REG - Rockwood Strategic - Trading Update

Rockwood StrategicAnnouncement

03/10/2024 07:00

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RNS Number : 7215G  Rockwood Strategic PLC  03 October 2024

Rockwood Strategic plc

("RKW" or the "Company")

Trading Update

 

Rockwood Strategic plc (LSE: RKW) today provides an update ahead of
publication of its unaudited results for the six months ended 30(th) September
2024 (the "Period").

 

Highlights

-     NAV Total Return performance in the Period of 22.7% to 252.7p per
share, which compares to a fall in the FTSE AIM All-Share of -0.4% and an
increase in the FTSE Small Cap (ex-ITs) of 13.2%.

-     Total Shareholder Return in the Period was 21.4%.

-     NAV Total Return performance in the three years to 30(th) September
2024 of 48.3%, which compares to the FTSE Small Cap (ex-ITs) of -5.83% and the
FTSE AIM All-Share of -40.5%. The Total Shareholder Return in this period was
67.6%.

-     The Company's shares traded at an average premium to NAV of 4% in
the Period and ended the Period at a 1% premium.

-     Significant investor demand resulted in the issuance of 3,243,573
new shares in the Period, increasing the share count by 10% and, alongside
performance, growing NAV to £87m. NAV has now grown 137% in the last two
years, building scale. Net Cash at Period end was c.£3m, 3.4% of NAV.

 

-       Twenty-one Period end holdings, with the top ten investments
cumulatively representing 68% of NAV. Of these, nine are AIM listed,
representing 33% of NAV.

 

-       Four new portfolio investments purchased during the Period, two
sold. Full details will be provided in the Company's Interim Report.

 

Portfolio Highlights

-       The largest holding, Funding Circle Holdings plc, rose 217% as
they announced the successful sale of their loss-making US operations, a
'stream-lining' initiative leading to UK profitability for the first time, and
significant share buy-backs.

-       Filtronic plc rose 88% due to significant profit and revenue
upgrades as a result of a reaching a strategic partnership with Elon Musk's
SpaceX and related new orders.

-       New holding Capita plc announced the disposal of Capita One Ltd
for £180m, materially reducing debt.

-       RM Group plc announced a significant contract win with the
International Baccalaureate Organisation and solid Interim results.

-       James Fisher & Sons plc completed the important disposal of
RMS Pumptools for £90m, reducing their leverage considerably.

-       Pressure Technologies plc announced exchange of contracts on the
sale of its PMC division for an EV of £6.2m, focusing the group on the
Chesterfield Special Cylinders business and strengthening its balance sheet.

-       Difficult trading, mainly due to external factors, was
experienced at Centaur Media plc, Flowtech Fluidpower plc and Hostmore plc.
The latter we sold as the debt levels were too high. We also exited Young
& Co's Brewery Plc, where the shares were received as part of the takeover
of City Pub Company Plc.

-       During the period we were heavily engaged with material Board
developments at Pennant International Group plc and provided some more
investment to support the business as it pivots to software solutions. We also
supported Argentex plc which has gone through a profit, strategy and
management reset, which whilst disappointing, should still eventually deliver
our target returns. We also backed an acquisition by Facilities by ADF plc, a
new holding, which appears set for considerable profit growth in the provision
of production facilities to the U.K.'s Film and Television industry.

-       Finally, trading updates were positive at both M&C Saatchi
plc and Galliford Try Holdings plc, the latter outlining exciting new medium
term financial objectives.

 

Richard Staveley, Fund Manager, Harwood Capital LLP said:

"We are pleased to have navigated a volatile period for UK small companies
delivering strong NAV growth and further outperformance of peers and relevant
indices ahead of our target returns. The change in Government has raised
widespread concerns about the future taxation of gains made from investing in
the British stock market, and potential changes to other reliefs that may
restrict risk capital finding its way into the UK's most promising small
companies. We hope sense prevails. We remain focused on finding the very best
opportunities in this inefficient market. We are excited about the prospects
for our undervalued holdings in the quarters and years to come, where
self-help and valuation upside are the primary drivers of return."

For further information, please contact:

 Rockwood Strategic plc

 Chairman                             Noel Lamb          020 7264 4444

 Harwood Capital LLP                  Christopher Hart   020 7640 3200

 Investment Manager

 Singer Capital Markets Advisory LLP  James Maxwell       020 7496 3000

                                      James Fischer

 

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