REG - Rockwood Strategic - Trading Update

Rockwood StrategicAnnouncement

14/04/2025 07:00

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RNS Number : 7459E  Rockwood Strategic PLC  14 April 2025

Rockwood Strategic plc

("RKW" or the "Company")

Trading Update

 

Rockwood Strategic plc (LSE: RKW) today provides an update ahead of
publication of its audited results for the financial year ended 31(st) March
2025 (the "Period").

Highlights (unaudited)

-     NAV Total Return performance in the Period of 21.1% to 248.79p per
share, which compares to a fall in the FTSE AIM All-Share of 8.2% and an
increase in the FTSE Small Cap (ex-ITs) of 3.4%.

-     Total Shareholder Return in the Period was 20.8%.

-     NAV Total Return performance in the three years to 31(st) March 2025
of 54.5%, which compares to a decrease in both FTSE Small Cap (ex-ITs) of 6.6%
and the FTSE AIM All-Share of 34.6%. The Total Shareholder Return in this
period was 78.6%.

-     The Company's shares traded at an average premium to NAV of 2.9% in
the Period and ended the Period at a 1.7% premium.

-     Sustained investor demand resulted in the issuance of 7.63m new
shares in the Period, increasing the share count by 25% and, alongside
performance, growing NAV to £96.6m. NAV has now grown 137% in the last three
years, building scale and enabling the manager to consider a wider range of
opportunities under £250 market capitalisation. Net Cash at Period end was
c.£1.0m.

-     There were twenty-four Period end holdings with the top ten
investments cumulatively representing 62.9% of NAV.

-     Seven new portfolio investments purchased during an active Period
and four exited.

Portfolio Highlights

-     Strongest contributors to performance were Funding Circle Holdings
Plc, which commenced multiple share buy backs and executed cost-cutting
measures following our positive engagement with the company; Filtronic Plc,
which announced multiple contracts from and a strategic partnership with
SpaceX, leading to material profit upgrades; RM Group Plc, which continued to
transform itself under the new management team; and National World Plc, which
received a takeover approach.

-     Material new investments were made in Capita Plc, which is
undergoing a root & branch transformation under new management; Mercia
Asset Management Plc, which is exiting its investments and pivoting to its
fast-growing asset management activities; Kooth Plc, whose world-wide growth
potential is unrecognised by inefficient markets; and Vanquis Banking Plc,
which is executing a comprehensive recovery plan under its new executive
leadership.

Richard Staveley, Fund Manager, Harwood Capital LLP said:

"Having outperformed peers, the market and our target returns, we are
delighted with the on-going demand for Rockwood Strategic by investors seeking
out a differentiated approach to UK small cap investing, in a market peppered
with over-looked and undervalued businesses.

We have strong confidence in the portfolio's potential and its returns for
shareholders in the months and years to come. Many of our companies have new,
now settled, management teams, clear turnaround plans, aligned incentives and
the experience to drive profitable growth and shareholder value. If the UK
stock market ignores the progress underway, we expect a maelstrom of takeover
bids, as we observe huge discounts to intrinsic value and corporate
opportunity.

Market weakness post Period end, caused by U.S. Tariff announcements, is
providing an exceptional opportunity to add to existing investments, almost
all of which have limited direct U.S. exposure, at highly attractive share
prices. If, like us, one has a sensible investment time horizon, then the
oft-quoted advice of Buffett, Templeton, Klarman, Marks, Bolton and Munger on
market behaviour would suggest we are staring in the face of a material buying
opportunity in UK small companies".

 

For further information, please contact:

 Rockwood Strategic plc

 Chairman                             Noel Lamb          020 7264 4444

 Harwood group                        Christopher Hart   020 7640 3200

 Investment Manager

 Singer Capital Markets Advisory LLP  James Maxwell       020 7496 3000

                                      James Fischer

 

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