   1,985 (29,212) (27,227)
before tax                                                                              
                                                                                        
Tax on ordinary activities             (1,120)       - (1,120)   (917)        -    (917)
                                                                                        
Return/(loss) on ordinary activities     1,216 110,464 111,680   1,068 (29,212) (28,144)
after tax for the year attributable to                                                  
equity shareholders                                                                     
                                                                                        
Dividend                                 (941)       -   (941)   (759)        -    (759)
                                                                                        
Transfer to/(from) reserves                275 110,464 110,739     309 (29,212) (28,903)
                                                                                        
Return per ordinary share                                                               
                                                                                        
Basic (note 2)                           1.93p 175.56p 177.49p   1.69p (46.32p) (44.63p)
                                                                                        
1.   The revenue column on this statement represents the profit and loss
account of the Company.

2.   Returns per ordinary share are based on the net revenue return on ordinary
activities after taxation of £1,216,000 (2002: £1,068,000), and the capital
appreciation in the year of £110,464,000 (2002: depreciation of £29,212,000)
and on 62,918,844 ordinary shares (2002: 63,072,081), being the weighted
average number of ordinary shares in issue during the year.

      
      All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the year.


FIDELITY EUROPEAN VALUES PLC

Balance Sheet - unaudited as at 31 December 2003

                                                             2003     2002
                                                            £'000    £'000
                                                                          
Fixed assets                                                              
                                                                          
Investments                                               469,500  348,059
                                                                          
Current assets                                                            
                                                                          
Debtors - amounts falling due within one year               7,234    1,552
                                                                          
Cash at bank                                                1,249    8,079
                                                                          
                                                            8,483    9,631
                                                                          
Creditors - amounts falling due within one year           (7,170)  (2,590)
                                                                          
Net current assets                                          1,313    7,041
                                                                          
Total assets less current liabilities                     470,813  355,100
                                                                          
Creditors - amounts falling due after more than one year                  
                                                                          
Fixed rate unsecured loans                               (63,557) (58,583)
                                                                          
Total net assets                                          407,256  296,517
                                                                          
Capital and reserves                                                      
                                                                          
Called up share capital                                    15,725   15,781
                                                                          
Share premium account                                      58,615   58,615
                                                                          
Capital redemption reserve                                    100       44
                                                                          
Capital reserve - realised                                245,461  220,156
                                                                          
Capital reserve - unrealised                               83,589  (1,570)
                                                                          
Revenue reserve                                             3,766    3,491
                                                                          
Total equity shareholders' funds                          407,256  296,517
                                                                          
Net asset value per ordinary share:                                       
                                                                          
Basic                                                     647.43p  469.73p


FIDELITY EUROPEAN VALUES PLC

Cash Flow Statement - unaudited

For the year ended 31 December 2003

 

                                                                     2003      2002
                                                                    £'000     £'000
                                                                               
                                                                                   
Operating activities                                                               
                                                                                   
Investment income received                                          9,397     8,298
                                                                                   
Interest received                                                     185       252
                                                                                   
Investment management fee paid                                    (4,397)   (4,450)
                                                                                   
Directors' fees paid                                                 (26)      (47)
                                                                                   
Other cash payments                                                 (582)     (712)
                                                                                   
Net cash inflow from operating activities                           4,577     3,341
                                                                                   
Returns on investments and servicing of finance                                    
                                                                                   
Interest paid                                                     (3,300)   (3,032)
                                                                                   
Net cash outflow from returns on investments and                  (3,300)   (3,032)
servicing of finance                                                               
                                                                                   
Taxation                                                                           
                                                                                   
Overseas tax recovered                                                194       659
                                                                                   
UK corporation tax paid                                                 -     (381)
                                                                                   
Tax recovered                                                         194       278
                                                                                   
Financial investment                                                               
                                                                                   
Purchases of investments                                        (364,466) (291,770)
                                                                                   
Exchange gains                                                        600       452
                                                                                   
Disposals of investments                                          357,355   287,511
                                                                                   
Net cash outflow from financial investment                        (6,511)   (3,807)
                                                                                   
Equity dividend paid                                                (754)   (1,260)
                                                                                   
Net cash outflow before financing                                 (5,794)   (4,480)
                                                                                   
Financing                                                                          
                                                                                   
Repurchase of ordinary shares                                       (926)     (124)
                                                                                   
Issue of ordinary shares                                                -     1,690
                                                                                   
Repayment of Equity Index-Linked Loan Stock                             -  (26,869)
                                                                                   
Net cash outflow from financing                                     (926)  (25,303)
                                                                                   
Decrease in cash                                                  (6,720)  (29,783)
                                                                                   
The above statements have been prepared on the basis of the accounting policies
as set out in the recently published set of annual financial statements. The
figures for the year to 31 December 2002 have been extracted from the accounts
for the year ended 31 December 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 as soon as is
practicable and in any event no later than 5 April 2004.