RCS - Rockwood Strategic - Results analysis from Kepler Trust Intelligence

Rockwood StrategicAnnouncement

19/11/2025 12:00

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RNS Number : 2087I  Rockwood Strategic PLC  19 November 2025

Rockwood Strategic (RKW)

19/11/2025

Results analysis from Kepler Trust Intelligence

Rockwood Strategic (RKW) has released its interim results for the six-months
ending 30/09/2025. Over the period, RKW's NAV total returns were 12.5%, with a
share price total return of 11.5%. Whilst the trust has no formal benchmark,
comparator indices returned 12.1% and 14.8%.

Over the long term, RKW is significantly ahead of these comparators, having
returned 179.9% in the five years to the period end, versus 91.3% and -11.7%
for the indices.

Vanquis Banking Group was the top performer in the half-year, with shares more
than doubling. Capita Plc was also a positive, with Capital Limited
contributing to performance due to its gold and copper mining exposure. RKW's
NAV was impacted by a write-off in previous holding Argentex.

Manager Richard Staveley made three new investments in the period. One has
risen notably since initial purchase, with another the subject of a takeover
offer during the period. There was one disposal in the period after the
company fulfilled its investment thesis and generated a high IRR.

The trust's premium rating has allowed for share issuance, contributing to NAV
growing 24%.This issuance contributed to an increase in the cash position
although this has since been mostly allocated to a number of portfolio
holdings.

Chairman Noel Lamb noted the strategy's success, stating: "We continue to
grow, due to the attractions of our differentiated strategy, focused team and
best in class returns."

Kepler View

Rockwood Strategic (RKW) has continued to defy the gloom surrounding the UK to
deliver another good set of results. Following on from the blockbuster return
in the previous financial year, manager Richard Staveley has produced another
period of double-digit performance. To us, this demonstrates the upside
potential still on offer at the lower end of the market cap spectrum, despite
weak sentiment. RKW's returns are still considerably ahead of its own
ambitious target, and the trust continues to have one of the best five-year
track records of any investment trust.

Performance in the period has come from a broad spread of holdings. The top
five contributors are from a variety of industries, with the top three
performers having returned over 100%, 70% and 68%, demonstrating the
asymmetric upside reward potential. This is especially pertinent when
considering the detractors, most notably the write-off in Argentex. Whilst
this was unhelpful, pragmatic position sizing has helped mitigate its impact.

Richard added three new holdings to the portfolio in the period, and two of
these have already contributed notably to performance. One has been the
subject of some takeover activity from private equity, demonstrating value and
how M&A can still be an important factor for returns going forward. That
said, the one realisation in the period is particularly notable, in our view.
The firm has been held since 2022, met its recovery thesis and been sold at a
very high return, with an IRR of 48.2%. This is an excellent example of the
process in action and shows how holdings such as this can provide the
foundations for the excellent, long-term results the strategy has achieved.

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